Buying Property in Tuscany

Buying property in Tuscany in 10 easy steps

Now is the moment to buy a house in Tuscany because property prices are currently low, in large part due to the real estate crash that occurred in other countries. With Tuscany’s timeless appeal, this means there has hardly been a better time to invest in the property in Tuscany market. Yet as with any real estate transaction – particularly in a foreign country – there are simple steps to follow to ensure buying your dream home doesn't become a nightmare. Here are the key ones:

1) SET A REALISTIC BUDGET
The appeal of regions such as Tuscany is undeniable, thanks to its picturesque countryside and art cities such as Sienna, Florence and Pisa. But Tuscany isn’t cheap and Euro 75,000 isn’t going to get you that farmhouse in 10 acres, unless you’re happy to take on a restoration project.

2) GET A RELIABLE ESTATE AGENT
All realtors must be professionally qualified and licensed, registered with a Chambers of Commerce and have indemnity insurance. Check their website and publicity material to ensure they belong to at least one of: AICI (Italian Association of Estate Agents); FIAIP (Federation of Professional Estate Agents) or FIMAA (Federation of Mediators and Agents).

3) DON’T TAKE ON TOO MUCH
Frances Mayes’ bestseller Under The Tuscan Sun inspired thousands of overseas buyers to try converting an Italian ruin into their dream home. Great in theory, but be prepared for the hard work and finance it entails. Budget up to Euro 1,000-1,500 per sq m for a complete restoration. Whether you go for a fixer-upper or not, avoid taking on more space/land/facilities than you need. A villa with pool set in 10 acres sounds idyllic – but bear in mind the maintenance it will require. 

4) KNOW THE PURCHASING PROCESS
The first stage sees the buyer make an offer with a deposit of some 5% of the agreed purchase price. If his surveyor and/or lawyer cite no problems, stage two sees both parties sign a sales contract (compromesso) and agree a timetable. The buyer pays a further deposit, bringing his total deposit to around 30%. Pulling out at this stage carries severe financial penalties for both sides.

The third stage is the final deed of sale (atto di vendita), signed in the office of a notary, who examines all documentation and lodges it with the Land Registry. If one party does not speak Italian, the deed must be translated. The buyer also settles in full with the seller via payment from an Italian bank. For this, he will need to have obtained a fiscal code from the tax office to permit him to apply for a bank account. 

5) GET LEGAL ADVICE
For many buyers the Italian legal process will be completely foreign, so hire a reputable, independent English-speaking lawyer well-versed in the system. Too many investors still sign documentation unaware of what entails – then discover they are trapped in a binding legal contract. Are there plans to build a sewage works 200 metres away? Any outstanding loans, mortgages or third-party claims on the house? Does it have the requisite planning permission? All these are crucial checks a lawyer will perform. 

6) BUDGET FOR EXTRA COSTS
Purchasing a previously inhabited home will typically mean an extra 7-10% in fees and taxes, rising to 12-15% for new-build properties.

For previously inhabited homes, 3% of "cadastral value" is payable if the buyer becomes an official Italian resident with 18 months, otherwise it rises to 10%. Cadastral value is decided by the Land Registry and depends on factors such as location, floor space, number of rooms, etc. It is usually less than half the purchase price.

For new-builds, 4% VAT is payable if the residency is obtained within 18 months, otherwise a 10% rate if incurred. Other additional costs may include to Euro 2,000-5,000 for a notary, Euro 500-1,500 for a surveyor, Euro 150-200 per hour for a solicitor and 3% of the purchase price to the estate agent. 

7) GET THE BEST FOREIGN EXCHANGE DEAL
Over the course of 2009, the Pound-Euro rate hit a high of £1/Euro 1.185 and bottomed out at £1/Euro 1.059. For a Euro 250,000 property, the difference between buying at the top and the bottom of the market would have cost a extra £25,000. This is where a specialist foreign exchange company comes in. They can fix rates for future deals to minimise the impact of currency changes. They also offer far better rates than banks, typically saving buyers up to £10,000 on a £250,000 transaction compared to banks. 

8) MAXIMISE YOUR RENTAL POTENTIAL
Will your property primarily be a holiday/retirement home or do you plan to rent it out at some stage? If the latter, proximity to transport hubs is vital. Aim for a maximum 90 minutes from the nearest international airport. In cities, bear in mind how close your property is to public transport as not all holidaymakers will have a car. Unsurprisingly, properties near the beach not only rent better, they also keep their value because of restrictions on additional construction near the coast. 

9) SPEAK SOME ITALIAN
Make an effort to learn some Italian, even if you only plan on using your new home for a couple of weeks of the year. As a rule of thumb the further south you go, the less likely it is that people will speak a foreign language, And your efforts, no matter how rudimentary, will endear you to Italians.

10) DON'T FORGET THE FRACTIONAL OWNERSHIP OPTION
If you can't afford the kind of luxury and authenticity that you would really like, consider fractional ownership in Tuscany. Although superficially similar to a time share, fractional ownership is true ownership, albeit shared, in a Tuscan property, not simply a purchase of vacation time rights. You can sell your ownership share or pass it on to your children. As the value of the property increases, so does the value of your equity. More about fractional ownership in Tuscany here.

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