Welcome to episode one. The first of many to come. In each post I will describe what issue we are currently working on, we have just worked or we will be working in the near future.
I hope that in time this section will become a mini guide for everyone who wants to know how to carry a project like that and maybe help you make your Italian Dream come true.
So, as you know from the section’s opening post we decided to move to Italy. For us moving to Italy is a part of a larger plan – we want to change our lives and slow down our life’s pace a little. Our business plan for moving to Italy is partly based on the idea to make a guest house there (I will write about our business plan in details in near future). So, because guest house is an important part of our business plan, the house has to meet specific requirements. Because there are thousands of home ads online, before we could start browsing ads, we wanted to specify requirements for our dream home.
Our requirements list looks like this:
- Size: at least 200-250 m2, ideally around 400-500.
- Rooms: at lest 6, ideally 8-10
- Bathrooms: at lest 2, ideally 3 or more
- Detached house, free on four sides
- Region specific desing, ideally traditional italian stone house
- 2 or 3 floors with bathroom on each floor
- Terrace or/and balconies and ideally large windows
- Ready to move in or small renovation works required
- House in quiet place, but at the same time not to far from small city or village
- Not to far from the main tourist attractions such as a big city or natural attractions located near lake, sea or in the mountains
- House in dominant position with panoramic view on mountains, lake or sea.
- Important additives:
- Medium or large size garden with few trees
- Garage at least for one car – ideal for 2
- Good quality road leading to the house
- Furnished or partly furnished
- Possibility of connecting the internet with a good quality connection
The next key thing when it comes to buying a home is of course money. You probably think that this should be the first thing to consider and maybe for you this is the issue number one. But for me, and it’s not just about buying a house, I like to first build the vision of my dream in my mind and then think about the money and how to make it happen. So first I build this picture in my mind:
I see us living in a nice, stone house in a beautiful place in Italy. As every morning, we go out to the terrace for tea and we look at the breathtaking view. In our garden we can see our dog happily gambols. While drinking tea, we think about tasks to be carried out on the coming day and we can’t wait to start. We are happy and calm and we feel really special.
I know the picture is nothing special in general but it is special to me. Maybe your picture would look different? I think it’s worth spending some time visualizing your dreams. In my life I made a lot of many different projects and I made a lot of my dreams come true and I would not be able to do that wihout vizualization. Visualization is a powerful tool that has this magical power of making things happen. I honestly recommend it to everyone.
Ok., so after we did the visualization and requirements for the house, we started to work with the numbers. After short research I found that buying a house in Italy is quite expensive when it comes to transaction costs. According to the report from Global Property Guide it could be even 32% of the property’s value. Below you can find detailed table with fees and taxes and here you can read the whole article about the costs.
|Registration Tax||3.00 – 7.00%||buyer|
|Value Added Tax (VAT)||4.00% – 22.00%||buyer|
|Land Registry Tax||1%||buyer|
|Notary Fee||1.00% – 2.50%||buyer|
|Legal Fees||1.00% – 2% (+ 22% VAT)||buyer|
|Real Estate Agent´s Fee||1.50% – 4% (+ 22% VAT)||buyer|
|Costs paid by buyer||9.05% – 32.82%|
So, all these fees and taxes are really high even if I would consider the optimistic variant that the costs will be around 10% (and they will probably be more). This is especially problematic for coutries that do not have the Euro or their currency is much weaker than Euro.
In Poland we have Polish zloty (PLN) and we have to pay around 4,25 PLN for 1 Euro. So for example if we consider buying a house that cost 250 000 Euro, the fee would be around 25 000 EU. To make you realize how much it is for us, I will say that it is a quarter of the price of a two-room apartment that can be bought in a good district of our capital city, Warsaw.
So knowing exact fees and taxes values for a specific house is crucial information. Reading online articles about fees and taxes are great source of information for the start, but to know the exact numbers we have to contact with some local accountant and real estate agency.
To find the italian accountant I used the Advocate Abroad site. Currently we are in the middle of consultation about the costs, so I can’t say if the contact was ok or not. I will definately update this later. The results of this consultation is crucial for our business plan, so we are really looking forward to it.
I have to admit that I’m a little afraid of the result of the conversation with the accountant, because I’m afraid that the amount of taxes can make it very difficult for us to make our dream come true. As soon as I will have the numbers I will definately write a post about this.
Regardless of the result of the conversation with the accountant, we have already started looking for a home so that during the next vacation we can see a few of them personally.
We currently mainly look for houses on Idealista.it and I can definitely recommend it. It has good interface, very nice search tool (you can draw a search area on google maps), but the most important thing is that its data base is really, really big, so you will not have a problem to find houses in any area you are interested in.
So that would be all about how we defined the criteria for searching for our house, how we determine the budget and where we are currently looking for online real estate sale advertisements in Italy.
The next step will be to create a complete tax and fees table, so we can see how much money we actually have for the house.
Then we will start working on a business plan that will show us how our plan looks in numbers.