Italian Property: Use it or Loose it
By Nice Metta, Italian Immigration Lawyer
I often get this question from clients who had been thinking about selling their Italian property for a while: Should I go ahead with the sale of my Italian property now or should I wait for the Italian real estate market to get better?
These are people who feel they do not use their Italian property often enough nor do they generate rent from it.
Apart from personal factors, here are five objective considerations:
1. Experts predict Italian real estate prices to go down:
2020: -3.10% to -4.30%
No prediction as to when Italian real estate prices will go up again.
2. Recurring property costs:
Consider annual property cost (insurance, maintenance, property taxes): usually 1%-2% of property value.
Money loses value every year as cost of living goes up (inflation). If you sell a property in three years, the price will buy you less things than what could buy you today with the same amount of money. Inflation is approximately 2% per year.
Consider possible unexpected major issues that might happen and affect your bottom line, such as third-party liability claims, systems failure, etc.
5. Alternative investments:
What if, instead of letting your equity deplete year after year, you sold the property and invested the proceeds in some other way?
Is Italian real estate so bad? Not at all! I own several properties in Italy. Italian real estate assets are great if you use them or let them work for you.
For example, Italian property owners can enjoy low short-term rental taxation and significant renovation tax credit programs.
However, if you are not using your Italian property nor renting it, and if you do not do any renovations, you will likely lose 6%-7% a year or more.
Learn more about Immigrating to Italy and what to anticipate regarding life in Italy, such as property options.
Studio Legale Metta is an internationally recognized boutique Italian law firm with experienced lawyers who handle domestic and international legal matters on behalf of private individuals, corporations and public institutions.
The author, Nick Metta is a partner of Studio Legale Metta, heads the International Department which he founded in 2004. Nick leads the international team assisting non-Italian residents and entities with matters concerning Italian law. He focuses his practice on Relocation, Real Estate, Cross-Border Successions, Estate Planning, Tax matters, Citizenship and Immigration.
Connect with Nick to explore immigration to Italy and vital matters which come with immigration.
Dig deeper into the details…. read our article on Buying Property in Italy
This article is part of the Relocate Community. The leading independent platform for Global Migration. Dig-deeper into core topics about relocation and connect with qualified Advisors….all in one place.