Italian MarketIt's the home of great food and wine, fine art and beautiful architecture, so why have the Irish been so slow getting into the Italian property market? Angie Mezzettireports
The glorious stucco ceiling work by the Italian Lafranchini brothers looked down on the 100 or so potential buyers and agents in the St Stephen's Green Club recently as the Italian ambassador introduced Prof Selicato from Rome University to explain the intricacies of the tax system involved in buying property in Italy.
The Italians have seen the Irish buying property all over the place and are now keen to get a piece of the action. Several developers also set out their wares and Dublin-based, Sicilian-born solicitor Orazio Grosso highlighted the legal steps and important points to bear in mind when buying in Italy.
As well as dispensing legal advice, Orazio Grosso also quietly hand-delivered a small brown bag to client Brendan Bohn.
In it was a bottle of olive oil pressed from his recently acquired 15 acres in Sicily which is planted with 420 olive trees.
"I just bought the place three weeks ago for €28,000," says Bohn. He fell in love with Italian property a few years ago when he went to see a development in Sardinia.
"It was like something from a storybook with the traditional-style stonework, stunning setting with rolling hills and you look out the window to see sheep roaming with bells."
Grosso says the system for buying property in Italy is quite different to the UK and Ireland. The roles of estate agents and solicitors are very separate and the former are not allowed to give any kind of legal advice.
There is also another role of "notaio" - a state appointed public notary - whose job is to certify the validity of the transfer. The notaio does not represent the interests of either party.
"It is important to use a qualified avvocato who will check the planning permission and all legal aspects before you part with any money. All documents must be checked as they have a registered land system," says Grosso.
There are several steps in the process of buying that are carefully choreographed but once these are in place the process is quite simple. You are also strongly advised to make a will when buying property in Italy, as the law regarding inheritance is different to Ireland.
Liz Maher of Imagine Property Network in Kerry says that you really don't need to know all the details and intricacies, but that it is reassuring that there are lots of safeguards built-in for buyer and seller in the Italian system.
Maher has seen huge interest in residential property in Italy, particularly in the Lake Garda and Lake Como areas, and in commercial property in Trieste. She says that Irish people are coming relatively late to the Italian market.
"People don't realise that there is good value out there in Italy, where you can get a nice place for €125,000 to €145,000 and yet they are paying €160,000 to €170,000 in Turkey.
"When you consider that Italy is only a two-hour flight and that tourism and infrastructure is much more developed it makes more sense."
Niall McHenry of Gunne New Homes Overseas says they have seen new moves into the Italian market only in the last six to eight months.
He says they have joined up with an Italian company to promote two developments in Borgo del Torchio on the western side of Lake Garda and Borgo di Gaoile near Sienna.
"The development in Lake Garda is popular with younger clients where there are lots of facilities for the more active with three tennis courts, three pools and playground. Golf is really big in northern Italy and there are several championship courses within about 15 minutes and green fees are around €50 for a day's golf," says McHenry.
Increased access to Italy is also a big factor, he says.
"Lake Garda is about an hour from Bergamo airport and you can also get to it via Milan with Aer Lingus."
The development in Sienna is the recreation of a medieval village and has been part of a study for the architecture faculty in the university there. Prices start at €193,000 before Vat for a studio apartment here or €233,000 for a two-bedroom unit.
"You should allow another 13 per cent on top for extras - Vat 10 per cent, stamp duty and legal fees 3 per cent."
McHenry says most people use their property for a two or three-week holiday and can expect a rental income of between €8,000 to €10,000 on the basis of a 40-50 per cent occupancy during the summer season which lasts just over 20 weeks. Fees to the local legal and management set up will cost about 30 per cent.
According to Grosso, the set up costs for loans and mortgages from an Italian Bank must take account of surveyor costs, the notary "deed the charge" on the property and stamp duty of 2 per cent. Solicitors costs, too, are borne by the applicant. Because the systems are so different, he advises using a solicitor who has both languages, understands the Irish mentality and who is familiar with both country's systems.
Several of Maher's clients have taken out loans from an Italian bank at a keen interest rate. "There is also another scheme that some developers in Italy offer whereby they take a mortgage on the entire development and that you can sub-enter into it for 53 per cent - the rest is made up by cash or equity release. The set up costs on this kind of scheme are about €250."
Maher says the typical profile of her clients from Kerry to Galway would be in the 35-plus age bracket often with young families.
Sardinia is very new to the Irish, she says, and easy to get to with Ryanair flights going out on Friday and back Monday to Alghero.
"The beaches are amazing and property is inexpensive with a one-bedroom apartment in the San Giovani development going for €125,000 to include Vat and both internal and external furnishing. In another development in Costa Paradiso - a private village - you can get a two-bedroom villa for €150,000."
The local taxes and charges are not too onerous, says Maher.
"Allow about €1,400 per annum for maintenance waste, electrical and local taxes. These taxes are paid once a year in the local post office and are usually somewhere between €250 and €500."
Grosso says that Sicily is the up-and-coming region in Italy and that investors can expect to make a good return on property there.
"The English are investing heavily in the Syracuse, Catania and Ragusa areas, and many Hollywood stars are buying in Sicily because of the nearness of the beaches, the rich archaeology and the ability to ski in winter. It is also the largest wine producing region in the world."
The portrayal of the country as a Mafia haven is now just a Hollywood myth, he says, as the politicians and judiciary have taken them in hand and it is now very safe.
There is a very useful booklet available from the Italian Ministry of Finance which delivers helpful advice for foreigners who want to buy a property in Italy.
It is available from the Italian Embassy Commercial Office, 63/65 Northumberland Road, Ballsbridge, Dublin 4. Email: ambasciata.dublino@esteri.it or visit http://www.agenziaentrate.gov.it/ilwwcm/connect/Nsi/Documentazione/Pubblicazioni/Le+guide+dell'Agenzia/Guide+anni+precedenti/2005/fisco+stranieri
