Buongiorno, Britons: how to buy in Italy

As more and more investors are drawn to areas from Chiantishire to Sicily, Esther Shaw charts the costs of ownership and where to go for a good deal
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The Independent Online

Italy attracts thousands of British property investors each year. "For many, it offers the dream lifestyle," says Lars Christiaanse, property consultant for the international arm of estate agent Chesterton.

With prices still low compared to many other Mediterranean locations, he adds, some areas of the country provide promising opportunities.

Tuscany – famed for cities such as Florence, Pisa and Lucca – has been the focus of investor interest for the past two decades. If you're drawn to the area too, you could look into one of its many renovation projects. Chesterton is currently doing the marketing for a restored medieval castle in Campiglia Marittima ( castleofcampiglia.com) in the Alta Maremma region, around an hour from Pisa.

The castle is being converted into luxury apartments with an indoor pool by Abalisse, a real estate development and consulting company.

"The renovation will preserve the original character and charm of the buildings," says Stefano Fusi, managing director of Abalisse. "All work is being carried out by local artisans, using materials sympathetic to the original construction." Prices start from £337,000 for an apartment.

Abalisse is also converting the picturesque ruins of the ancient village of Borgo di Verardinga, situated between Florence and Pisa, into four luxury apartments and a three-bedroom villa. These are scheduled to be ready in around 12 months and prices start from £385,000 freehold.

As with many such developments in the region, both offer customised rental plans, enabling the owners to gain an income from their property when they are not in residence.

Abalisse offers this in conjunction with Rossosoave, a domestic management company that also provides tailored travel services.

"We will market the property for rent via partner travel agencies and can co-ordinate bookings and collect payments," says Donald Scalmanini, managing director of Rossosoave. "We also offer concierge, cleaning and maintenance services."

If more than a quarter of a million pounds seems a hefty price to pay for your own corner of Tuscany, there are cheaper options.

One of the more common forms of property purchase in Italy is through a scheme called "fractional ownership". "People buy into a certain project for a set number of years – say 20 years or for life," says Mr Christiaanse at Chesterton. "The percentage of the project they buy allows them a certain usage of the unit, such as one month a year."

On top of the purchase price, he adds, all owners will pay an annual fee for the upkeep of the building and grounds. This approach appeals to many buyers as it means they don't have to take on all the financial and maintenance responsibilities themselves.

"This set-up works out much more cheaply than buying a similar unit by yourself," he says. "But re-sale can be difficult."

Cheaper deals can also be found by looking at other parts of Italy. Popular locations include Lombardy, the region that includes Lake Como and the Alps, drawing in walkers, cyclists and skiers. You can, for example, invest in a ski apartment in Gromo, Bergamo, from €90,000 (£63,000).

Venice and the South Tyrol are the attractions in north-east Italy, with Lake Garda one of the main selling points. A two-bedroom apartment in Riva del Garda will set you back €165,000.

Down in the south of the country, if you want to buy a property in Sicily, you will need to budget for at least €200,000.

Sardinia is also an extremely popular spot for holidaymakers, and prices start from as little as €28,000 for a detached two-bedroom old mill and stable in need of renovation in Bonarcado.

For those who want a fully furnished property, prices begin at €43,000 for a two-bedroom house in Sardegna.

When it comes to financing a purchase in Italy, one of the easiest ways is to borrow against your UK property, according to Melanie Bien from broker Savills Private Finance.

The alternative, she adds, is to take out an Italian mortgage in euros – which can work out cheaper.

"Interest rates in Italy start at 5.03 per cent for a variable-rate deal and at 5.45 per cent for a 10-year fix," she says. "Loans are available up to 80 per cent of the value of the property – so you will need a sizeable deposit."

Italian bank fees vary, but are typically around 1 per cent of the mortgage sum.

"You should allow around €500 for the mortgage valuation, and stamp duty of 11 per cent on urban property or 17 per cent on agricultural land," explains Ms Bien.

Once you have found a property and agreed on the price, you will sign a "promise to buy", known as a compromesso.

This is a binding legal document obliging both parties to complete the purchase on a specified date in the offices of a notary.

At this stage, you will also hand over a deposit of around 30 per cent – which you will forfeit if you pull out of the purchase. When the transaction reaches completion, the deposit is taken as downpayment.

The rogito is the final stage in the process, and transfers ownership from the seller to the buyer.

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