Italian property costs

Italian property costs

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Italian Property Costs: Use It or Lose It

Question: 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?

 

Answer: We often get this question from clients who have been thinking long and hard about selling their Italian property.  These are people who feel they do not use their 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% 2021: -3.90% 2022: -3.10% 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.

3. Inflation:

Money loses value every year as the cost of living goes up (inflation). If you sell a property in three years, the price will buy you fewer things than what you could buy today with the same amount of money. Inflation is approximately 2% per year.

4. Liability:

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?

Conclusions

 Is Italian real estate so bad?

Not at all!  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. Discuss your situation with an experienced investment lawyer and see how you can optimize your situation. Book a phone consultation now.

 

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The information presented in the Studio Legale Metta website has been written and reviewed by Italian lawyers. However, it should not be construed to be legal advice, nor promotion of the establishment of a relationship between lawyer and client. The case studies and answers contained in this website pertain to the specific situation referenced and should not be understood to generally apply to other circumstances. Persons accessing this website are encouraged to seek independent counsel for advice concerning their individual needs for legal assistance. Copyright of Studio Legale Metta – Bari (Italy).