VFI Briefing:Purchasing Overseas real estate

Purchasing Italian real estate

Once a property has been located, the first step is an agreement between the buyer and the seller, known as a Proposal to Purchase. This offer contains a specific timeframe in which the seller can accept the offer. The buyer pays a minimum deposit of 10 percent of the purchase price. The deposit can be higher than this, and it is not uncommon for the deposits to run up to 50 percent, according to Property-Abroad.com. The Proposal to Purchase is legally binding, according to “Investment in International Real Estate,” a Pirola Pennuto Zei & Associati publication. If the seller accepts, the buyer is obligated to complete the transaction and the deposit will be forfeit if the buyer withdraws.

“An alternative and recommended approach is to incorporate the terms of the Proposal to Purchase directly into the purchase and sales contract ensuring to allow a period in which the buyer has the right to carry out a full due diligence on the property and/or entity(ies) holding the property and the possibility of the buyer backing out should the due diligence point to there being some legal or tax problem associated with the property,” according to the publication.

Focusing on improving one property may be wise

The Preliminary Contract of Sale formalizes the buyer’s and seller’s agreement. This document provides details about the property, the buyer, the seller, the price, and any other terms of the transaction.

The entire process is overseen by a notary. In addition to the typical duties associated with a notary, this person will conduct the title search to ensure that the property is clear of liens and other problems, according to Property-Abroad.com. The notary witnesses the closing of the sale.

Investors should, of course, carry out proper due diligence before agreeing to purchase any property. This is especially important when purchasing property in a country with unfamiliar laws and regulations.

“Italian laws are complex [and] there are important concerns that go beyond clean title,” Carroll said. “For instance, a buyer needs to be certain that prior works carried out on a property have been done with proper permits and are in compliance with zoning regulations and that rights of neighboring landowners are respected....[S]evere penalties exist for failure to fulfill the obligation to purchase once the P&S is entered in to."

After purchasing a home in Italy, investors can either try to sell for a profit, rent the property to some of the many tourists visiting Italy every year and/or use the property themselves as a vacation home. Many websites are available on which property owners can advertise foreign homes for sale or rent.

Italian Real Estate: È Bello!

Tourist trade could make buying property in Italy worthwhile

With its beautiful countryside and Mediterranean getaways, Italy has long been a favorite vacation destination with travelers across the world. The country’s popularity with tourists could make Italian real estate a prime opportunity for investors.

Italy is located in Southern Europe, where it juts out into the Mediterranean Sea. The country shares borders with Austria, France, San Marino, Slovenia and Switzerland. Italy occupies a total of 301,230 square kilometers, making it just slightly larger than the U.S. state of Arizona (295,260 square kilometers). The peninsula is home to an estimated 58,147,733 people as of July 2007, according to the CIA World Factbook.

Both rural and urban properties in Italy have potential for profit

Why Italian real estate?

“Italy's exquisite cultural patrimony, evocative countryside and ‘made in Italy’ craftsmanship all combine to preserve the value of Italian real property,” Donald J. Carroll, Esq.—special counsel to and member of Pirola Pennuto Zei & Associati in Rome and vice co-chair of the ABA Committee on International Investment in Real Estate—said in an e-mail interview.

The flourishing tourist industry in Italy provides a strong potential rental market for investors looking to buy overseas. In 2006, Italy ranked fifth on the World Tourism Organization’s list of top tourist destinations, with 41.1 million international arrivals. Southern Italy, in particular, has been of great interest to vacationers. Homes and apartments along the coast or in the relaxed country settings that tourists favor have the potential to provide substantial rental income.

“Among Europe’s main destinations, Italy was by far the best performer in 2006, after a number of weaker years. Arrivals were up 12 percent, following an excellent winter season at the start of the year, thanks in part to Turin’s hosting of the Winter Olympics,” according to a World Tourism Organization report.

And U.S. investors don’t need to worry about restrictions on property ownership because of their citizenship status. Foreigners enjoy the same property rights as Italian citizens, according to Marco Pessi, a partner with McDermott Will & Emery located in the Rome office. The only difference is that foreign nationals must pay an 11 percent purchase registration tax once the sale has been completed, while Italian citizens need only pay a 4 percent tax.

VFI - INCALABRIA: Italian Magazine Article (Part 2)

PERFECT PASTA

The food of Calabria, despite the abundance of fish, is primarily a diet of simple fresh pasta and homegrown vegetables cooked in fascinatingly different ways. Although pasta is important to all Italians, in Calabria it is almost treated with reverence. Each city or town has its own specialities, from chewy fusilli, to various types of lasagne.

Calabrians seem to know by instinct, the best sauce to pair with each pasta to create the most delicious dishes. Piero caused me to sample many varieties of homemade pasta, such as macaroni alla pastora (with ricotta cheese) and other sauces, fusilli (curly pasta), vermicelli in soup and tortellini in brodo. His own favourite was pollo alla cacciatore (‘hunter’s chicken’), to say nothing of uove alla purgatorio (‘eggs from purgatory’). You can imagine how I gradually became drawn into a cuisine far removed from my own by this expert young cook, backed up by total single-minded enthusiasm for his subject. With youthful exuberance I once suggested fish and chips to him and he returned to Italy with a craving even for that. It fitted the Calabrian palette perfectly – good, simple but tasty basic fare. As it happened, I visited Piero and his family on several occasions in the years that followed. His family welcomed me with incredible warmth and I felt part of that corner of Italy. We would visit Piero’s mum, who made all sorts of typical Calabrian dishes for anyone lucky enough to visit. Like highland hospitality in my own country, Calabrians regard it as a sacred duty to welcome guests and I was ushered into many a happy gathering under the gaze of Padre Pio, whose caring picture adorned the rooms. I learned that Piero also had another passion: he was an avid stamp collector and his passionate nature had an outlet here too. Lovingly organized albums of stamps surrounded him in his room. As I met the local folk I discovered the famously proud Calabrian dialect. Its weird and resonant words made me swim as I struggled to understand, equipped only with average Italian, a language I had come to love. Calabrian is an Italian dialect and a descendant of Vulgar Latin, but it has plenty of Greek influence too from the Magna Graecia period. I remember being sent home on one occasion with a bag of cuddaraci (Easter buns), one of many words of Greek origin.

I was favoured this year by being able to return to see my old friend after a gap of 25 years. In that time, with family and professional matters intervening for both of us, I had never forgotten the pull of this land. Piero welcomed me back to a country that I now think of as my second home. It was the little things that jumped out at me – zuppa Inglese ice-cream, spaghetti alla vongole, seeing the wonderful way Calabrians use their hands when they speak, young Italians going to school, walks along the beach and meeting folk I had not seen for years. If this evocation persuades you to consider a visit, you should know that I have not even mentioned the archaeological areas of Sibari and Locri Epizefiri, the towns of Gerace and Stilo, to say nothing of the forests of Sila, dubbed the Yellowstone of Calabria. All the more reason to investigate further. Unusual destination it may be but, like a real life pearl,Calabria hides its beauty.