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Italy Buying Guide Monthly Newsletter
April 2010
(if you don't already receive a monthly announcement that our Italy newsletter has been published, you can sign up to our list here)
In
This Month's Issue You'll Find:
Message from Gianna
Beware of the cost if you pull out of your property purchase…
Save £20,000 when relocating from the UK to Italy
Let the haggling begin!
How can you be sure your holiday home is protected?
The Essential Resource to Buying in Italy
What does the OGC Resource Centre know that you don’t?
Happy Easter everyone!
Thank goodness, it’s spring!
As the long winter finally shows signs of abating, I am determined to do something about the heating bills and persistent cold in my house. The weathermen say that while this has been a very cold winter for the north of Italy – alas, where I live – it has been a warm winter for Italy as a whole.
Over the years, I’ve often complained in these newsletters about the exorbitant cost of gas central heating in Italy compared with the UK and I still find 20% VAT on fuel a scandalous amount of tax to pay. Add to that the generally poor insulation of houses and it makes for a pretty miserable outcome: you spend the winter feeling cold and paying a fortune for the privilege.
Friends from the UK come over for short stays and will easily spend 90 euros on heating their apartment for a week. Brits are used to warm houses and will think nothing of leaving the heating on constantly, something that Italians wouldn’t dream of doing. Swedish friends tell me that they feel the winter cold more here in Italy when it’s 5 degrees outside than in Sweden where it’s -15!
Gas remains a problem, as it is imported from Russia at high cost. Berlusconi’s solution to the problem is to remove the ban on nuclear power stations in Italy, something that a few of us find disconcerting, considering that Italy is prone to the odd earth tremor, and considering that we already have the Mafia dumping other people’s nuclear waste in the Mediterranean…
A popular choice over the last couple of years has been to switch from gas central heating to wood pellet stoves. They’re more environmentally friendly and they’re cheaper than gas. It remains to be seen if bags of wood pellets remain cheaper than gas once everyone switches over. Last year there was a scare when it was discovered that one brand of wood pellets being sold on the market came from radioactive forests in Ukraine, which put everyone off a bit…
Another problem is that the stoves themselves are not cheap. Small ones cost around 1,000 euros and large ones cost around 4,000 euros; add to that the price of a bag of pellets (around 4 euros) which can last between half a day and two days, depending on the time of year and how much heating you want, and it’s still not a cheap option.
My house in the woods was left empty this winter as I spent most of it in our renovated apartment in town, and we were put out to find that the gas in the tank had almost disappeared, despite the fact that we hadn’t been living there. Then we realised that the central heating system turns itself on every time the temperature in the house falls below 6 degrees Celsius, to stop the pipes inside from freezing. This meant that the heating had been coming on and off constantly for three months, and so 600 euros of gas had disappeared without me actually living there!
In an effort to resolve this problem and keep warm (and thanks to a small inheritance), I have decided to replace all the windows in my house – very large, single glazed, old wooden windows – with double glazed, low-emission windows. The timing is good, in that I can get an income tax rebate of 50% of the cost – amounting to 4,000 euros – spread over the next five years. Even the new, insulated front door is eligible for a tax discount, as all these improvements increase the energy efficiency of the property. As I am now used to the Italian way of doing things, I won’t get too excited until I see the money with my own eyes – and feel the difference next winter. But of course, non-residents who replace windows and doors aren’t eligible for the tax rebate and have to pay full wack.
Hopefully, next winter the situation will have improved. In the meantime we have spring to look forward to and - of course - Easter. What is Easter in Italy? Well, it’s eating, drinking, singing, going to mass, watching processions and parades, family get-togethers, tradition. In my own little town, it is simply the biggest festival there is. And speaking of religion, Turin is gearing up for its Exposition of the Holy Shroud next month, only the tenth time it has been put on public display since it was moved to Turin in 1578.
In this month’s email I am going to outline the possible cost to you if you pull out of a property purchase after signing either the Proposta di Acquisto’ or a ‘Compromesso’ agreement – make sure this is not you. Then there is the offer of a FREE, indispensable report from Smart Currency dealing with currency issues when relocating abroad, I tell you about a wonderful charity event, discuss that great British taboo – haggling – and provide info about the wonderful OGC Resource Centre. Finally I round off by talking about how to insure your property before saying goodbye for another month.
Much to take in, so without further ado I will let you read on! I hope you will find some insights in this newsletter – they are written FOR YOU. Please tell us if you feel that there is something you would like discussed and we will try and do so.
Best wishes,
Gianna
Gianna Williams
Italy Buying Guide
The Overseas Guides Company
Italy@OverseasGuidesCompany.com
Phone 0207 898 0549
Beware of the cost if you pull out of your property purchase…
You may already be aware of the fact that once you sign a ‘Proposta di Acquisto’ or a ‘Compromesso’ agreement, you are committed to the sale, unless conditions in the agreement are not met: for example unless a debt is discovered on the property, or irregularities in planning permission or land registry details emerge.
Should you pull out without motivation – say, you’ve simply changed your mind, got cold feet, or a death in the family means you have to rethink your plans – then you lose your deposit (Article 1385 of the Italian Civil Code). If the vendor changes his or her mind, they owe you twice the deposit.
In the estate agency where I work here in Italy, two different buyers pulled out of their sales for ‘personal reasons’ last month and accepted that they would lose their deposits. However what they did not realise was that other costs would have to be paid, and as it was the first time that this had ever happened in our agency, I was able to ascertain the extent of what was owed, above and beyond the loss of their deposit.
Before you go changing your mind, it is a good idea to be completely clear on what costs you will be liable for.
Both these buyers changed their minds at the very last minute – one changed her mind the day before the Deed – and so all the land searches had been done, the contracts drawn up etc. So the notary wanted paying.
On top of that, technically you are bound to pay your estate agent’s fees – normally around 3% of the purchase price plus 20% VAT – from the moment you sign the preliminary proposta or compromesso. In practice, the agent is only paid once the Deed is signed and concluded, however you are liable to pay this from the moment you sign the preliminary contract. It’s not a small fee if you are not even going ahead with the property purchase. Italian Law states at Article 1755 and Article 1756 of the Civil Code that you must pay the estate agent’s commission and reimburse their fees, and by not doing so you are breaking the law. Should the vendor pull out for unjustified reasons, you will be glad to know that the buyer is not liable to pay this commission.
So what do these costs come to? In the case of a 53,000 euro property, the costs of pulling out without a justifiable excuse (apart from the loss of the 5,000 euro deposit) came to:
For the notary: 350 euros to pay for land searches and contracts
For the agency: 222.24 euros of contract registration costs
Agency mediation fee: 1908 euros including VAT (1590 euros plus 318 euros)
This came to a total of 2480.24 euros.
One of the buyers had already commissioned a surveyor (geometra) to draw up plans for renovation work. That was another 800 euros that needed paying.
This of course doesn’t take into consideration the costs of opening an Italian bank account and transferring money there, only to transfer it back and close the account.
It is hard to plan ahead and we never know what will befall us from one day to the next, especially in such economically volatile times as these. However, it’s worth being aware that, though the property purchase system in Italy seems weighted in favour of the buyer, in practice the only people who lost out in the cases above were, in fact, the buyers themselves.
The vendors were certainly put out to have a sale collapse the day before it was meant to take place, but at least they kept the deposit. The notary, agency and geometra were all paid. Only the buyers who change their minds lose out, pay up and are left with nothing.
If you would like further advice, contact the OCG Resource Team or fill in the form below and remember – at no time are you under any obligation to use our recommendations and our service is free of charge.
http://www.ItalyBuyingGuide.com/property.htm
Save £20,000 when relocating from the UK to Italy
The mere fact that you are reading this means that you may be thinking of moving money abroad for one reason or another. There are so many things to think about that sometimes the most obvious ones get overlooked. But what can be more important than making sure that, when transferring your money abroad, you get the very most money that you can to your destination?
The alarming thing is that many people are unaware that they have any options or control whatsoever in this process. They pop into their high street bank, give details of where the money should be transferred to…and ultimately get ripped off.
Why do I say that? Well, the truth is that you do have options and there are ways in which you can save yourself money - and sometimes huge sums of money.
Smart Currency Exchange Ltd has a new, FREE report out that shows you step by step how you could save yourself as much as £20,000 when relocating from the UK to any overseas destination and making an international payment. Incidentally, an ‘International Payment’ is any payment that you need to make where one currency is exchanged for another and the exchanged funds are then transferred to an onward destination.
This report will reveal the choices that are readily available and will explain how much you actually stand to lose unless you understand and use your options.
If you go directly to your bank as opposed to an International Payments Specialist to exchange and move your money, you could pay up to 4% more due to poor exchange rates alone. Work it out: on each £100,000 that’s an extra £4,000 more paid for absolutely no reason.
In most cases, people who are moving abroad (rather than just buying an overseas property) will have lost out on even more money as they not only move funds for property, but often move their entire savings to their onward location.
This report will explain in clear, layman’s terms:
- The full process involved in making an international payment so that you can clearly see where and how losses can occur
- The specific differences between using a bank and using a specialist so you know how to win rather than lose at the international money transfer game
- How financial organisations charge for currency so that you can ensure you’re not getting overcharged
- The nature of exchange rates and how they change every second – so you’re better able to buy at the right time
It also sets out how it is possible for specialists to offer better rates that the banks, along with an explanation of the ‘Interbank rate’. Plus you will understand how to set about choosing the right currency company – one that you can trust and rely on.
Remember, you can lose even more money by failing to plan a currency strategy in advance.
Part of the report includes a detailed forward strategy for sending your money abroad. Why do you need a strategy, you may ask? The short answer is that yet again it may well save you money! Much of the information in this report may surprise you and it may also open your eyes as to how you can save yourself a significant amount of money – and who doesn’t need to do that today? For your copy please go to:
http://www.smartcurrencyexchange.com/emigrationreport.aspx
Smart’s ‘Help for Heroes’
On the 26th February 2010 Peace and Harmony Freemasonry Lodge of Paphos held a Grand Charity Event and raised almost 24,000 euros for "Help for Heroes", www.helpforheroes.org.uk in the UK.
But first of all - what is the charity for? Well, “Help for Heroes” is all about our men and women of the Armed Forces who are injured in the course of their duties. All profits raised will be donated to the charity, which in turn will use these funds to transform the lives of wounded service personnel.
Smart are very proud to have been involved.
If you haven't opened a Smart account yet it’s the number 1 recommendation that the OGC makes when it comes to saving money and avoiding unnecessary risks. Call on freephone 0808 163 0102 (+44 0207 898 0541) or fill out the online Account Form at:
http://www.smartcurrencyexchange.com/applyOnline.aspx
Let the haggling begin!
When does a cheeky offer become a silly one, or – even worse – an insulting one? That’s the question that needs to be the first you ask yourself if you decide that you are going to offer less than the asking price. The last thing you need to do is to rush in with guns blazing and offend anyone. Neither, however, do you want to pay any more than you have to…
Each country has a different take on the thorny issue of exactly how much lower you should offer than the asking price. Take Spain for instance. Although property prices have fallen – and some developers are really desperate to sell - most properties are realistically priced. That does not mean that you can’t make an offer well below the asking price, and here’s where a really good local estate agent could advise you. An agent with extensive knowledge of both the rules and regulations of the country’s property laws plus of the local vendors is worth their weight in gold. They will know local price trends and they will also have a good insight as to how the property game is played in their neck of the woods.
Both the vendor and estate agents need to know that you are a serious buyer and not just wasting their time so it is important to get organised before you make an offer. If you have all your ducks in a row in terms of what is needed to buy - things like a bank account opened in Greece, a NIE registration in place in Spain, a mortgage agreed to in principle, a good Experian credit reference to hand - they will be far more likely to take an offer from you seriously. Even if it is lower than another offer they may receive, the fact that the sale will probably go through quickly will weigh in your favour.
Another thing to bear in mind is that, although the vendor may not be prepared to accept a lower offer, they may well be prepared to consider other incentives to encourage you to buy. Things such as paying your closing costs, landscaping your garden, providing white goods in the kitchen…if you don’t ask, you don’t get!
Remember, if you are buying from a Brit who will be moving the proceeds of the sale back to the UK, the exchange rate from euros into sterling may be more favourable than when they bought so they can perhaps afford to drop their price and still make a profit…
It’s worth remembering that Brits are no longer buying in huge numbers in countries such as Spain, France and Portugal since the recession of 2008/9 and this has left a hole in the market. The recession also meant that a lot of buyers got their fingers burnt, buying at the top of the market and seeing the value of their properties plummet.
What does this mean to you?
It means that as a buyer you may be a fairly rare species and that fact allows you to haggle. It also means that you need to consider your purchase carefully. You don’t want to be one of those buyers with burnt fingers!
So…to summarise:
- Leave your British reserve at the door! Remember, after the sale, you may never see either the estate agent or the vendor again. You are not trying to make a new best friend…
- Do your research before you set foot in your country of purchase. Try and get a feel for possible prices, the state of the market etc.
- Make sure that you have all those irritating bits of paperwork tied up BEFORE you start looking if at all possible and that you are ready to sign a deal immediately (gives massive bargain power to be able to move fast)
- Get your finances set up so that you know exactly what you want to spend. This should include all purchase costs
- Then, by all means put in an offer, but make it a sensible one
- Best case scenario would be that you do this acting under advice from a local estate agent who has a handle on the local market
- If your offer is rejected, try to get other incentives to sweeten the sale
Good luck!
If you need any help at all, for instance with recommendations on estate agents, Financial Advisors, mortgage providers etc please just phone the OGC Resource Centre at 0207 898 0549. We have a number of property professionals that we have either sourced or who come highly recommended by other OGC readers.
Alternatively, fill in our OGC Resource form at: http://www.ItalyBuyingGuide.com/property.htm
How can you be sure your holiday home is protected?
Over the years we at the OGC have spoken to very many people who have bought property abroad or are in the process of doing so. One thing that has become very clear to me is that there are a multitude of things to think about…So many in fact that sometimes things get overlooked or done at the last moment, without proper thought or planning.
One such aspect of the whole property process is insurance. Often people have taken out a policy on the advice of a local insurance agent and then, when things go wrong, discover that they are not covered for an eventuality. Things like flood and fire, or perhaps accidents that happen when their second home is rented out. They haven’t read the fine print, or, even worse, in many cases they can’t read it – it’s in a foreign language! Let’s face it, that is far from ideal but at the time they thought there was no alternative.
Have you heard about Hailstone cover? I have a friend in Cyprus who experienced a massive hailstone storm that destroyed her garden furniture, car roof and smashed a house window. Who would have thought that this could have happened in Cyprus? When she went to her insurance provider she discovered that she was not covered. Needless to say she has switched to another provider that does cover hailstones!
The OGC Recomendation
Many of our readers have contacted us about Intasure, a specialist in foreign property insurance that provides a plain English property insurance policy, underwritten by Lloyds of London and administered in the UK via helpful and knowledgeable staff. They can provide comprehensive cover against all eventualities for holiday homes in more than 40 countries. Whether your home is occupied or not, or let short term or long, their policies are ideal for property abroad - their product is flexible and designed to meet your specific needs.
Their cost effective policies provide far wider cover than most standard European policies. Add £5  million worth of essential public liability cover, which is important for anyone who lets their property - particularly with today’s trend toward litigation - and you have truly comprehensive cover at a very competitive price.
Don't risk turning you dream home into a nightmare by not having the right insurance cover; for more information about this please contact me at 0207 898 0549 and let’s have a chat, or simply follow the link below and fill out the short quote form. It will take 2 minutes and you are never under any obligation to use the service.
Go to: Intasure
The Essential Resource to Buying in Italy
The media is filled with doom and gloom, but just because the economic outlook is a little on the gloomy side it does not mean you have to postpone your plans to either buy a second home or move abroad. On the contrary, it actually couldn’t be a better time to buy, providing you do your sums correctly, buy in the right place and use reliable, professional people to help you.
Let the Guides help you with all this – and more. Every step is clearly and simply outlined, starting with the initial idea to buy all the way through to areas, how to buy land, investment options and many top tips. What is more, there’s a money-back guarantee if you don’t like the Guide so you have nothing to lose!!
The Guides are written by OGC staff members who know the country intimately and in many cases own their own homes there. They cover Cyprus, France, Greece, Portugal, and Italy plus there is a wonderful Emigration Guide that would benefit anyone thinking of moving abroad on a permanent basis. The Guides are utterly honest and take a straightforward, no-nonsense approach to the property buying process and all the other aspects that such a move will raise.
This is what Eric and Mary White wrote about one of the guides:
I am sure it is through your efforts that many people that would have given up the idea of having a home or emigrating abroad have only succeeded by following the path through your Guides. Also your following support has made it possible, I am just at the beginning of the long path but with your help I know we will end up living in our tranquil surroundings in our dream home.
For your continuing support Mary and I thank you both,
Eric and Mary White
There are many steps that need to be thought out in advance, but with the help of the Guides you will succeed! Just order your copy now. You are also welcome to phone the OGC Resource Centre where you will find a team of friendly and helpful people happy to assist with your queries. The number is 0207 898 0549.
To get more information on each guide on offer, please select the country below:
http://www.CyprusBuyingGuide.com/guide.htm
http://www.GreeceBuyingGuide.com/guide.htm
http://www.ItalyBuyingGuide.com/guide.htm
http://www.FranceBuyingGuide.com/guide.htm
http://www.PortugalBuyingGuide.com/guide.htm
http://www.EmigrationGuide.com/guide.htm
What does the OGC Resource Centre know that you don’t?
The OGC Resource Centre team are available to assist people with the many questions that arise when buying property and/or moving abroad. They work to help educate overseas property buyers on how to avoid pitfalls, minimise risks and save money! Talking to hundreds of people on a daily basis means they we have come across most of the problems that can arise and in many cases have been able to help.
The OGCers have many relationships with helpful experts that may be of benefit to you, some of whom they have sourced or used and others that come highly recommended by other OGC readers. We can put you in touch with:
- Property developers and agents
- Mortgage brokers
- Independent financial advisors focusing on countries abroad
- Lawyers and solicitors
- Foreign exchange specialists
- Removal experts
- Property insurers
Please think of them as your 'personal assistants' to buying or investing in property abroad, or to helping you with the many questions that arise when you seek to either purchase property or to move abroad permanently.
They don't charge the service as of yet, so please take advantage of this while they come at no cost...just phone 0207 898 0549 – there is no catch, I promise!
Here’s what a happy OGC reader has to say:
“…Let me say how happy Philip and I are with your [OGC Resource Centre] service. You have opened so many doors for us….I like to take things one step at a time, to fully take on board every situation, but I could never have been prepared for the multitude of options that you have presented us with. …You can be sure that we will be using your recommendations because we are gaining more and more confidence in your company and that is all down to the interest you take and the advice you give.”
Fill in our OGC Resource form at: http://www.ItalyBuyingGuide.com/property.htm
Happy Easter everyone!
I hope Easter is a happy time for you.
Please let us know if we can help you in any way with your property search won’t you? It would be our pleasure: the OGC Resource Centre team are standing by to assist with very many recommended resources that come warmly recommended by other OGC readers. Indeed some are those that we ourselves have used…you are under no obligation at all and this is currently a free service so you have nothing to lose!
Best wishes until next month,
Gianna
Gianna Williams
Italy Buying Guide
The Overseas Guides Company
Italy@OverseasGuidesCompany.com
Phone 0207 898 0549
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