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| Italy Buying Guide Newsletter |
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| Hello That was how a leading Italian journalist summed up the results of Italy’s recent general election, a general election that has changed the face of Italian politics, even though the faces of the politicians are the same (apart from a few nips and tucks). We couldn’t have timed the first Italy Buying Guide newsletter any better – welcome! Enter Berlusconi for his third round as prime minister. What makes this new Italian parliament so different from the previous political scenario? For a start, the left wing has been completely eliminated from the Italian parliament – there is, essentially, no left-wing opposition, a situation that is quite unprecedented in West European democracy. Italy has swung completely to the right, partly as a result of the centre-left’s inability to govern in the last parliament, the extreme left’s inability to make its voice heard on social issues and partly as a result of growing hostility towards illegal immigration. This could mean that left-wing opposition will be forced to make its protests outside parliament, in the streets and trades unions. The other difference – which in a certain sense has been welcomed by citizens of all political persuasions – is that for the first time Italy has a parliament dominated by two large parties, quite a miracle considering that electors had 14 parties to choose from! The government will be able to govern as it wishes, without being paralysed by constantly-collapsing coalitions, a situation which has hampered Italian parliaments for some time. So the new government cannot blame the lack of a clear majority for its inability to govern. Over to you, Silvio... Not that anyone is expecting any stunning new proposals. Even on Berlusconi’s party manifesto you will read this sentence: “We can’t perform – so we can’t promise – miracles.” So much for high hopes. Certainly the Italian economy is not in a particularly rosy state. Production is stagnating (Spain’s GDP overtook Italy’s last year – causing a general sense of humiliation), net wages are the lowest in Europe, bank charges the highest, fears of inflation grow as fuel prices continue to rise exponentially. In fact, Berlusconi’s party manifesto makes very few promises. The only one that stands out, and which could directly interest Italy Buying Guide readers, like yourself – is the promise to abolish local council tax, or ICI, on main residences. This is great news for Brits wishing to emigrate to Italy permanently, but perhaps not such great news for those who are buying a holiday home. It is perfectly conceivable that if local tax on first homes is abolished, councils will be forced to increase the ICI level – currently far lower than that in the UK – on second homes to make up for the shortfall. We shall see. The only prediction I dare make is that nothing in Berlusconi’s programme – and possibly any other party’s programme – will do anything to alleviate the two main obstacles to Italian economic development: crippling bureaucracy and endemic corruption. Have a great month…and if you haven’t done so already please purchase the Italy Buying Guide to ensure you know everything there is to know about buying in Italy! http://www.ItalyBuyingGuide.com/guide.htm Kind regards, Gianna Williams |
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Buying in Italy - Prices may vary!I’ve started to avoid looking at the exchange rate between euros and pounds recently. Like the child who plays peek-a-boo and is convinced that if they cover their eyes no one else can see them, I have become convinced that if I don’t look at the exchange rate maybe it won’t keep going down... We all may have
to reconsider how much we’ve got available to spend on a property
abroad. And actually,
this may not be a bad time to review this thorny matter anyway –
many people seriously understimate how much it costs to renovate and
maintain a house in Italy. It is particularly easy to get a false impression
when looking at the prices of rusticos that require renovation. Many people who are attracted by the cheap price of a property in Italy are then completely bogged down with the added costs that they did not consider and then have difficulty paying. Consider the case of a family from Newcastle whom I met last week. They had come over to Italy, partly for a short break and partly to review some repair work that had been done to their beautiful renovated rustico during their absence. When they got there, they discovered that their water supply had been cut off. They were then summoned to meet the council geometra, in charge of planning permissions and services such as water and refuse. Once admitted into his August Presence the next day, they were informed that their builder had not latched on to a normal council water pipe during renovations but had, without permission, latched onto a private consortium who had banded together last year to have council water fed to their properties on the edge of town. This consortium had made a formal complaint to the council that someone (ie our family from Newcastle) had latched onto their supply without having paid for the service. Of course, our Newcastle family knew nothing of this and were summarily asked to pay up 1,400 euros by the end of May, ie the same amount each member of this consortium had paid to get the council’s water supply extended to their properties, or their water would be shut off again. Having given our hapless family five minutes to recover from this blow, the council geometra then informed them that on top of that, their renovated rustico has not yet been re-registered in the land registry as a house, but is still classified as a storage room, and should they fail to pay an architect or geometra to have their house re-registered they will soon incur a hefty fine from the provincial government. Another 800-1,000 euros to budget for. So in all, our family-of-five have to find 2,400 extra euros they hadn’t planned on spending, six months after their renovation was completed. These are average people who do not earn a fortune and who have probably stretched themselves just to be able to have this little holiday house in the sun. They were pretty certain that all the big expenses were now behind them. They didn’t even have the consolation of a week’s holiday in the sun – it was cold and rainy the entire time they were in Italy. However, as they say in my part of Liguria: ‘Se nu ciove d’Avrì, chelu ch’è nau, turna a murì’ (if it doesn’t rain in April, then that which has sprouted will die back again). And all the locals are looking pretty excited because, as everyone knows, rain in April means porcini mushroom picking in May. Now that could well be some consolation for our family-of-five when they come back in four weeks’ time. Please understand
that I’m not trying to dissuade you from buying in Italy –
I’m providing you this information so you realize that you must
do your research and talk to people that have gone before you. |
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An Option the Banks Won't Tell you About....by Smart Currency’s Charles Purdy.It is often thought that the only way to buy currency is by paying for it in full. Most buyers that don't know about currency options buy the currency as and when it is required - they wait until the last minute. This is what the banks love their clients to do as the client is 'forced' to buy at the rate the bank offers. Some buyers buy the €’s immediately when they know the amount even if they don't need to use them for 3 months. Buyers do this to avoid the cost of the euros increasing so they know their exact costs. However there is a more efficient alternative that the banks fail to tell you about. The alternative is to secure your currency requirements (without paying the full amount for them) using what is known as a forward contract. Pretend that you require €100,000 in three months time and you don't want to risk the sterling cost increasing by £5-10,000. (An increase can easily happen due to changes in the exchange rate between now and 3 months time) You can agree an exchange rate for those €’s now. All that would be required is a deposit of up to 10% of the sterling purchase cost. This means that you don't need to pay the full amount for the Euros now, so you can keep 90% of your funds in a sterling high interest account. By doing this you will know EXACTLY how much you will require when it comes to pay for the €’s in three months time. (You'll know that you won't need to pay an extra £5-10,000 ) It may sound complicated but is very simple to do when you work with a company like Smart Currency Exchange. And the joy of such an approach is that it removes all the uncertainty and the associated stress and strain as you know exactly what your cost will be. Sterling The improvement
that sterling enjoyed at the end of last week was short lived. It seems
to have been a case of buy on rumour and sell on the facts... On Friday
it was rumoured that the Royal Bank of Scotland would raise £12bn
through a rights issue and that the Bank of England would aid liquidity
through the “buying” of £50bn in mortgage loans from
the banks. These are now facts, and because of these facts sterling
has lost ground. It is thought that the Bank of England will continue
to cut UK interest rates and as such sterling is seeing one of its main
supports slowly eroded. [All in all, this means that overseas property
will become more expensive] The Euro The € has had an interesting week and sits at €1.246/£1 inter bank. Euro land inflation is still at the top end of expectations which means that the European Central Bank will not cut the € interest rates in the short to medium term. However, there are ever rising concerns about the Euro land economy as the strength of the € is making Euro land exports ever more expensive. The € still has its “safe haven” status which it has now held for a while but pressure is continuing to rise in Euro land. However don’t expect the € to “blow up” any time soon.
Why
overseas property buyers lose money... This 10-page educational report outlines:
And just a couple remarks about the report from our readers...
To get a copy of the report at no charge go to: http://www.smartcurrencyexchange.com/freereport.htm To get a Better-than-Bank
rate go to: http://www.smartCurrencyExchange.com/smartsquotation.htm
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Don’t make a fool out of yourself - do your sums!!In the early 60’s the race was on globally to introduce colour TV to the world. On April 1 1962, one of the most famous practical jokes convinced the Swedish nation that simply by stretching a pair of stockings over black and white TV screens it was possible to view colour images. Naturally the April Fools hoax featured a huge amount of convincing technical jargon, peppered with gimmicks, including sitting the required distance from the screen with the head moving backwards and forwards rhythmically to achieve the desired coloured effect…! Amazingly, Sweden was duped! A footnote here: Sweden commenced permanent full colour broadcasting to the nation on April 1 1970! Joking aside, when moving to Italy it’s important to do your homework and understand all the steps involved to ensure your success. Just because friends do things one way that does not necessarily mean that it’s best for you. One key element that many buyers fail to consider is the full financial future for yourself and your descendents. The creation of your Will and ongoing Estate Planning is an absolutely essential consideration. If you are keeping any links with the UK, be it property, a bank account or that you continue to hold a British passport, it’s advisable to keep your UK Will active as well as preparing a Will in Italy. On the other hand, if you are planning on severing all ties with the UK it is paramount to follow precise steps. One step omitted could cost you an enormous amount in taxes plus potentially disastrous consequences for those that you wish to benefit from your estate. Incidentally, I
can see the “How much will it cost me “ question forming
in your mind, as it did in mine! The good news is that the IFA we will
recommend you to will charge you nothing (no, you have not read that
incorrectly!!) for the benefit of their advice initially. The point
at which they start charging is when you take them up on the advice
given and retain their services to do so. Their boast is that, at that
stage, they hope to make or save you more than they actually charge
you, certainly over the medium term. Independent financial advisers
must also offer their clients the option to pay for advice by fee rather
than commission. |
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ClosingBefore I go I wanted to share with you a very nice piece of feedback we received recently:
Until next time, have a great month. Gianna Gianna Williams |
