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OPINION: Why Italians aren’t snatching up their country’s one-euro homes

Foreigners have been eagerly snapping up bargain properties in Italy under the one-euro homes initiative. But why are Italians themselves largely ignoring these offers? Silvia Marchetti explains.

OPINION: Why Italians aren’t snatching up their country's one-euro homes
An Australian visitor tours one-euro homes for sale in the town of Gangi, Sicily. Photo: Tiziana Fabi/AFP

Dozens of depopulated towns and villages across Italy are placing crumbling one-euro homes on the market for less than the cost of an espresso. From the nippy Alps to scorching hot Sicily, almost all regions have come up with this alluring scheme to lure new residents and revive their dying communities.

But while foreigners are rushing to snatch up a bargain home that comes with year-round sunshine – albeit with the burden of renovating it –  Italians don’t seem to have taken the bait. 

I’m not saying that none of the new buyers are Italian, just that when compared to foreigners they’re down to a minimum. When Sambuca di Sicilia in 2019 sold its first lot of cheap houses, those who applied and eventually bought them were nearly all foreigners, and just a few Italians.  

OPINION: Bargain homes and fewer crowds – but Italy’s deep south is not for everyone

There are no official statistics on the nationalities of those who have bought a one-euro property, but I’ve talked to nearly all mayors involved in the initiative and they ended up confirming what seems to be the leading trend: Italians are much, much less interested than foreigners in buying a bargain home.

In the past five years people from all over the world have joined the so-called ‘one-euro buyers club’: from Brazil to Australia, the US, Europe, Russia and even Africa.

But when it comes to Italians, the few that I know of either come from larger but minor cities in Italy or from nearby towns and felt like simply moving to the countryside. And they’re either families or retired couples looking for a peaceful spot, not really young people willing to kickstart a new commercial activity or bring some buzz into town. 

Photo: TIZIANA FABI/AFP

The main reason why Italians find one-euro homes less sexy than foreigners do is that they look more at the cons than the pros – because they know how things in their country work better than outsiders. 

The potential hassle of having to renovate a dilapidated property within a limited timeframe (usually three years), dealing with excessive red tape and paperwork, and then having to look after another house in Italy aside from their main home can be discouraging.

READ ALSO: These are the Italian towns offering houses for one euro

Italians, as opposed to foreigners, aren’t easily seduced by the romanticism of buying heaps of old stone with a history or by the thrill of the renovation, which actually scares them away. There are exceptions, of course: Italians falling in love with lost, forgotten villages where time stands still either because they were taken there by friends during their university years or because they want to escape the crowds.

The truth is, many foreigners snap up these one-euro homes not just because of the bargain price but because they actually carry out the restyle themselves and are excited about the project. They love to breathe new life into an old shepherd or peasant cottage and watch it transform. 

Most Italians on the other hand tend to be lazy with DIY makeovers and basically fail to grasp the potential and adventure of such an operation.

Talking to realtors, sociologists and real estate analysts I was shocked by their underestimation of the one-euro homes business and the economic revolution it has triggered in many Sicilian villages like Gangi and Sambuca, drawing investments and new people. 

Photo: TIZIANA FABI/AFP

Some weren’t even aware of the huge success the scheme has had abroad and the global headlines it usually makes when one new town joins the club.

One realtor even replied: “I’m not sure it will have a future, and in any case, it will never kick off among Italians”. The last part of his observation is correct.

A Sicilian friend of mine brushed it away with a laugh. She, like many other Italians I have spoken to, says it would be “hell” to buy and renovate a one euro home. 

Among the reasons she listed not having time to follow the restyle and the nuisance of having to carry heavy water bottles and grocery bags from the car to the house. 

Logistics can be tricky. In small villages, where alleys are wide enough for donkeys and scooters only, the ancient district is accessible only on foot and during summer it’s impossible to find a parking spot (as Italians say: ‘dove la metto? me la metto in tasca’, or ‘I’ll have to put the car in my pocket’).

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Yet for foreigners this is all part of ‘living the rural adventure’. And for many, a nostalgic way to reconnect with the town of their ancestors who migrated abroad decades ago. 

In my view the ultimate reason why Italians aren’t so keen on the one-euro homes is that they’re already based in Il bel paese, aka ‘the beautiful country’ as they call their homeland. They were born and raised here so they can’t even fathom what it means for a foreigner to grab a slice of la dolce vita and be able to stay months in Italy in a very affordable way.

Spending even 50.000 euros in renovating a one-euro home is still way less than what any other type of property in Italy would cost. And it’s more than just a house. It’s a sort of ‘terminal’ or ‘launchpad’ from where you can explore not just the entire country but the rest of Europe. 

Many Americans and Russians who have snapped a one-euro home have also done it to have a ‘door’ to the Old Continent. Italy is a small country when compared to the States, distances are shorter, and you can cross several regions in a one-hour drive. From anywhere in Italy you can drive to go skiing in France, Switzerland, or Austria. From the port of Bari in Puglia you can hop on a ferry boat to visit Greece, Croatia and Slovenia, while stunning Corsica is a stone’s throw from Tuscany. Not to mention all the gorgeous, exotic Sicilian islands to discover.

Italians already have all this beauty at their disposal – in their ‘backyard’ – and such luxury, or luck, inevitably diminishes the appeal of the one-euro dwellings.

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PROPERTY

PROPERTY: Is this the end of Italy’s building ‘superbonus’?

As state funds for Italy's popular building 'superbonus' have already been exhausted, Italian authorities are reportedly considering halting any further extensions to the discount scheme.

PROPERTY: Is this the end of Italy's building 'superbonus'?

The Italian government is considering yet more changes for Italy’s so-called building ‘superbonus 110‘, as the allocated budget for the building incentive has already been exceeded, while renovation projects continue to wait in a queue.

According to the latest data from ENEA (Italy’s national agency for new technologies, energy and sustainable economic development), the approximately €33.3 billion that was earmarked for the scheme until 2025 has already gone over by some €400 million.

That makes a total of €33.7 million in claims up until May 31st, 2022.

This means that not only have the Superbonus funds run out, they have also been claimed in excess, potentially meaning that the government could ask for the money back.

In the two years since it was introduced, the building discount scheme has given homeowners the chance to claim a tax deduction of up to 110 percent of the cost of renovation work.

READ ALSO: Nine things we’ve learned about claiming Italy’s building ‘superbonus’

Building jobs covered by the bonus are related to making energy-efficiency upgrades and reducing seismic risk, with the aim of kickstarting Italy’s post-pandemic economic recovery and its construction sector.

The credit transfer system is hampering accessing Italy’s ‘superbonus 110’. Photo by Guilherme Cunha on Unsplash

But the scheme has been beset with delays due to a raft of reasons, including its popularity creating soaring demand, supply chain issues, fraudulent claims, multiple changes to its rules and regulations and a blocking to the credit transfer system – that is, the way people access the government funds to pay for the building work.

These setbacks have caused some homeowners to abandon their plans altogether, or have left many in the middle of works concerned about whether they’ll able to finish their renovation projects in time.

Despite the changes and blockages, however, the bonus has in some way been heralded as a success, considering the vast amount of claims already made.

But what does that mean for those still stuck in the process with works waiting to start or not yet completed?

Property owners who have benefited in part from the subsidies for building renovation work could see their construction site stopped and their funding demanded back, as construction companies are unable to collect the credit.

READ ALSO: Italy’s building superbonus: What’s the problem with credit transfers?

Although no official government statement has yet been made, Italian media reports indicate that, after its latest extension, the authorities don’t intend to roll on the scheme any further beyond 2022 for owners of single family homes.

There have been multiple deadline extensions for this category of property in response to ongoing delays, but the government has ruled out any further lengthening to the current timeframe, reported Il Sole 24 Ore.

As things stand, single unit home owners have until September 30th to complete 30 percent of the overall works, with a final deadline of December 31st, 2022 for all renovations to be completed.

Without further financing and an unblocking of the credit system, those carrying out renovation jobs could find themselves with stalled construction sites, half-finished homes or having to give any claimed money back.

Claiming Italy’s superbonus has been mired by delays and bureaucracy. Photo by Laughing Cynic on Unsplash

The risk to both companies and individuals has prompted criticism from various sectors, as jobs, futures and a continuing stock of energy inefficient houses hang in the balance.

READ ALSO: How to stay out of trouble when renovating your Italian property

“If the government wants the death of the superbonus, it should come and say so… knowing that it is telling companies to go bankrupt,” stated the president of the Productive Businesses Commission, Martina Nardi.

Earlier this month, the CNA (Confederazione Nazionale dell’Artigianato e della Piccola e Media Impresa), which represents Italian small business owners, said some 33,000 businesses are at risk of bankruptcy due to blockages.

Calls to unblock the credit transfer system and overcome the stalemate continue as impending deadlines cause increasing alarm and frustration.

Opening up the credit transfer system would allow construction companies to convert their credit into liquidity, that is, actual money, and thereby complete works already started.

The National Confederation of Craftsmen and Small and Medium Enterprises has spoken of difficulties on the part of “thousands of companies in the construction sector that are unable to transfer tax credits linked to bonuses for the redevelopment of buildings due to the freezing of the market”.

In other words, projects continue to face blockages until building companies can be sure that they’ll receive the money they were granted.

READ ALSO: The hidden costs of buying a home in Italy

In an open letter to Italy’s prime minister Mario Draghi, one architect described the situation as an “almost unprecedented liquidity crisis” that is pushing the country to “the brink of the deepest economic and social crisis ever seen and managed”.

“It has been two years of tribulation, this we can say today, that have turned genius into monstrosity due to the constant changes, corrections and adjustments that keep everyone in suspense,” wrote Daniele Menichini.

The government has been criticised for doing the opposite of what they stated with the superbonus, instead causing further economic downturn. Photo by Damien MEYER / AFP

“The situation that is looming at this time is of uncertainty and insecurity, in which society will hit a wall because of the blocked credits and the blocking of all those projects that were about to start,” he added.

While the government has expressed no intention to refinance the scheme beyond 2022 for single family homes, a glimmer of hope remains via an opening up of credit in a further expected amendment to the superbonus.

READ ALSO:

Easing the bottleneck would ensure that at least the projects that will meet the 2022 deadlines can be financed and completed.

To do this, the government is reportedly considering extending the ability to obtain credit to other parties besides banks, such as construction companies themselves. In doing so, it removes one extra bureaucratic hurdle and would unlock the current standstill due to many banks no longer buying credit.

The question of how the authorities will foot the bill for the already overrun budget still remains, with some reports suggesting an extra financial boost from the government will be needed until the end of 2022.

Other possibilities point towards allowing firms to carry over their credit surpluses until next year, to overcome the obligation to offset the credit this year.

Meanwhile, some categories of building have until 2025 to claim state funds with declining amounts available each year, but the future financing of which still isn’t clear.

The Local will continue to provide updates on this.

See more in our Italian property section.

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