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How to avoid hidden traps when buying an old property in Italy

Buying a cheap home to renovate in Italy sounds like the dream, but it can quickly turn nightmarish amid restrictions, red tape, and bickering relatives. Silvia Marchetti explains some of the most unexpected pitfalls and how to avoid them.

How to avoid hidden traps when buying an old property in Italy
Italian towns have been selling off old houses, like this one in the village of Lecce dei Marsi - but purchases are often blocked by bureaucracy. Photo: Gregory Macera

With so many Italian towns offloading cheap old properties for sale, lots of people have been tempted by the chance to buy a fixer-upper in a sunny, rural area and live in the perfect idyll. And most are oblivious at first of what risks the purchase might entail. 

The older the properties are, the more potential traps along the way.

READ ALSO: The Italian towns launching alternatives to one-euro homes

There have been several villages in Italy eager to sell €1 and cheap homes that have had to give up on their plans once hidden issues came to light.

Back in 2014, the towns of Carrega Ligure, in Piedmont, and Lecce nei Marsi, in Abruzzo, tried hard to sell their old properties off at a bargain price but just couldn’t get past Italy’s labyrinthine red tape, hellish property restrictions, and scores of bickering relatives.

Both towns’ mayors found themselves chasing after the many heirs of unknown property owners who had emigrated in the 1800s. All existing relatives, who technically owned small parcels of the same house (whether they knew it or not), had to all agree on the sale.

Under Italian law, over time and generations a property ‘pulverizes’ into many little shares depending on how many heirs are involved (if one single heir is not named).

You can end up in a situation where you agree with two owners that you’ll buy their old house, and then one day another five knock at your door saying they never gave their consent, nullifying your purchase. So it’s always best to check beforehand the local land registry to see exactly who, and how many, are the owners, and where they are. 

READ ALSO:

In Carrega Ligure and Lecce nei Marsi, families had long ago migrated across the world and the many heirs to some properties were impossible to track down.

But there were also other obstacles.

“We wanted to start the renovation project by selling dilapidated one euro houses, and then move on to cheap ones, but the tax office would not agree on the price – saying that the old properties had a greater value, that they weren’t classified as abandoned buildings but as perfectly livable houses in good shape”, says Lecce nei Marsi mayor Augusto Barile. 

This meant buyers would have ended up spending tons of money in property sale taxes.

“Even if these were just small houses, potential property taxes start at €700, and could have been much higher,” he explains.

“This would have been a nightmare for any buyer finding out about this at a later stage, after the purchase”.

Barile says the town hall had not made a prior agreement with the tax office to reclassify and ‘downgrade’ the value of the old buildings, which also required an update of the land registry. 

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

Council officials in the village of Carrega Ligure faced a wall of red tape when they tried to sell off abandoned properties. Credit: Comune di Carrega Ligure

Several potential buyers I spoke to back then said that when they found out about the tax office’s involvement by word of mouth (mostly thanks to village gossip at the bar while sipping an espresso), they fled immediately without even taking a look at the houses. 

The best advice in this case is to pay a visit to the local tax bureau ahead of any formal purchase deal and make sure that the old, dilapidated house you want to buy is actually ‘accatastata’ (registered) as such, or you might end up paying the same property sale taxes as you would on a new home. Hiring a tax lawyer or legal expert could be of huge help.

In Carrega Ligure, where old shepherds’ and farmers’ homes are scattered across 11 districts connecting various valleys, a few abandoned homes located near pristine woods came with a nice patch of land – which turned out to be another huge problem.

Old estates often cannot be disposed of due to ‘vincoli’ – limitations – either of environmental or historic nature, that do not allow the property to be sold, or simply due to territorial boundaries that have changed over time, particularly if the original families haven’t lived there for a long time.

READ ALSO: How Italy’s cheap homes frenzy is changing rural villages

In Carrega Ligure it turned out that “a few dwellings located in the most ancient district couldn’t be sold because of hydrogeological risks. State law forbade rebuilding them from scratch, as floods and mudslides had hit the area in the past”, says Carrega Ligure mayor Luca Silvestri.

Meanwhile, other properties were located within or close to the protected mountain park area where the village districts spread, and where there are strict rules against building to preserve the surroundings.

Another issue was that a few old homes came with a patch of land which was quite distant, on the opposite side of the hill, says Silvestri, making it inconvenient for buyers looking for a house with a back garden.

In this case, checking territorial maps, and speaking to competent bodies such as park authorities if there are ‘green restrictions’ in place, can spare future nuisances.

See more in The Local’s Italian property section.

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PROPERTY

EXPLAINED: Will the latest change solve problems with Italy’s superbonus?

With lines of credit blocked and renovation work delayed, Italy’s political parties have agreed on further changes to the ‘superbonus 110’. Will this be enough to resolve issues for homeowners?

EXPLAINED: Will the latest change solve problems with Italy’s superbonus?

After weeks of intense back-and-forth, parties have finally agreed on the latest amendment to Italy’s famed building superbonus, the government’s financial incentive offering a rebate of up to 110 percent of the cost of works increasing a property’s energy efficiency or reducing its seismic vulnerability.

The scheme has proven incredibly popular over the two years since its introduction back in May 2020. But access has often been hindered by technical issues, with a number of authoritative political figures, not least outgoing premier Mario Draghi, criticising the bonus for its structural complexity. 

READ ALSO: Italy’s building superbonus: How will it change after the election?

A major issue concerns the credit transfer system, with many banks across the country recently refusing to buy or lend credit, and billions of euros’ worth of fraudulent claims – causing many financial operations, and therefore building work, to be frozen altogether.

These setbacks have left many homeowners concerned about whether they’ll be able to finish their renovation projects in time and even caused some to abandon their plans

Furthermore, as many as 40,000 construction businesses are said to be currently at risk of bankruptcy due to credit transfer blockages. 

Worker standing on scaffolding in Spain.

The latest government measure seeks to reopen lines of credit and save as many as 40,000 businesses from bankruptcy. Photo by Pau BARRENA / AFP

The latest amendment, part of the government’s new cost-of-living-crisis aid package (the decreto aiuti bis), is intended to unclog existing lines of credit and save businesses from folding.

The change was approved by the Italian Senate on Tuesday, with the go-ahead from the Lower House now being the last remaining step before the changes are made into law – deputies are expected to greenlight the amendment on Thursday.

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

So what does the latest amendment entail and, more importantly, how is it expected to affect homeowners using the bonus?

The building scheme’s latest amendment is set to remove joint and several liability (‘responsabilità in solido’ in Italian) for all parties involved in the credit transfer chain, retaining the provision only for cases of “wilful misconduct or gross negligence”.

In other words, should cases of insolvency occur, the parties involved in the transfer of credit will no longer be collectively liable to pay the amount owed unless fraud or serious neglect can be proved. 

Naturally, the measure’s primary objective is to allow for easier circulation of credit in order to restart financial operations. 

It isn’t yet clear however whether the amendment will ultimately save those businesses whose credit had been previously blocked and allow homeowners to complete construction works by the given deadlines. 

Construction worker wiping sweat off his brow.

As things stand, 30 percent of renovation works on single-family homes must be completed by September 30th, 2022. Photo by Valentine CHAPUIS / AFP

On this note, it is worth mentioning that there was no provision made under the amendment to extend timeframes for claiming the bonus.

As things stand, those renovating single-family homes still need to complete 30 percent of renovation works by September 30th and must achieve 100-percent completion by December 31st in order to benefit from the funds.

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

Those renovating certain other types of buildings, or those in areas with higher seismic risk, have until 2025 to claim.

Looming deadlines notwithstanding, both the Italian Banking Association (Associazione Bancaria Italiana, ABI) and the National Constructors Association (Associazione Nazionale Costruttori Edili, ANCE) have expressed cautious satisfaction over the latest amendment, with the former praising the measure as a “step forward”.

Five Star Movement leader Giuseppe Conte, who was responsible for introducing the bonus while prime minister in 2020, commended the amendment, saying that a solution had finally been found for the “businesses, workers and families who had been forgotten by all”. 

Others aren’t sure however that the latest update will solve the issues for good. 

Notably, the president of the National Council of Surveyors (CNG), Maurizio Savincelli, said the amendment would not fully resolve the credit transfer blockage as “banks will likely wait for new measures, including memos from the Italian Revenue Agency” before they reopen lines of credit.

Please note that The Local cannot advise on individual cases. For more information on claiming Italy’s building bonuses, homeowners are advised to consult a qualified Italian building surveyor or financial advisor.

See more in our Italian property section.

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