Italy’s €1 home gross sales: Auctions2Italy takes completely different method
(CNN) – Are you looking for a Christmas present but haven’t found the perfect one yet? Here’s a last minute idea: a home in Italy for less than the price of a cup of coffee.
Yes, another month, another set of quaint Italian village houses for sale – and yes, it’s all part of an effort to breathe new life into remote rural areas that have quietly died out.
However, if you are used to the usual model – city authorities looking to attract new residents and offer cheap houses or subsidized housing to attract them – this is a little different.
The regular rules typically require buyers to come up with a suggestion for what to do with the property and leave a deposit which is only refundable if they have completed the renovations within a specified time. Renovating a home in Italy is not without its challenges – especially when it comes to taking advantage of the generous tax breaks for restoring property in rural areas.
Enter Nicolò Bolla and Alessandro Barba. The business partners – from Emilia-Romagna and Sicily – have set up a new website to list houses that are available from 1 euro across the country.
A one stop shop
The website contains auctions for houses in Mussomeli, a baroque town in Sicily.
Stephan Knodler / imageBROKER / Shutterstock
“The main thing is that we’re trying to simplify the process, not just with technology, but with all kinds of tax breaks and immigration,” says Bolla.
“We don’t want people to get stuck in a business, that they have a home, but we don’t want papers to get there. They may need help with immigration or help with starting a business in Italy – we want a central one Create a contact point. ” Business.”
To this end, they are pooling their respective professions – Bolla is an accountant, Barba is an immigration and relocation expert – to help buyers with the whole process, whether they are renovating their dream second home or moving to Italy.
According to the age of Covid-19, their goal is to get everything done online (some other cities require bidders to either submit their offer in person or hire an appointed agent such as a local lawyer).
“If Covid goes, we can go on tours and see the property beforehand, but for now everything can be done online,” says Bolla, who believes “the old-fashioned process is no longer working.”
In addition, the new service will significantly downplay the “friction” that can arise with city-led projects. “We can deal with the bureaucracy,” he promises.
After going online in the summer, their website Auctions2Italy has now started its first auctions with six houses in three locations: Vetto in the north-central region of Emilia Romagna and Mussomeli and Campofelice di Fitalia in Sicily. Both are very important to the couple: Bolla comes from Vetto, although he now lives an hour away in the city of Parma, while Barba’s father grew up in Mussomeli.
“I’m very attached to Vetto, but I had to work elsewhere,” says Bolla, whose family previously owned a hotel near the village that is vacant (although Bolla dreams of making it a long-stay digital nomad).
“Every time I come back, I come back to my state. These small towns – with 2,000 or fewer inhabitants – have a really big sense of community that I really want to belong to. We want to repopulate these areas, keep their sense of community “.
Of course, it is also about the cost of buying in Italy. In a big city or in popular rural areas like Tuscany, you will never find a house for sale for € 1. However, Italy’s small mountain towns in less fashionable rural areas have never recovered from post-WWII emigration. Many have dwindling populations, mostly retired. The authorities are desperate to attract new blood to prevent the cities from becoming extinct.
Prices intentionally low
A house for sale in Vetto.
Whichever program you choose, the home will end up costing way more than a dollar – renovations can run into the tens of thousands of dollars depending on the work required.
The Bolla and Barba website is intended to be transparent about the process. Of the six houses they are starting with (there are plans to expand the service), the two houses in Mussomeli have no reserve prices – so you could really buy them for € 1. The others have a reserve of between $ 3,000 and $ 5,000 ($ 3,700 to $ 6,100) – the seller’s choice. However, all auctions are capped at around 10,000 euros so you will never pay more even if many people are bidding against you.
“Our idea is that people shouldn’t be fighting to hit the market price,” says Bolla. “It doesn’t make sense if people end up spending more on an auction than what they could buy in the open market.
“We want prices to stay low – otherwise we might as well sell villas. We don’t want that – the idea is to help the local authorities revitalize them.
“We don’t want houses to be sold for 50,000 euros. If you pay less, you have more incentives to renovate and more budget to develop your projects in Italy.
“I’ve seen a lot of people leave Vetto and the best way to help is by attracting new people. If property prices are too high, they won’t come. So that’s kind of an invitation to come. “
Vetto lies at the foot of the Apennines.
Other cities have already launched websites – including Mussomeli, who launched its own program through the Case1Euro website. However, the Bolla and Barba website is a little different from the community powered websites.
The website acts as an intermediary between buyer and seller without lowering the selling price. There are no fees for registering or submitting a bid. The only income from Bolla and Barba comes from when the buyer chooses to use them for additional services such as immigration or tax assistance.
Italy has generous tax incentives for real estate renovation: currently you get 110% of the cost of renovation work to make a house more energy efficient, 90% for repairing the facade of a building and up to 60% of your regular renovation expenses.
Typically these “refunds” are in the form of tax credits that are spread over five years. However, Bolla says that non-taxable residents may be able to “trade” the loans, either with a construction company that is effectively doing the job for free or with financial institutions where they can exchange the loans for cash and some cash in the process.
And if you’re looking to move to Italy, not only can Barba help with the immigration process, but Bolla can guide you through the country’s notoriously complex tax process.
“Tax regimes favor newcomers,” he says. “If you work from Italy you get a 70% tax rebate for the first five years. If you move south, the exemption is 90%. If you are a pensioner moving south, you pay only 7 % Of your foreign income in the first 10 years.
“There is bureaucracy, but we can definitely help”.
Why the houses are so cheap
There are houses in Campofelice di Fitalia, a village not far from Corleone in Sicily (picture).
Stefano Montesi / Corbis / Getty Images
Unlike many government-run programs that require you to pay a deposit that is refunded if you complete the renovations in a set period of time, there is no penalty here. If it is a second home, you will have to pay property tax. And if you’ve ever wondered what the catch is – why someone would sell their home for the price of a cup of coffee – it’s because they don’t have to bother paying the tax on a home they’ll never renovate. says Bolla.
“The advantage for the sellers is simple. The houses have been there for a while, the owners pay property tax, nobody wants to buy them, so they have to see an agent.
“The agent is unlikely to be promoting the house – what would be his commission on a $ 20,000 sale?
“Houses often belong to five people inherited from their grandparents. They may live far away, they may already have two houses, which is common in rural areas. They are not ready to renovate.”
In such situations, a newbie who wants to relieve you of the anger is very attractive.
“So many properties are falling down [in rural villages] – Wouldn’t it be better if someone came along and took care of her? “, he asks.
Vetto is an hour from Reggio Emilia, on the main high-speed rail line in Italy.
Hermes Images / AGF / Universal Images Group / Getty Images
Auctions2Italy started with Vetto and Mussomeli because of the personal connections of the two founders to the cities. In particular, the authorities in Vetto have stated that they are interested in obtaining new blood and say they will try to speed up all the formalities.
However, Bolla hopes other communities and private owners will get involved if things go well.
“We don’t want the limitations that some of the other systems had,” he says. “We want a freer process – one that tells cities, hey, they have new residents, new offers, that’s good.”
One thing is worth mentioning: they only work with cities that have super fast WiFi to attract digital nomads. Even though you’re in the country, you won’t be completely cut off.
Fastest finger first
The Enza River flows near Vetto.
So what’s up for grabs? The first six objects are now being auctioned. The first auctions end on December 20th.
There are two houses in Vetto – a small town of 2,000 inhabitants at the green foot of the Apennines, less than an hour from the art city of Parma, Reggio Emilia (on the Italian high-speed line) and about an 80-minute drive from Modena, famous for its Romanesque Cathedral.
Bologna is two hours away and Milan two and a half hours northwest.
Mussomeli with two other houses is a larger town with around 11,000 inhabitants in the center of Sicily, which basks in the sunshine even in winter.
Finally, there are two in Campofelice di Fitalia, a village in central Sicily not far from the more famous Corleone.