Italian tax changes have reduced house purchasing costs by 10-15%. Added to the country's enduring and intrinsic allure, it means there has rarely been a more opportune period in which to invest in the Italy real estate market. Yet as with any property purchase, especially in a foreign country, there are simple steps to stick to to ensure that buying your dream home doesn’t become a nightmare. Here are the 10 that should top your list:

1) CONSIDER DIFFERENT AREAS

Tuscany remains overseas buyers’ favourite part of Italy. Yet other areas such as Abruzzo, Calabria and Sicily are far cheaper and also have stunning countryside and azure-blue seas. Spend a few days at a time to see what areas you like best. Ensure you are within reasonable distance from local amenities, unless you deliberately want to be in splendid isolation. And when it comes to visiting potential properties, there is such a thing as too many. Trying to cram 30 into a weekend simply turns into a gruelling slog. By the halfway mark, chances are you will have forgotten most of what you saw earlier.

2) FIX A REALISTIC BUDGET

Thanks to its picturesque countryside and famous tourist hotspots such as Florence and Pisa, Tuscany will always be in demand – and a solid investment. Yet it isn’t cheap and a farmhouse in central Tuscany can cost the best part of US$750,000. But prices can drop 50% if you head to Garfagnana in northern Tuscany. Despite the global real estate crisis, don’t expect huge 40-50% discounts, with 10% being typical.

3) FIND A GOOD REALTOR

This is one occasion to be grateful for Italian red tape. All realtors must be professionally licensed and qualified, insured and registered at a Chambers of Commerce. Check their website and letterheads to ensure they belong to one of the following respected organisations: FIAIP (Federation of Professional Estate Agents), FIMAA (Federation of Mediators and Agents) or AICI (Italian Association of Estate Agents).

4) DON’T TAKE ON TOO MUCH

Don’t over-commit yourself. The idea of renovating a rustic ruin may sound romantic but are you prepared for the work and expense? Complete restorations can cost up to Euro 1,500 per sq m. Other common errors include buying property far bigger than you strictly need. A large farmhouse with pool and 5 hectares sounds fantastic, but don’t ignore the maintenance involved.

5) USE AN AVVOCATO

For most buyers the Italian process will be unfamiliar, so hire an independent bilingual lawyer (avvocato) with expertise in Italian real estate. Avoid signing documents on your own without knowing what you are committing to. Another consideration: any unpaid mortgages and loans on the house? Plans for a new highway 400 yards away? Was the property built with planning permission? All are vital checks your lawyer will perform.

6) KNOW THE PROCEDURE

Once a price is thrashed out the buyer submits a proposta irrevocabile with a downpayment of around 5% to reserve for two weeks. If his surveyor and/or lawyer give the OK both sides sign a preliminary sales contract, in which they both decide on a completion schedule. A further deposit is paid, bringing the buyer's total downpayment to about a third of total purchase price. Either side risks financial penalties for defaulting at this step. The following stage is to sign the final deed of sale in the office of a notary, who scrutinises all papers and lodges them with the Land Registry. The buyer pays the balance, usually by bank draft from an Italian bank. He will need to have obtained a fiscal code from tax authorities to apply for a bank account.

7) KNOW YOUR ADDITIONAL COSTS

Taxes, fees, etc, add 7%-10% on top of the price of resale properties and 12-15% for new-builds. Expect around 3% to the realtor, US$210-280 per hour for a lawyer, US$700-2100 for a surveyor and US$2,800-7,000 for the notary.
For new-builds, there is 4% VAT if within 18 months you register for official Italian residency – a relatively straightforward process. Otherwise, 10%. For non-new-builds, the buyer pays 3% of cadastral value if residency is registered for within 18 months. Otherwise, 10% of cadastral value. Cadastral value – often far less than the purchase price – is assigned by the Land Registry based on factors such as floor area, number of rooms, etc.

8) USE A FOREX FIRM

Last year the Sterling-Euro rate swung between a January low of £1/Euro 1.06 and a summer high of £1/Euro 1.19. So a UK buyer weighing up a Euro 400,000 villa could have faced shelling out up to £41,250 more just for taking the plunge at the wrong moment. Hence the importance of using a specialist currency exchange company, who can fix rates for future deals to safeguard against currency fluctuations. They offer more impressive rates than the typical bank and could save you £16,000 on a £400,000 deal.

9) MAXIMIZE RENTAL POTENTIAL

Do you plan to let out your property? If so, proximity to transport hubs is vital. Aim for a maximum 90 minutes from an international airport. In big towns and cities, consider proximity to public transport as not all visitors will have access to a vehicle. Villas and apartments near a beach always have superb rental potential and keep their value over time because of limits on additional building in these parts of the country.

10) MAKE AN EFFORT IN ITALIAN

Make the effort to learn some handy Italian words and phrases. Don’t forget that in contrast to North-West Europe, fewer than 30% of people here speak English, among the lowest ratios in the EU. Don’t be afraid to embarrass yourself as your attempts, regardless of how clumsy, will endear you to locals.

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