Property valuation in Italy
Anyone who has ever envisioned owning property in Italy has discovered that there are many options available. Once a property has been decided upon, a common concern for prospective buyers is how to stay within their maximum budget and enter into an offer confident that the property value is accurate. How does a prospective buyer get honest and precise property evaluation for Italian real estate? Is there a structured system for property appraisals and what tools are available to estimate the cost and value of Italian property? How do you obtain information to determine the actual property cost in Italy and what are the crucial variables?
One of the most decisive variables determining a property’s value is location, location, location! Everyone knows that in real estate the location of your ideal home or property will greatly influence its value. As in the rest of the world, property values in Italy vary significantly between cities and regions, and between the metropolitan areas, countryside, mountains, and coasts.
In general, real estate prices are markedly higher in predominant Italian cities than in smaller towns and countrysides. In these cities, the market flow is more flexible and renting is often easier and more affordable than buying. A healthier job market, access to better services and amenities, a larger number of attractions, and a perceived better quality of life draw people to the cities and drive up the prices of properties. The more expensive cities such as Milan, Rome, Venice, Florence, and Turin experience a continuous flow of affluent Italians and international investors and home buyers.
In the southern part of the country, with the exception of tourist destinations such as Salento and the Amalfi Coast, property values are considerably lower. The year-round mild climate and the charming white-washed villages can’t overcome the challenging economical situation and lack of abundant services available in the south. Hence, you can get more for your money in these regions.
The astute buyer should always keep abreast of current market trends as the difference in prices between regions and demographics are considerable. For example, as of March 2021, the average per square meter cost of a home was €2.473 in the Trentino Alto Adige region, €2.222 in Tuscany and €1.755 in Lombardia. Compare this to only €903 per square meter in the Calabria region. The most expensive housing markets in Italy are Venice and Milan with the average home price being €4,467 and €3,994 per square meter, respectively. The Covid pandemic has brought about a change to housing trends in Italy. The southern regions of Italy saw an increase in demand in 2020 as more people began to work remotely. This all underscores the importance of understanding the current market.
Other factors that determine the current value of a property are the size and condition of the property, and its ‘legal use’ allocation. A property can be classified as habitation, office, shop, or other use. The property’s value will vary according to the designated use. In general, properties classified as “civil habitations” are more expensive. There are some instances where Italian legislation allows owners to change the property’s designated use classification.
It is imperative that buyers obtain an unbiased, professional valuation of a home or property before making an offer or purchasing. We are a team of experienced and informed real estate agents, developers, surveyors, architects, and real estate managers here to assist you in every step of the way. We have professional knowledge of standing legislation and rules and an insider’s take on the real estate market. We will guide you in understanding how the appraisal process works in Italy, facilitate obtaining an accurate property valuation, and provide the prospective buyer with a detailed analysis of the evaluation given the location, condition, rental potential and other factors. We can develop a specific business plan illustrating future rent profits for rentals targeted at the tourist and international student market. We can provide prospective landlords with discerning advice on renovations and furnishings by suggesting innovative solutions sure to please Italian and international tenants.
Classification of properties in Italy
A / 1: stately homes. The difference between properties comprised in the A/1 cadastral category and residential homes is determined by their location (in prestigious areas), and the high degree of finishing
A / 2: civil dwellings. These are residential properties, where the vast majority of the population lives
A / 3: economic housing. Housing units built with low cost materials and finishes. They have a lower cadastral income, as well as a lower purchase price than homes that fall within class A / 2
A / 4: popular housing. Even lower level than economic properties, both in terms of finishing and construction features. No A/4 type houses are built in Italy nowadays.
A / 5: ultra-popular housing. The land registry gives the definition of “realities outside the minimum indispensable standards”. Through the note from the Ministry of Finance dated 4 May 1994 (C1 / 1022/94), classes A / 5 and A / 6 have been canceled
A / 6: rural dwellings. Properties for agricultural activities (suppressed by the decree of the Ministry of Finance together with class A / 5)
A / 7: houses in small villas. Buildings corresponding to civilian homes but with the addition of outdoor areas for exclusive use
A / 8: houses in villas. Properties with finishes and construction features superior to the ordinary, a very large surface area of the main areas and presence of park and / or garden
A / 9: castles, palaces of outstanding historical or artistic merit. These buildings are characterized by a distribution of volumes and internal spaces that is different from all the other properties classified in the land registry
A / 10: studios and private offices. Housing units intended for professional activities. These include insurance agencies, analysis laboratories and those used by dental technicians
A / 11: accommodation and houses typical of the places. The classic example of properties classified with category A / 11 is represented by the high altitude hut, but there are also trulli and the mountain huts themselves
B / 1: colleges, orphanages, convents, seminaries, shelters, hospices, barracks. The cadastral category B / 1 includes all those non-profit structures used for assistance for the elderly (hospices), for the education of minors (colleges, orphanages), for the spiritual preparation of young seminarians (seminaries), for the hospitality of the community of a mendicant order (convents), housing and the activity of the armed forces (barracks)
B / 2: non-profit hospitals and nursing homes. They are public hospitalization and care facilities, therefore non-profit
B / 3: reformers and prisons. The cadastral class B / 3 includes prisons for adults and minors
B / 4: public offices. By public offices we mean the INPS offices, the offices of the Revenue Agency and the territorial offices of the Chamber of Commerce
B / 5: scientific laboratories and schools. They are buildings built to host activities such as scientific research and education.
B / 6: academies, galleries, museums, art galleries, libraries (provided that they are not inside prestigious buildings and castles belonging to category A / 9). All the aforementioned non-profit cultural venues fall into the cadastral category B / 6
B / 7: oratories and chapels not intended for public worship. Buildings built to practice religion (not in public)
B / 8: underground warehouses for food storage. All warehouses arranged at a lower level than the ground floor whose function is to collect stocks
C / 1: commercial premises. The properties identified by the cadastral category C / 1 deal with the sale of products, such as shops and shops
C / 2: storage rooms and warehouses. Structures used as evacuation rooms, storage of goods and attics
C / 3: workshops for arts and crafts. Unlike commercial premises, buildings of cadastral class C / 3 are not intended for the sale of products, but for their creation or transformation by the craftsmen
C / 4: premises and buildings for non-profit sporting establishments. All private facilities where you train or where a sporting event is staged
C / 5: non-profit healing and bathing water establishments. Like category C / 4, these are private establishments
C / 6: non-profit garages, sheds, stables and stables. Structures such as garages, parking spaces or car boxes, but also stables and stables
C / 7: open or closed canopies. Any structure associated with a gazebo or canopy
D / 1: Mills. The factories are the factories, the warehouses, where the raw material is processed and transformed into a product non ho capito
D / 2: for-profit hotels. Hotels, hotels and other accommodation facilities where tourists stay for a fee
D / 3: halls for shows and concerts, cinemas and theaters for profit. Plants where one or more artists perform in front of a paying audience
D / 4: for-profit hospitals and nursing homes. Private hospitalization and treatment facilities, where medical services are offered for a fee
D / 5: insurance, exchange or credit institutions for profit. The cadastral category D / 5 identifies banks and private insurance companies
D / 6: premises and buildings for profit-making sports establishments. Stadiums, sports halls, swimming pools and all sports facilities where the public has access by paying a ticket
D / 7: buildings built or adapted for the special needs of an industrial activity and not susceptible to different destination without radical transformations. Structures created specifically to carry out a specific activity, such as refueling stations
D / 8: buildings set up or adapted for the special needs of a commercial activity and not susceptible to a different destination without radical transformations. Shopping centers are included in class D / 8
D / 9: suspended or floating buildings secured to fixed points on the ground, private toll bridges. Buildings, constructions that do not have their own land
D / 10: rural buildings. This category includes all the old buildings outside the urban area
E / 1: stations for air, sea, land and transport services. Airports, ports and railway stations belong to cadastral class E / 1
E / 2: municipal and provincial toll bridges. All public bridges for which each driver is required to pay a fixed fee
E / 3: buildings and constructions for special public needs. Facilities such as kiosks and newsstands that sell newspapers fall into the category
E / 4: closed enclosures for special public needs. The enclosures that delimit an area where, for example, a public grocery market is held
E / 5: buildings constituting fortifications and their dependencies. These buildings are permanently exempt from the payment of the IMU, like all the other structures present in Group E
E / 6: towers, traffic lights and lighthouses to make the municipal clock for public use. The same applies to the structures of the cadastral category E / 6, permanent exemption from the payment of the IMU
E / 7: buildings intended for the public exercise of worship. In cadastral class E / 7 there are religious buildings such as cathedrals and churches, inside which masses and other religious functions are celebrated
E / 8: buildings and buildings in cemeteries, excluding sepulchres, columbarias and family tombs. Structures for which the exemption from the single municipal tax applies
E / 9: special purpose buildings not included in the previous categories of group E.
F / 1: urban areas. All areas located on the ground floor of buildings stacked in the urban area fall into the cadastral category F / 1
F / 2: collaborating units. Unusable structures, for which accessibility is not granted
F / 3: unit under construction. Properties that have not been finished.
F / 4: unit being defined. Compared to the buildings of the cadastral class F / 3 the difference is subtle but important. This category includes properties for which neither the intended use nor the size has been established
F / 5: flat roofs. Flat roofs are, for example, terraces or free areas located above buildings and are part of the common parts of an apartment building
F / 6: building awaiting declaration. Any building for which the registration request has not yet been submitted
F / 7: infrastructures of public communications networks. The cadastral category F / 7 identifies all those structures built by telecommunication companies for public networks (see broadband)