Recently there have been a lot of articles in circulation about new €1 house programs in towns and villages across Italy.
Is it tempting to snap up one of these bargain-basement homes? Why yes, of course! Who wouldn’t be interested in purchasing their own slice of La Dolce Vita for a song? But before you start packing your bags, let’s take a further look at what it really means to purchase a €1 home.
Restrictions for Purchasing €1 Homes in Italy
They say that there is no such thing as a free lunch and this analogy rings very true with these types of properties. Read the fine print before committing to one of these real estate investments, as many of these properties are full of hidden costs and restrictions. In addition, take a moment to think about WHY you are looking to purchase a €1 property.
The €1 homes are sold at a public auction with the starting bid at €1, but the price of the property will increase depending on how many bidders participate; many properties are finally sold at least around the €20,000 mark. You don’t have to be a math wiz to figure out that you are spending far more than you bargained for from the get-go
Once you’ve pulled the trigger on putting down thousands more than you had planned, you also need to navigate a minefield of restrictions. Some of the main restrictions related to €1 homes in Italy include:
Timeline for restoration
The lion’s share of €1 homes are in need of complete restoration from roof to foundation, which is costly, can take time, and can be rather tricky to navigate, especially if you are based abroad. Generally speaking, most €1 properties require that you complete your restoration project within a certain time frame. If you don’t remain within the legal time limit, there can be penalties, including having to return the property to the original owner.
Cost of restoration
Many people who are avid DIYers, might revel at the thought of purchasing a €1 home and restoring it themselves. However, there are certain limits to what you can do yourself.
Anything that is structural and systems like plumbing and electrical wiring require a licensed builder. You will not be able to undertake this work yourself. Hence, finding a reputable contractor is crucial to avoid the project running over the set timeframe.
Using the property as your main residence
If you are looking to purchase a €1 home to use as a second home, forget it. In most cases, using these properties only part-time isn’t possible; remember that the aim of these bargain-home incentives is to re-populate the villages where the properties are located, so they often require the future owners to live there as their principal place of residence.
Limited Tourism Potential of €1 Homes
Even if you do manage to snap up a bargain-priced property that can be used as a second home or vacation rental, imagine what these villages would be like from a tourism point of view. If they are mainly deserted, then they aren’t really going to be on the top of most travelers’ bucket lists to visit.
Bear in mind that these villages are generally located in extremely remote areas of Italy, away from major towns, airports, highways, and popular tourist hotspots. Because of this, they lack appeal as a holiday rental destination.
While it is amazing to really experience “la vera italia” in all its rustic beauty, many people who come to Italy on holiday also want to be able to experience the vibrant “movida” and lifestyle that Italy is famous for.
Some larger towns have begun €1 home schemes, but it’s important to do your due diligence on the town itself prior to starting the purchase process.
Recently, for example, the seaside town of Taranto announced that it is offering a selection of properties for €1, making it Italy’s only major town with this type of real estate program right now. Puglia, the region where Taranto is located, is going through an incredible boom and the thought of purchasing a property near some of the best coastal areas that Italy has to offer is tempting. But buyers need to be aware that this area has major environmental issues due to the proximity of the ILVA steel plant in the outskirts of town, linked to countless deaths due to the carcinogenic fumes the plant emits.
Significant Restoration Costs
Almost all the properties offered under €1 home schemes are in dire need of a full restoration. It’s almost impossible to estimate what that would cost sight unseen, but most purchasers would be looking anywhere from €30,000 to €50,000 to have it restored, at the very least. This high cost makes it unlikely that you would ever recoup on your investment between initial costs and subsequent remodeling if you later decided to sell the property.
There will be costs associated with contracting various professionals such as a “geometra” (surveyor) and potentially an architect or engineer for the technical side of the restoration, plus skilled laborers and builders for the hands-on work.
You also want to ensure that the materials used are both high quality and are designed to protect the property. For example, if you purchase a property in an area that has seismic activity, you want to make sure that anti-seismic materials are used by the building company.
Generally speaking, the €1 homes are located in historical centres, where parking can be problematic. So for any building works that require a large truck or skip bin to be nearby to collect all the debris, this space issue can create problems and escalate costs if the building company is not able to park outside the property.
And then there is the fact that you will need to find local contractors that you can trust, easily communicate with, and have the peace of mind that the project is going to be done according to the timeline and budget while using quality materials throughout.
Not an easy thing to project manage from abroad!
If you are on a budget and want to buy a little slice of Italy to call your own, you don’t necessarily need to go through the process of a €1 home.
There is an abundance of low-cost properties that are located throughout the country that are habitable, have no restrictions, and are not tangled in the myriad of bureaucracy and red tape that come with the €1 homes.
Happy house hunting and here’s to you taking that step towards making your Italian dream an achievable reality!