Italy’s €1 houses are back in time for the holidays

Looking for a holiday gift but still not found the perfect one? Here’s a last-minute idea: a home in Italy, yours for less than the price of a cup of coffee.

Yes, another month, another set of idyllic Italian village cottages up for sale — and yes, it’s all part of the bid to breathe new life into remote rural locations that have been quietly dying off.

However, if you’re used to the usual model — town authorities wanting to attract new residents and offering cut-price houses or subsidized living to entice them — this is a little different.

In the regular schemes, buyers generally have to put together a proposal for what they’ll do with the property and lay down a deposit that will be refunded only if they finish the renovations within a specified time. Renovating a house in Italy, it must be said, is not without its challenges — especially when it comes to taking advantage of the generous tax breaks offered for restoring properties in rural areas.

Enter Nicolò Bolla and Alessandro Barba. The business partners — from Emilia-Romagna and Sicily respectively — have set up a new site that aims to list houses available from 1 euro ($1.20) from all over the country.

A one-stop shop

“The main thing is we try to simplify the process, not just with technology but with all the possible tax breaks and immigration,” says Bolla.

“We don’t want people to be stuck in a deal, that they have a home but no papers to get there. They may need immigration help, or support setting up a business in Italy — we want to create a one-stop shop.”

To do so, they’re pooling their respective professions — Bolla is an accountant, Barba an immigration and relocation expert — to help buyers with the entire process, whether that’s renovating their dream second home or moving to Italy.

And, appropriately for the age of Covid-19, their aim is to do everything online (a requirement in some other towns is that bidders must either make their offer in person or hire an appointed representative, such as a local attorney).

“When Covid goes, we can do tours, and see the property beforehand, but at the moment, everything can be done online”, says Bolla, who believes “the old-fashioned procedure doesn’t work anymore”.

What’s more, he says that their new service will significantly downplay the “friction” that can arise in town-led projects. “We can deal with the bureaucracy,” he promises.

After going live over the summer, their website, Auctions2Italy, has now launched 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 close to the pair’s heart: Bolla is from Vetto, though 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 go elsewhere to work,” says Bolla, whose family used to own a hotel near the village, which is sitting empty (though Bolla dreams of making it a long-stay place for digital nomads).

“Any time I come back, I revert to how I was. These small towns — of 2,000 people or fewer — have a really big sense of community, which I really want to be a part of. We want to repopulate those areas, keep their sense of community”.

There is also the matter, of course, of cost, when it comes to buying in Italy. You’ll never find a house for sale for €1 in a big city or in popular rural places such as Tuscany. However, Italy’s small hilltop towns in less fashionable rural areas have never recovered from post-World War II emigration. Many have dwindling populations, with mostly retired residents. Authorities are keen to attract new blood to stop the towns dying out.

Prices intentionally low

Of course, whichever scheme you go with, the house will end up costing far more than one euro — renovations can stretch to tens of thousands of dollars, depending on the work that’s needed.

Bolla and Barba’s site aims to be transparent about the process. Of the six they’re starting out with (the plan is to expand the service), the two houses in Mussomeli have no reserve prices — so you really might snag them for €1. The others have a reserve of between €3,000 to €5,000 ($3,700-$6,100) — the choice of the seller. However, all auctions are capped at around €10,000 ($12,250), so you will never pay more than that, however many people are bidding against you.

“Our idea is that people shouldn’t battle to get the market price,” says Bolla. “It makes no sense if people end up spending more in an auction than what they’d be able to buy on the free market.

“We want the prices to stay low — otherwise we might as well be selling mansions. We don’t want to do that — the idea is to help municipalities to revive.

“We don’t want homes to go for €50,000. If you pay less, you have more incentive to renovate, and more budget to develop your projects in Italy.

“I have seen many people leaving Vetto, and the best way to help is to bring in new people. If the house prices are too much, they won’t come. So this is sort of an invitation to come.”

‘Free’ renovations

Other towns have launched websites before — including Mussomeli, which launched its own scheme through the website Case1Euro. Bolla and Barba’s website is a little different from community-run sites, however.

The website functions as a go-between between buyer and seller, without taking a cut of the sale price. There are no fees to sign up or make a bid. Bolla and Barba’s only earnings will be if the buyer decides to employ them for additional services such as immigration or tax help.

Italy has generous tax incentives for those renovating properties: currently, you can be refunded 110% of what you paid for renovations toward making a home more energy efficient, 90% toward repairing a building’s façade and up to 60% of what you spend on regular renovations.

Normally, these “refunds” come in the form of tax credits, spread over five years. However, Bolla says that non-tax residents can potentially “trade” the credits, either with a building firm, which effectively does the work for free, or with financial institutions, where they swap the credit for cash, knocking some money off in the process.

And if you want to move to Italy, not only can Barba help with the immigration process, but Bolla can navigate you through the country’s notoriously complex tax process.

“Tax regimes favor newcomers,” he says. “If you work remotely from Italy, you can get a tax discount of 70% for the first five years. If you move to the south, the exemption is 90%. Or if you’re a pensioner moving to the south, you pay just 7% on your foreign income for the first 10 years.

“There’s bureaucracy to go through, but we can definitely help”.

Why the houses are so cheap

Unlike many of the authority-run schemes, where you have to pay a deposit that’s refundable if you complete the renovations in a specified period, there’s no penalty here. Although if it’s a second home, you’ll need to pay property tax. And if you’ve ever wondered what the catch is — why anyone would sell their home for the price of a cup of coffee — it’s because they can’t be bothered to pay the tax on a home they’ll never renovate, says Bolla.

“The benefit for the sellers is simple. The houses have been sitting there for a while, the owners are paying property tax, nobody wants to buy them so they need to go through an agent.

“The agent is unlikely to promote the house — what would their commission be on a $20,000 sale?

“Houses are often owned by five people, who’ve inherited it from their grandparents. They might live far away, they may already have two homes, which is common in rural areas. They’re not willing to renovate.”

In situations like that, a newcomer offering to take the hassle off your hands 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 them?” he asks.

Digital nomad-friendly

Auctions2Italy has started with Vetto and Mussomeli, because of the two founders’ personal links to the towns. The authorities in Vetto in particular have declared themselves keen to attract new blood, and say they’ll aim to fast-track any paperwork.

However, Bolla is hoping that if it goes well, other municipalities and private owners will get involved.

“We don’t want the constraints that some of the other schemes have had,” he says. “We want a freer process — one that says to towns, hey, you have new residents, new deals, this is good.”

One thing worth noting — they’re only working with towns that have superfast W-Fi, in a bid to attract digital nomads. So although you’ll be in the countryside, you won’t be completely cut off.

Fastest finger first

So what’s up for grabs? The first six properties are up for auction now, with the first auctions ending December 20.

There are two houses in Vetto — a little town of 2,000 residents in the green foothills of the Apennine Mountains, less than an hour from from the art cityif Parma, Reggio Emilia (on Italy’s high-speed rail line), and about an 80-minute drive from Modena, famed for its Romanesque cathedral.

Bologna is two hours away, and Milan two-and-a-half hours northwest.

Mussomeli, which has a further two houses, is a larger town of around 11,000 residents, in central Sicily, which basks in sunshine, even in winter.

Finally, there are two in Campofelice di Fitalia, a village in central Sicily not far from the better=known Corleone.