€1 houses in Italy are a huge draw for Singaporeans: but is it too good to be true? – Singapore real estate blog

The idea of ​​selling houses for €1 (about $1.40) is said to have started in southern Italy in the 2010s. Since then, however, the trend has caught on and there are offers for those even in northern Italy. We have also seen a lot of discussion about this, on sites like Reddit. For Singaporeans locked down in the tropics, this can be an enticing prospect – but is there a hidden catch, and is this the real price of property? Here’s what you need to know:

Why would someone sell a house for $1?

Italy has many beautiful little towns that nevertheless teeter on the on the verge of extinction. The population has aged, jobs are scarce, all the young people have left for the cities, and cities like Mussomeli can be difficult to access. As such, selling homes at discounted prices serves two purposes:

caltanissetta mussomeli
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First, it helps revitalize the city. These houses, when left untouched for years, can be an eyesore, and revamping these places can help bring the town back to life. Even if you just go there as a tourist and use it as a vacation home, it can help boost their economy. Secondly, it is part of an Italian tradition to preserve these abandoned houses – some of which may date back centuries (this is important for the reasons described below).

So there are good reasons why cities do this, and you can rest assured that – if you use the legitimate sites and sources – it’s not a scam.

How someone closed a house in Italy

Although not the same as Mussomeli, we note that someone has actually detailed the experience closure of a unit in northern Italy. This is from the US perspective, but most Singaporeans would face the same costs and administrative requirements.

Here is a list of some of the costs:

Listing agent commission: €3,000 excluding VAT

Law firm fees: €5,500 plus €450 for the travel of the representative to the closing.

Notary fees: €4,900

If you want to follow the same path, however, there are some things you need to know before venturing any further.

Important things to keep in mind

Before rushing to find your Italian home, keep in mind that the total price will not be a single euro. Although it is still much cheaper than a place in Singapore, you should know the following:

  • Remember HDB eligibility rules before purchasing
  • Lots of repairs will be needed
  • These properties can be difficult to resell
  • Appropriate legal representation is important
  • We must preserve certain facets of the house
  • Ownership is not tied to residency status
  • You’ll probably have to pay for most things up front
  • There may be better options that are still cheap

1. Remember HDB Eligibility Rules Before Purchasing

Remember that to buy an HDB apartment, you must not own any private property either in Singapore or overseas. Similarly, HDB does not allow you to purchase private property until you exceed your minimum occupancy period (MOP) of five years.

Some people may whisper that HDB will never know, but we don’t recommend taking that risk. If your apartment ends up being confiscated, we don’t know how viable it will be for you to move to Italy.

If you need an HDB apartment or are still in your MOP, don’t try to stealthily buy private property overseas.

2. Lots of repairs will be needed

Wherever you choose to buy these homes, the sales team will insist that you go and see them first. Many of these properties have been abandoned for years or decades – expect everything from dead pigeons in the rafters to stairs that are no longer safe to climb. Some of them may be so dilapidated that they are structurally too fragile to even enter.

This means, in effect, that the total cost of the house will certainly not be 1 €. Renovations and furnishing are inevitably necessary; and as with any renovation project, the price is an unpredictable but. This will depend on the condition of the property and how luxurious you want it to be.

mussomeli one euro
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Either way, keep in mind that $1 homes are invariably sold “as is”. You should get a qualified inspector or renovator (i.e. in Italy) to examine the houses and give you an estimate – this should be done well before you buy, so you have an idea of ​​the cost.

Another thing to know is how much time you have to complete the renovations. Most cities with these programs will impose a delay, up to about five months. This is to prevent people from buying the properties as new or hoarding the land and then letting them fall apart. They want you to commit to investing in the renovations – it is, after all, part of the deal. If you breach this end of the agreement, you may have to forfeit your deposit, which can vary from €1,000 to €10,000.

For Singaporeans, who live so far away, this can pose some problems. You must be prepared to take the time to supervise the work and ensure that everything is done satisfactorily and on time.

3. These properties can be difficult to resell

Remember that you are dealing with properties in some of the more remote locations; and where other buyers have no shortage of other homes to choose from (that is, after all, why homes are so cheap). Don’t expect to buy somewhere in a well-known town in Italy.

This means that if you decide you no longer want the property, you may find it difficult to find a buyer. Keep in mind that even when the property is vacant you will have to pay local taxes and maintenance fees.

Try to calculate the various recurring costs and make sure you can afford them over an extended period, even if you don’t currently live there.

4. Appropriate legal representation is important

In Singapore, transfer fees are between $2,500 and $3,000. However, we understand that costs are much higher overseas – buyers have mentioned costs in excess of €5,500, with additional costs for representatives who need to travel.

Although costly, this is unavoidable; especially because most of the documents are not in English and you cannot rely solely on Google Translate.

Note that some of Singapore’s larger law firms may also be able to handle overseas transactions; you will need to check with various companies to see if the EU is within their scope. It may be better if you can find one, so you have a local contact.

5. We must preserve certain facets of the house

Based on our checks, every Italian city that offers these offers requires you to preserve the facade. You can’t tear everything down and build a contemporary home from scratch (that would ruin most of the charm and appeal anyway).

dilapidated house
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The preservation of the facade can have an impact on certain elements of the interior architecture (for example, you may not be able to knock out a new window where you want more light). This makes ownership a bit more restrictive, compared to a land unit (not kept) in Singapore, where you can do pretty much anything you want. It could also increase your renovation costs.

6. Ownership is not tied to residency status

Thanks to the power of the Singaporean passport, this is less of a problem for us than for many other foreigners. Nonetheless, Singaporeans should note that owning a property in Italy still leaves you feeling like a foreigner.

Singaporeans do not need a visa to be in the EU for 90 days. For more than that though, you’ll need to go to customs overseas. Keep in mind that if you plan to spend a good part of your retirement there, you may need to venture there every quarter or so.

7. You’ll probably have to pay for most things up front

Since 9/11, banking abroad has become much more troublesome. You may find it difficult to obtain financing from an EU bank, especially if you are not a resident. It can even be difficult to open a bank account there, let alone take out a big home improvement loan.

As for Singapore banks, there are no renovation loans available for properties overseas; you will need to take out a personal loan, which has a fairly high interest rate of six to nine percent per annum.

Indeed, most buyers will find that renovations and furnishings are paid for out of pocket. So even if the accommodations are only one euro, we suggest that you establish a budget (for example, 30,000 € maximum).

If the home you’re considering is blowing that budget, move on and try to find a better one.

8. There may be better options that are still cheap

Special thanks to E., for his help on this point. E. is Italian but currently resides in Barcelona; he rents properties in Italy and Spain.

E note that the €1 house is just a hook to get you into town. Sellers often point out how bad and dilapidated the houses are, because their real the intention is to sell you nearby homes that are in better condition, albeit more expensive.

beautiful house italy
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There may, for example, be a $30,000 house a few streets away from the $1 house. But it is in much better condition; and it could be that, after factoring in the cost of renovations, the most expensive home is actually the best deal.

E said that in practice many people who originally wanted a £1 house ended up with a more expensive, albeit more practical, choice. It’s a bit of a bait and switch; but it’s really better for some buyers.

After all, even if you were to choose the most expensive houses, a price between €30,000 and €50,000 is still very cheap compared to the cost of houses in Singapore.

If you are looking for some of these properties, here are some of the sites you can visit:

You can find such 1€ houses for sale on 1eurohouses.com, case1euro.it, estate-in-sicily.estateand renovita.

All in all, for Singaporeans who can afford cash, these houses can be a worthwhile holiday retreat; especially if your ideal location is a quiet rural location. We wouldn’t call it an investment, however, unless cities see a sudden turnaround in tourist interest.

Finally, while a lot of things can be bought on the internet today, this is one of the things you really need to take a trip on your own. You have to see it for yourself to make an informed decision.

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Cover image credit: Source

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