I've been offered a chance to invest in a new development in the Calabria region of southern Italy. The info i've been given states prices in the region are rising at an impressive 25-30% p.a. Is this the case, and is it likely to continue? Also, what is the situation regarding mortgages, stamp duty, capital gains tax, inheritance tax etc in southern Italy? Your help is greatly appreciated- thanks.

Stuart, Whilst you may get a reply to this this site is mainly aimed at Eastern Europe. I would suggest doing some research yourself rather than expecting answers to all your questions by posting on a forum dedicated to Eastern Europe.

Not so! We have excellent contacts in Italy and I hope to be able to answer these questions very shortly. There are in fact some recent tax changes in Italy that make property investment pretty attractive.

Not to mention the fact that while Property Secrets main focus for actual investment may well be in CEE, this forum is open to anyone interested in property investment - anywhere in the world - so you are likely to find answers regardless.

A forum for property investors seems like a pretty reasonable place to ask the question to me.

Sorry Stuart but at least its uncovered some positive Italy news for you!

Thanks Robin, I look forward to hearing from you. Stuart

Hi Stuart I've been keeping an eye on and off on Italy for some time and Calabria is an area which interests me. I am thinking of going over in the summer to take a look. I very nearly bought property in Abruzzo a couple of years ago and would thouroughly recommend taking a look there as it's fantastic - mountains and the sea. Very unspoilt. In the end I decided there were better places to invest and if I fancied spending some of my retirement there in years to come I would have made more money to be able to afford it elsewhere. Other factors included the cost of purchase which is quite high, the extortionate cost of keeping a bank account open and the difficulty in managing at distance. I have experience of holiday rentals in France and they're hard work. My suspicion is that I'll come to the same conclusion in Calabria. Incidentally I'm writing this from Corsica which is very similar to Abruzzo and similarly rustic but a bit more expensive....and you're more likely to have your house burned down by a Corsican separtist! Huw

Hi Stuart Here, as promised, is a response to your question. Apologies for the delay. One thing to bear in mind, though, is the secondary market - is this development aimed at the holiday market, or the domestic market? Who will you sell to - another foreigner, or an Italian? I suspect, it would be another foreigner, but I can't tell from the limited details you've posted. Foreigners can get mortgages in Italy on terms of up to 100% LTV with modern banks such as INGdirect or Mutuionline. Traditional banks will issue mortgages for up to 80% LTV. The amount you will get from the bank will depend on your income and monthly payments will not generally be allowed to exceed a third of your net income. Ordinary Stamp duty on the property is 10% of the fiscal value. But the fiscal value will probably be around 50% of what you actually pay. If you register as resident in the local townhall within 18 months of purchase then you can get tax relief of 7% and the public notary will charge only 3% stamp duty. With resident status, you can also claim ‘prima casa’ and no pay cap gains when you sell. Even if you are not officially resident, there is no capital gains after five years – and the same for subsequent investment properties. Apart from stamp duty, you will have to pay two other taxes: Imposta ipotecaria, which is 168 euros and Imposta Catastale, which is another 168 euros. Notary fees are in the region of 1% to 2% of the fiscal value of the property. Agency fees vary between 3% and 6% of the purchase price. All bureaucratic dealings in Italy are complicated, even if you speak the language well, and the advice of a good Commercialista (like an accountant) is highly recommended. A Commercialista will be able to calculate the fiscal value on which all taxes are calculated by checking the rateable value of the property as it is registered in the Cadaster. They will also be abl to offer invaluable other guidance. Price growth in Calabria is not as strong as in Puglia where you are looking at maybe 50% growth due to the opening up of the area around Salerno by low cost airlines – and, of course, demand for the little Hobbit-like houses, the Trulli, is enormous. In Calabria, with inevitable local variations from Reggio Calabria to Catanzaro, we are looking at a growth of about 20% - less, but steady.