Archive for June, 2009
Rest in Peace Michael Jackson – the Moonwalker!
The world lost one of the biggest talents in music Michael Jackson! We are all devastated by the death of the great musician, singer dancer a showman and would like to say one last good bye to the man.
We can say so many things about The King of Pop – Michael Jackson, but also so much has been said… What is very significant for us is the magic that happens with the death of someone, who was so important to the whole world. This magic made us forget about politics, wars, crisis, etc., they somehow faded.
Rest in Peace Moonwalker and thank you for doing the magic again!
Italian properties. Legals and taxes
Italy Investment Property – Tax Planning
Italy’s tax system can be complicated and it is important to consult an expert tax advisor when considering your Italian property investment. Here you can obtain a brief guideline to Italy’s property tax system.
Italian property tax, ICI, is charged to anyone who owns land in Italy and this is charged at between 0.4 and 0.7% depending upon the local authority and the size, location and category of property you purchase. If the property is classed as uninhabitable or it is being restored, the tax is reduced by 50%.
ICI is paid in two installments – 90% by the 30th June each year and 10% between the 1st and 20th December. If the tax is not paid on time, a surcharge of up to 200% can be levied.
Tax on Rental Income
Tax is charged on income received from your property rentals in Italy and you can deduct from this any of your expenses for property maintenance. The rate can be anything from 19% to 46% depending on the property and rental conditions.
Capital Gains Tax
Italy has not charged capital gains tax since 1993 and instead it is incorporated into the ICI.
Inheritance/Wealth Tax
Unlike many other countries, Italy does not charge a wealth tax.
Stamp Duty
If the property is purchased from an individual, the rate is 11% of the government valuation. The value of the property is not the purchase price itself, but the figure assessed by the local tax office and it is calculated from official tables.
UK-Italy Tax Treaty
There is a double tax treaty between Italy and the UK and this protects the investor from paying tax on his Italian assets in both countries.
Buy your dream home in Egypt!
Buying property in Egypt is a straightforward affair provided you employ a lawyer to sort out an otherwise complex system of property registration.
Foreign purchasers have the right to own real estate and land in Egypt. Today the government recognizes the great value foreign investors in property have for the success of the economy and have set about actively encouraging overseas buyers to Egypt. New laws have been established to make the Egyptian property purchase procedure more secure. For example, the government can no longer impound or nationalize any property they wish – a practice that stood for centuries. These changes, along with a few others, are increasing confidence amongst overseas buyers.
1. Make your choice! You will have to choose a property first and here you can use the help of our overseas consultants. Our agents will be glad to help you with your choice as well as to give you professional advice.
2. Make a reservation! Once you decide on a property, you will need to pay a reservation deposit to take the property off the market while contracts are drawn up.
3. Find a lawyer! Lawyers in Egypt will normally speak English and will be able to produce your necessary paperwork in Arabic, as required by all the authorities. Egypt has many complex real estate registration issues so it is critical to have a lawyer conduct the appropriate searches and provide you with legal advice regarding the purchase.
Local lawyers will also help you through the best way to conduct business with the local people who have their own particular idiosyncrasies and customs which are important to be aware of.
4. Take care of all Fees and Taxes! There are some taxes that you will have to pay around a property purchase in Egypt. They are as follows:
- Property registration and legal fees for conveyance total around 6%.
- Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).
- Tax on any form of income from property runs at 20 to 22% and is basically the alternative to Value Added Tax. Many countries enjoy a double taxation treaty with Egypt.
- Egypt levies no inheritance or capital gains taxes.
5. Property Registration. Most Egyptian properties are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer’s assistance in liaising with the Real Estate Registration Office in Egypt is essential in order to ensure the property is duly registered and prepared for foreign purchase. Registration can take up to four months. After inspections and payment of taxes/fees, you will finally obtain a new title from the Registry.
Red Sea Pharaoh Development Hurghada, Egypt
An excellent choice for anyone wanting to live right in the heart of Hurghada, with all of the town’s facilities right on your doorstep, and all at very affordable prices.Red Sea Pharaoh is a small, intimate development that will appeal to anyone looking for a friendly and personal touch – more like a club than a vast and faceless resort.
Dreams Development Hurghada, Egypt
Hurghada Dreams is a brand new gated development of hotel-style apartments (one & two bedrooms), commercial units and extensive facilities. The project is located centrally in Hurghada in a strategic location between downtown and newtown.This project presents a unique opportunity to invest in Egypt’s rapidly emerging property market.
Water House townhouses Hurghada, Egypt
Water House is a totally unique project to Hurghada that is designed by Europeans, for Europeans. It gives buyers the very best of both worlds – all of the comforts of a world class resort including its own private beach, beautiful landscaped gardens and three enormous swimming pools.
Bagging a bargain in Bulgaria: It’s a tough market but investors prepared to pay now will reap the rewards later
www.dailymail.co.uk, 28.05.09, excerpt
Carl Froch, the World Boxing Council super middleweight champion, is finding investing in overseas property just as satisfying as delivering a well-placed left hook. And it may turn out to be almost as lucrative.
‘What is the point of having money in the bank which is earning nothing?’ says Froch, 31, who lives in Nottingham. ‘I have been investing between 8,800 GBP and 44,000 GBP in property in Bulgaria and Turkey over the past 12 months.’
He’s put his money into small apartments, which he intends to rent out to locals rather than holidaymakers, and a suite in an ‘apart-hotel’, which he hopes will have a good return.
‘This sort of investment is perfect for someone like me who gets lumps of money in dribs and drabs,’ he says. ‘I see the properties as my pension as I don’t have other savings.’
Joe Upchurch, managing director of Aston Lloyd, from whom Froch has bought his properties, is a boxing fan. He has also sold an apartment to Joe Calzaghe, one of Froch’s heroes.
‘Upchurch is very experienced and knowledgeable and I trust his advice completely.
‘It’s all about timing,’ he says, and as a boxer, he should know.
Carl isn’t worried about negative comments about the Bulgarian property market:
‘That mostly relates to the south-eastern coast, which is like the Costa del Sol. I have invested in Kostinbrod, which is 15 minutes from the capital of Sofia.
‘This is an up-and-coming business district and the whole area is being revitalised. I am confident I will get a guaranteed income for the rest of my life, as well as seeing the capital value increase too.’
Reports show an 8.4 per cent increase in tourist revenue in 2008, with demand from foreign visitors and Bulgarian nationals expected to remain stable this year, backed by a government advertisement campaign worth the equivalent of 3.5million GBP to promote tourism.
Ross Elder, MD of holidaylettings.co.uk, says: ‘Inquiries for Bulgaria in the first quarter of 2009 are up 9 per cent. It’s a fantastic holiday option if you are seeking value for money on accommodation, flights and food.’
Many people piled into Bulgaria in the boom seeking a quick buck, only to go belly up.
But there’s still income and growth to be had if buyers do their ground work, on the developer as well as the property, take independent legal advice and buy good-quality property in the right area.
Overseas property consultant, Simon Conn, adds: ‘In good city locations, such as Sofia and the better-quality coastal developments, there are long-term possibilities.’
Buyers guide – Italian properties
Off Plan properties
Buying an off plan property in Italy is nice and simple. There isn’t a stack of paperwork to sign like France, and the tax laws are clear and attractive for investment.
To calculate the purchasing costs, you need to divide the process in the “Front end” and the “Back end”
At the front end how much you pay when you sign your preliminary contract will depend on the payment terms of the developer. For example you may have 50% upfront and then 50% on completion, or 30% upfront and 70% on completion.
In most cases you will have to pay a solicitors fee upon signing the preliminary contract which can be anywhere between 1% and 3%, depending on the solicitor. If you are paying a solicitor who is not an expert in Italian Property it is likely to cost you a lot more because he or she will need to spend more time researching to make sure your title is clean. It is also wise to use a solicitor who speaks your native language.
Under Italian law if a developer is building off plan they need to provide the customer with an Insurance Bond or Bank Guarantee for their initial deposit. If the builder should go bankrupt this insurance bond covers the full amount of the deposit.
When you pay your deposit upon signing the preliminary contract your money should be held in the solicitors Escrow account, until you receive a copy of your bond.
All banks and insurance companies in Italy are guaranteed by the Central Bank and so if the particular company who has provided your bond goes bankrupt it is insured by the Central Bank of Italy. What this means essentially is your risk is much lower as you cannot loose your money should the builder be bankrupt.
Before you reach the “Back end” ie. before your property is completed and you can move in, you also have the option of selling the property, as long as the developer does not prohibit this in the preliminary contract.
From an investment point of view this can be very profitable.
Firstly if you sell before completion you are not required to pay VAT, which in Italy amounts to 10%, the notary fee which is in the region of 2%, and two other small Italian taxes which come just under €400.
In Italy there is no capital gains tax if you sell before completion, but should you be a resident of the UK or Ireland those governments require you to declare any income you make abroad.
If you intend to sell your property before completion, it is also wise to have an avenue to sell it through. For example will the developer resell it for you? And how does the developer intend to do that? If there is a high supply in the market it may be more difficult to sell your property. For example in Northern Italy the market is more mature so it would be more difficult to ‘flip’ a property then the emerging southern market.
On completion of your property you are required to pay the ‘closing costs’ mentioned above. You are required to pay 10% VAT of the purchase price of the property, alongside a notary fee and two other small Italian taxes which will amount to roughly 2%.
The notary is a legal body in Italy nominated to complete all the legal details in a completion of sale. The fee however is not a standard 2%, it will often come down to the purchase price of the property. For example if you are purchasing a Villa for €500,000 the fee will be lower then 2%, as €10,000 is too much to pay a notary for a single property transaction.
Should you decide to sell your property within 5 years of it being completed you a required to pay 12.5% capital gains tax to the Italian government. If you sell it after that 5 years, currently there is no Capital Gains Tax.
There is a dual taxation agreement between the UK and Italy, and The Republic of Ireland and Italy which means in your country of residence you are required to pay the balance between the varying tax rates. For example if the rate was 20% in Ireland you would have to pay the extra 7.5% in Ireland when you declare your income.
There is also no inheritance tax on property in Italy. The particular law relating to this is called ‘Uso Fruto’. For example if you put your sons name on your title deeds along with your own, he does not have claim to the rents generated or he cannot sell the property from under you; however if you die the property is passed straight on to your son tax free, as his name is already on the deeds.
Overall the risks in purchasing off plan in Italy are very low because your money is insured; so in comparison to many of the other markets in Europe it is a much safer bet. Usually the financial return on Off Plan property compensates for the risk involved in purchasing something you cannot see and touch yet. In Italy the risks are far lower then a country that may not have an insurance bond or bank guarantee as law; with the main benefit to the buyer being that the potential returns are not affected by this reduction in risk, which makes it a better investment overall.
We cant wait to come back to see you all again
Jun 29th, 2009 Posted by Eli in Customer comments
hi Elizabeth thanks for giving us the oportunity to place on record what we think
of you, Ivan,Trendy, Giorge and Lana, Nelly and your company. Absolutely fantastic.We
owe all you so much in helping us to achieve our dream,that is to have our own
holiday home.in a wonderfull country .You helped us all the way .You have
been friendly honest constantly keeping in contact and guiding us through every
obstacle and you still are . We feel very fortunate that whilst we were looking for
a property to buy we came across you .We know that we are in very good hands
thanks for everything we love our home we love where it is and when the work is
finished we know you will look after it for us We cant wait to come back to see you all again and have that bbq at our house best regards to you all.
Tony, Jane and Elizabeth in Sofia, June 2009
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