Buying a €1 home can sound very appealing, but it is important to understand the hidden costs involved. Properties sold for this price are often unsafe or in a state of serious disrepair, so spending on renovation work is compulsory.
Homes sold for €1 are handed over by their owners to municipalities, which then sell them through a public procedure for the symbolic price of €1.
The hidden and unexpected costs of €1 homes
The hidden and unexpected costs of €1 homes
What are the hidden costs of a €1 home? Does a property bought for €1 really cost just €1? Buying a €1 home can be an advantage, but carrying out the property’s renovation plan is essential. There are also several fixed costs to cover, regardless of the home’s size or condition.
Fees also vary between towns. The main costs include:
- Property taxes: once ownership is transferred, taxes due on the property must be paid regardless of its condition. For anyone who already owns a home in Italy, the new property is treated as a second home, meaning additional taxes apply.
- A renovation plan.
- Notary and professional costs: accountants and lawyers deal with the necessary paperwork, residence registration and similar procedures. These costs may reach €1,000 before the property has even been purchased.
- Accounting costs.
There are also variable expenses, including the cost of renovation, tradespeople’s fees, and appliances and furnishing. Buyers therefore need to be aware that these are often derelict or structurally unsafe properties requiring substantial renovation.
Italy applies property taxes, so the owner is required to pay charges on the purchased property, regardless of whether it is abandoned or a luxury home. In addition, for anyone who already owns a main home, the new property is treated as a “second home”, with the relevant taxes again becoming payable.
A further expense that is often overlooked concerns the work carried out by accountants and lawyers, who handle documents, residence registration and similar processes. Those arriving from abroad may face significant fees for accounting or legal services, which can be higher than €1,000.
How to avoid additional costs
Before buying a €1 home, it is important to be aware of property taxes, notary costs, accounting fees and renovation expenses. It can also be sensible to budget for professional advice before going ahead. Financial, legal or building advice may be helpful depending on the property being considered.
Visiting the location where the property is being considered can also help, giving buyers a clearer idea of the area and its residents and helping avoid projects that may later bring financial surprises.
€1 homes: the commitments buyers must meet
Buyers taking part in the €1 homes initiative must meet several commitments, including:
- The municipality requires a €5,000 surety bond for three years, which is refunded when it expires. This procedure acts as a guarantee of the buyer’s commitment.
- Preparing a renovation and property improvement project within 356 days of the purchase.
- Paying notary costs for registration, transfer of ownership and land registry matters.
Finally, renovation work must begin within two months of the new owner receiving the relevant permits.
Many villages in Italy require buyers to provide a deposit of up to €5,000, as explained above. There are exceptions, however.
- The town of Cinquefrondi in Calabria requires an insurance policy costing just €250 per year until renovation work is complete. If the new owner fails to meet their obligations, they must pay a fine of around €20,000.
- Laurenzana, a village in Basilicata, does not require a security deposit. If renovation work is not completed within the required timeframe, the property is returned to its original owner.
€1 homes: pay close attention to the call for applications
It is important to pay attention to the details in the call for applications. Homes for sale require mandatory maintenance work within a relatively short timeframe:
- Buyers have one year to prepare the project.
- Buyers have two months to begin work and three years to complete it.
The municipality may also require a €5,000 surety bond as a guarantee, refundable once the work is completed. Among people applying under the scheme, priority is given to those who state that they intend to move their official residence to the new home.
