Don't Let This Tax Sour Your Sweet Life in Italy

Dear Europe Fan,

I’ve decided to head for the forest of Fontainebleau for some fresh air and flowers. As it’s too late for bluebells, I’ll be looking for lilies of the valley, as you read this. The tiny, fragrant, white, bell-shaped flowers are traditionally offered on this day and are often sold in the markets, or on street corners by kids from the suburbs hoping to make a bit of extra pocket money. This being France, edible versions are also available; my favorite cake shop has already started arranging delicate chocolate versions on the counter, out of the sun.

May 1 is Labor Day throughout the EU and the first of several public holidays (see sidebar). In this issue you’ll find a few ideas about where to go if you’re planning a mini European break this month.

Enjoy,

Leigh Fergus
Editor, The European

P.S. Our next Live and Prosper in Europe seminar will be held this September 2-4 in Barcelona. Email events@internationalliving.com to reserve your place today.

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Your home in Italy: Five things to know before you buy

by Donna McCarthy

1. Budget carefully
Italy has some of the highest fees for property purchase in the EU, usually including a registration tax, land registration tax, notary fees, realtor fees, legal fees, possible surveyor’s fees, and VAT. Make sure you know exactly what fees are applicable before signing anything.

2. Get help
As in most other countries, you’ll need a reliable notary, preferably bilingual. Fees range between 2% and 5 % of the sales price for a notary. The notary should inform you of future construction sites nearby that might affect property values, and investigate any debt that might be linked to the property.

3. Names and numbers
A notarized fiscal code or tax identification number is required to purchase property in Italy; a notary or real estate agent can help you obtain this number, if you don’t want to go to the local tax office yourself. If the property is to be held in more than one name, each potential owner must have a fiscal code. This code is also needed when opening an Italian bank account.

4. Luxury levy
Be aware that VAT of 10% is usually levied on new property rather than 7% registration tax for non-residents or second-home buyers. This rises to 20% VAT on “luxury” new homes (those with a rating of A1 in the property register) so make sure that your dream home doesn’t have the five or more “luxury” features such as elevators that qualify it for this rating.

5. Banking matters
Expect to pay commission on either end when transferring monies to euro. If your purchase price is quoted in euro, be sure to keep the exchange rate in mind when making scheduled payments, or check out currency brokers. Currency brokers can lock in today’s rate for an exchange in the future (up to two years)—very useful if you’re making installment payments or mortgage repayments and need to know exactly how much your property will cost you in dollars.
Further Reading:
Right at this moment, you can buy your own home in an undiscovered--but stunningly beautiful--corner of Italy's sun-kissed south for as little as $85,000.
Read more here.

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Homage to Catalonia:
From the Surreal to the Spandex

by Lori Hein

The Costa Brava is peppered with seaside treasures such as Tossa de Mar’s 12th-century hilltop castle, the colorful boathouses of Calella, and Empuries’ oceanfront Greco-Roman ruins. But whitewashed Cadaques on the wild Cap de Creus peninsula is one of this coast’s most beautiful towns. Take the twisting road that winds from a vine-dotted plain down to Cadaques and its natural harbor, where fishing boats bob and dive boats wait, and see for yourself.

Captured by artists
The view of Santa Maria—the town’s elegantly spare 16th-century church, huge and white above the cobble-stoned village and the blue-green bay—grabs you like a glorious painting. The play of light, rock, and water in Cadaques has been captured by many artists, such as Salvador Dali, who lived most of his life in Port Lligat, an easy walk from the harbor. Over a 40-year period, from 1932 to 1971, Dali and his wife and frequent model, Gala, transformed a row of adjoining fishermen’s cottages into their home and studio. The house is now a museum and attracts a number of surrealism seekers, from Dali devotees to the just plain curious.

From Cadaques, you can head inland toward another treat—medieval Girona. Set against a mountain backdrop, the town commands a dramatic position at the confluence of the Ter and Onyar rivers, and the city’s best ancient and medieval quarters lie on the hilly side of the Onyar. Cross the footbridge over the river, pausing to take in centuries-old ochre riverbank tenements and their waterborne reflections, and then climb the majestic 17th-century, 90-step staircase to the cathedral, where you can admire a chancel dating from 1312. The cathedral square makes a good starting place for a walking tour of the old town and its narrow, cobbled alleys, ramparts with Roman-era sections, 12th-century Arab baths, and the Call, the ancient Jewish quarter. The Call’s steep passageways radiate from Forca Street, next to the cathedral.
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From Girona, it’s an easy 50-mile drive to the nearest ski resorts at Ribes de Freser and Setcases in the Pyrenees. Or, if you haven’t quite had your fill of tapas and Gaudi, head back to Barcelona, just 62 miles away.

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Trapped in the crypt

by Leigh Fergus

Auxerre is on Paris’ doorstep, yet this regional town is a million miles from the avant-garde energy of the capital and has continued on its course seemingly unchanged through the centuries. A rewarding detour on the burgundy wine-trail, Auxerre deserves more attention.

Where time stands still
The back streets of this provincial town are movie-set perfect for a historic drama.
Wander past the brightly colored statue of St. Nicolas on his eponymous square or take a peek through the windows of the 17th-century Maison Defert and its glass workshop, and time stands still. The half-timbered renaissance houses lining the river in the quartier de la Marine tilt at odd angles over the lanes of this extensively pedestrianized town. The double clock tower gilt still glitters in the sun as it must have done when the structure was built in 1483, and the cathedral’s dazzling white, south-facing façade is as imposing as ever (after a recent much needed cleaning). You’d never know that this town is less than a two-hour drive from Paris.

Auxerre has enough sights and ambiance to entertain you for a day or so, although summer weekends you’ll find the river and roads choked with traffic as families in pleasure boats and modernized barges ply the water and tractors and trucks bring local produce to town.

Visible from a distance
When I visited this regional capital during Easter week,
I started with a trip to the two most imposing structures, the abbey and the cathedral. These two alone occupied me for a couple of hours with all the treasures they had to offer. Although the abbey is a textbook example of pre-Romanesque architecture, displaying the simple elegance of the Romanesque lines with intricate signs of Gothic decoration to come, it was started in the sixth century in order to house the relics of St. Germain—the local bishop-made-good. Inside is the Museum of Art and History’s archeological collection (my favorites are the little horse statues) and a crypt with the oldest frescoes in France.
Too late for the trésor
Too late I discovered that the cathedral’s trésor of illuminated Books of Hours and silverware could be admired in the little side chapel, having been distracted by a chatty 70-year-old woman who wanted to share her knowledge of the stained glass with me (miraculously intact despite the ravages of the last war). Instead, spending more time than I wanted getting to know the crypt, I was locked in by the overzealous key-man doing the rounds of the doors early. Ten long minutes later I was released and proceeded to drown my disappointment with a local beer from Sens on a breezy terrasse on the Place des Cordeliers. I’m determined to return.

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Bulgaria beckons—an introduction to a land of opportunity

by Michael Ussery

I made my first trip to Bulgaria in 1999 and instantly fell in love with the country—it has been my main interest ever since. Sure, there are plenty of other countries with natural beauty but I was sold on the people, who are smart and friendly, as well as the open atmosphere. Taking an entrepreneurial approach, I’ve studied the market broadly in Bulgaria and am focusing on real estate, a rapidly growing sector.

Ever since its entry into NATO in 2002 and its much-anticipated membership in the EU, Bulgarian properties have soared with investments, vacation-home buying, and retiree purchases, largely due to an influx from the UK and Ireland. Each year high ski resort prices at home are leading more Northern and Central Europeans to discover Bulgarian ski vacations. Bulgaria’s Black Sea is a favorite beach destination for Germans and Swedes.
Double-digit growth
Cities such as Sofia, Plovdiv, and Varna in particular are rapidly attracting foreign real estate investment, as are condos on the Black Sea and in the greater Bansko and other ski regions. Bulgaria has sustained double-digit real estate growth with these key areas hitting over 15% and 20%. Adding to this heady mix, taxes have been lowered and the government has consistently encouraged foreign investment. In addition to mountain ranges, Black Sea coast, lively cities, ancient Thracian and Roman ruins, and culture, Bulgaria also boasts a low cost of living—dinner for two, with wine, in an excellent restaurant can cost less than 20 euros ($28). Bulgaria has it all.
Consequently, foreign investment in real estate and retirement homes is rising. Those moving here are enjoying Bulgarian life with all the modern conveniences they’re used to: shopping malls, cinema complexes (Sofia has an IMAX theater), etc. As well as exploring Bulgaria, expats here also have easy access to Greece and Turkey, which are just a few hours from the center of the country.

I tried to stay out of the real estate market at first, but I couldn’t resist such a hot market . I’ll be writing more about opportunities and practical matters in this country—watch this space.
Meet Michael
Michael Ussery will be speaking at our Live and Prosper in Europe seminar in Barcelona, September 2-4. For a complete list of speakers and seminar details email events@internationalliving.com.

[Editor’s note: Michael Ussery was the youngest U.S. Ambassador in the world when he served under the first President Bush in Morocco. After his term, he began investing in East Europe, the Middle-East, and East Asia. In the mid-1990s, he co-founded the Romania-Moldova Direct Fund, formed with World Bank support, before setting his sights on Bulgaria. He and his partners are currently identifying top projects for international investors and developing their own projects in Sofia and the Bansko ski resort. For more information email mussery@hotmail.com]

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