House in Italy, mortgage where?

Resi_in_Italy

Dear all,
i am a little bit at the deep end here.
my morther very recently died in italy leaving me and my sister both living in UK as sole people to inherit from her.
I just returned form the bank who in true italian fashion did not ask me for any id and progressed to give me full details information on my mother account. the good news is that we found out that there isn't much left to pay on the mortgage, around 24k euros.
now, i know this is a complicated question, but as a gut feeling, if we were to decide to accept the inheritance and had to take a mortage out ourselves would you get a british based mortgage or a italian based one?
is there any first thoughts/advice/warning/pitfalls you can pass on to us?
we are a bit sceptical (well me more) as when our father died he left us with lots of debts, but seems my mother is in a much better situation.
thanks for any advice you can give me.
all the best
Resi

Rossa_3

You have few decisions to make. Get an Italian mortgage in Euros or see if your bank (or your sister's) offers a mortgage on foreign properties? Some of the Italian banks have a presence in London so you don't have to deal with one in Italy. Google Italian Banks in London to see who you can deal with. You will also need an Italian bank account as well as the mortgage account. The bank account would be for you to pay any bills associated with the property such as the utilities etc. so you will need to be able to transfer funds into it from the UK.

If you have enough equity in your house you could get additional lending from your mortgage lender to cover the 24k euros or could look at a secured loan. As we're almost on parity now, that's £24k plus you will have costs including arrangement fees, valuation, legal and VAT. (In Spain you also have to register at the local police station and get the equivalent of a NI number though I don't know whether this is a requirement in Italy)

You will definitely need a solicitor not only to handle the transaction but also make sure you comply with the inheritance laws in Italy and pay any tax that may be due. Don't forget you will be liable to local taxes on the property if you take over ownership.

You will also need to have an Italian Will that complies with Italian law on what happens to the property in the event of your (or your sister's) death. Your UK will if you have one will not cover it as their inheritance laws are different from ours. (I have a UK and Spanish will for my properties) Try the International Property Law Centre at https://www.internationalpropertylaw.com. One of their partners in Hull is Italian and heads up this department for the Max Gold Partnership. They also have an office in London. You're looking for a solicitor, preferably Italian, but based in the UK who can speak English and translate mortgage contracts, wills and other legal docs for you. You will get copies in both languages so that there is no room for error. Also if the solicitor is based in the UK and licenced to practice over here as well you have a course of action you can take if anything goes wrong, as they will be covered by the Law Society.

One of the other questions is what the property is now worth? Before you even consider accepting responsibility for this property you must get a proper valuation. The local agent may help, if you speak Italian, otherwise ask the solicitor if they can recommend anyone. BE VERY CAREFUL as with the collapse of the property markets across the EU you may get caught out unless you think it is worth the risk and over time the property may increase in value.

This also depends on if you like the place and want to use it or even rent it out to get an income. Again if this is a route you want to take you will need a rental agent and an accountant to advise on tax, costs you can offset against tax etc. Hope I haven't put you off. Owning property abroad is fine if you do your homework and get someone who speaks the language and knows their way round the system over there to help you.

Pee

My gut feeling is it is better to have a mortgage in a currency I am earning money in. I would hate to have a mortgage in Euros, but if you have any income in Euros i.e. rent from the property, then maybe that would be right for you.

Do make sure the legal agreement and the Wills are in order - you do need specialist advice on that.

Resi_in_Italy

hi
thanks for the reply. i realised i did not give some important info tho! sorry.
both me and my sister are originally from italy but now residing in uk and therefore both fluent italian speakers (agree maybe not in legal speak tho!)
i am thinking to rent place out (we already have a tenant) until the market turns then sell. hows been valued recently as my mum was planning to sell and move into the city. i realise a couple of months ago and lots has changed in the economy but it is a bit of an indication.
I already have set up an italian basic current account for all the expenditure with the actual funeral.
thanks again for all your advice!
Resi

herbiesjp

Do you own property over here?

If you do you could raise the funds here to clear that debt - that could be one option

Dove in Italia si trova la casa? Just out of curiosity

Resi_in_Italy

hi
i do but my sis does not, so it would be a bit strange if i did raise my half and pay up, but then my sis would be left with continuing paying for her?
i also have savings that could pretty much cover half the amount taking in consideration taxes etc etc.
the house is near Udine, North East Italy, Beautiful city!

...all so confusing....
thanks for the advice
Resi

herbiesjp

LOvely place

Football team isn't bad either!