Holiday let in Italy- any advice?

[Mr.Cambio]

Let me explain so that you understand:

An accountant in the destination place is not required.

An accountant in the residence country is required as he will be (should be?) familiar with (in this instance) the UK tax and inheritance laws. He/she should be either ACCA or ICAEW qualified which means she is a professional and not some clerk who worked in an accountant's office for many years and set up on his/her own doing private client work such as tax returns, but cannot advise or be up-to-date on the plethora of constantly changing Tax Laws in the UK.

A solicitor in the country of residence is required as well as in the destination place - for two entirely different but important reasons.

1. The solicitor in UK advises on Estate Planning in one's lifetime and upon death(working closely with an accountant on the financials) - Inheritance Tax planning, pros and cons of setting up Wills with Trusts and tax implications of Trusts in lifetime as well as on death, considering severing joint tenancy in the UK property into Tenants in Common (perhaps same for the destination property - but seeks advice from destination lawyer or abogado). There may be a consideration to purchase the foreign asset under a company structure to mitigate tax implications in the destination and in the UK.

2. The destination lawyer must be involved (among other things) for land search, ensuring that the seller owns the Title to the land and property, that they don't intend to build an autopista through what is currently the swimming pool or a new airport nearby etc. He also oversees funding and raising the finances wit the UK accountant/lawyer and transfer to the vendor of funds at the correct moment etc. So he too is very important in the destination - but must be chosen independently and NEVER EVER accept the lawyer put forward by the Agent acting on behalf of the vendor.

A note about translation. An independent lawyer will have documents independently translated into contracts where the translations are both valid and reliable. Validity and reliability of translation are different criteria but very important. My daughter is fluent in French, German, Spanish at Degree level in the UK (read/write and speak) and self-taught Italian. She highlighted many inaccuracies in translated documents when she first worked for a languages translation firm. Carefully phrased wording on a contract that has no loopholes in interpretation is the aim of a good translator and to advise on appropriate changes to wording in the local language to remove or avoid interpretation loopholes. The translator must be commissioned to work solely in your interest. Hence even though the agent or solicitor prepares translated contracts and Bill of Sale, your own translator must be used to advise and act solely for you.

Now anyone who does not follow this is likely to end up on TV consumer shows crying how they got ripped off in a surge of an emotional buy - they used their heart not their head and have only themselves to blame. But crying on the shoulder of a Psychiatrist may have some temporary comfort - he is trained to make you feel nice by asking "now how long have you had this urge to purchase a dream property in a foreign land where you know nothing about the laws and don't speak the language?"

And for language, I also include the USA (think Florida as I did in the 1990's boom for Villas near DisneyWorld). I think it was Oscar Wilde who once said of the US and the UK:
"Two great Nations divided by a common language"

And how right he was. My daughter is in the US and theirs is a peculiar language - or should that just be "a very different language?"
"Right"
Wrong
No
Yes?
"Right"?
No, Yes.

correct, in that way you'll be crying at the psychiatrist chair because the lawyer or accountant you chose, charged 20000 pounds, instead of 1000, only because you were lazy and unable to make your own inspection before you proceed.

 

[jemgee]

13 years ago we visited Auxerre and loved the experience and friendliness of locals. We were 5 years off retirement and had watched all the usual tv programmes. We saw a small terraced cottage for sale and were very tempted - small village with bakery, supermarket etc. The cottage overlooked the River Yonne and then we had an afternoon trip on a private steel hulled river cruiser. We were immediately sold on the idea of cruising all the rivers and canals in France plus the option of going through to Holland and Germany. Buying a boat meant you weren't stuck in one location.

We did buy a boat for 61,000 euros and enjoyed many holidays over 7 years but we found that we were going over the same routes because of needing to moor up in the home base where we parked the car. In the meantime the financial crisis hit and property (and boats) dropped in price. Also many rural French villages were dying on their feet as the younger generations moved to the bigger towns and local shops and even supermarkets went out of business in the face of the giants like Leclerc and Carrefour etc not to mention Aldi and Lidl.

The 2 day cost of driving down to Dover, ferry,overnight stop, motorway tolls to get down to Auxerre (650 miles total at 25mpg) was probably £200 each way originally rising to £300 at the end. We decided to sell the boat in 2015. No one was buying boats - it took 18 months, the exchange rate and boat yard commision we ended up with 35,000 euros.

The other risk was flooding and rivers bursting their banks - so any property close to the pictuesque river views was very vulnerable.

 

[cheshiremaserati]

correct, in that way you'll be crying at the psychiatrist chair because the lawyer or accountant you chose, charged 20000 pounds, instead of 1000, only because you were lazy and unable to make your own inspection before you proceed.

I wont be crying at the psychiattist. Simple reason is that for a few hundred pounds I got all the information to decide it was not for me. So I never sunk any money of the magnitude you mention. End of story......

 

[Doctor Houx]

My wife has operated a holiday rental for many years in Provence, and last year we purchased and converted a property to rental apartments in La Chartre Sur Le Loir, near Le Mans. This is opposite the famous Hotel de France that was the Aston Ford and Porsche team base from 50's to 70's. We can fill it during race events at great rates but rest of the year is a challenge.

Many of the comments on here are true. The legal and inheritance laws are complex (i'm a UK corporate lawyer but still use an expert in French law). Getting a reliable local agent to deal with cleaning and maintenance is vital and most French properties have little or no capital appreciation unlike the UK.

However, devote the time and energy to managing it and advertising and take care with who you rent to and provided you set up the right accountng structure and get a good rental yield you can make money post bills and taxes.

It's by no means get rich quick, and we were in the red for years after a hefty capital investment , so it must be treated as a business not a hobby if u want to make money. Good luck!

 

[sionie1]

My wife has operated a holiday rental for many years in Provence, and last year we purchased and converted a property to rental apartments in La Chartre Sur Le Loir, near Le Mans. This is opposite the famous Hotel de France that was the Aston Ford and Porsche team base from 50's to 70's. We can fill it during race events at great rates but rest of the year is a challenge.

Many of the comments on here are true. The legal and inheritance laws are complex (i'm a UK corporate lawyer but still use an expert in French law). Getting a reliable local agent to deal with cleaning and maintenance is vital and most French properties have little or no capital appreciation unlike the UK.

However, devote the time and energy to managing it and advertising and take care with who you rent to and provided you set up the right accountng structure and get a good rental yield you can make money post bills and taxes.

It's by no means get rich quick, and we were in the red for years after a hefty capital investment , so it must be treated as a business not a hobby if u want to make money. Good luck!

Thanks, it’s very much a business idea and not a hobby, nor a get rich quick as I’ve viewed all of the property investments to date as long term. Plenty of food for thought.