Frequently Asked Questions

There are 2 types of ownership of the property in Europe: Freehold and Leasehold. Freehold or Outright - timeless ownership (you'll own the property forever).Leasehold - fixed length of time ownership (you'll own the property for a fixed, extendable length of time - usually for 12-120 years, in some countries, like United Kingdom, even up to 999 years, when Leasehold being called 'Virtual Freehold').Not 'leasing'! In some countries, like USA and Canada, the term 'Leasehold' ownership is often mistaken for 'Leasing' (which simply means 'rental'). These are two totally different things. Not 'Timeshare'! Leasehold is also sometimes compared to Timeshare or Fractional ownership, which is also a totally different thing. Timeshare owners can't do anything to the property, such as change furniture or paint walls etc, and can use it only for fixed periods each year (usually 1-4 weeks out of the year). They basically don't own the property, they only own the right to be there during weeks they have bought rights for.In Europe, 'Leasehold' means ownership of a property for a fixed and extendable length of time (12-999 years). You can live in the property 365 day a year, own pets, change furniture, do house refurbishments (change kitchen, re-tile bathroom, paint walls etc.), rent it out, extend the Leasehold contract or sell remainder of it before or after extension. Basically, it's 100% your property for the next 12-999 years (in Italy the longest residential leasehold contract is 30 years, extendable for next 30 years and so forth).​Freehold and Leasehold types of ownership have pros and cons. Please find a comparison below.​1. Purchase priceThe purchase price of a freehold property tends to be more expensive. As a current example, a 2-bed apartment with a leasehold listing price of 12,000 EUR is available for freehold purchase at 78,000 EUR. Even after some possible negotiation, the freehold purchase demands over 6 times higher upfront cost. Leasehold properties, therefore, open opportunities for people to own a holiday flat, rental property or residence in Italy much sooner with less capital. For buyers with a slightly higher budget, it may mean being able to afford a larger property than if they were buying a freehold. 2. Purchasing feesA leasehold purchase price includes all purchasing fees (agency commissions), there are no additional costs there. In the example above, a freehold purchase would incur an additional 15% in signing fees, on top of the negotiated purchase price. Leasehold purchase fees are only 1,500 EUR and most of the time included in price as paid by the seller.3. Ongoing costsFreehold owners are obliged to pay contributions to the building's maintenance every 5-6 years. This covers the repair and redecoration of the building's masonry, structure, and wear and tear of internal and external communal areas. The bill per apartment ranges between 3,500-6,000 EUR and can sometimes be higher if the residents vote to have an elevator installed or if larger works are required e.g. tree root damage to building, car park layout or roof repairs. As a leaseholder, you do not pay this charge, your freeholder does. The only charges you pay are ground rent and services charge (about 1,100-1950 EUR per year, depending on the size of property). The service charge and ground rent are fixed for the whole duration of your lease, so they cannot go up. Also, lots of property owners choose to rent out their property in the peak of summer season to generate enough income to cover the cost of the service charge and ground rent, usually renting out only in August and July covers most of year's charges.  Those who do not want to find tenants themselves, that rent theirs properties with our help to local agents and receive agreed sum for the month they choose. Most people do not rent their property at all as maintenance (including all bills) of the largest Leasehold apartment rarely goes above of 300 EUR per month - almost anyone can afford it.Ongoing utility bills (tax, water, sewage, rubbish, condominium) are equal for freeholders and leaseholders. The only difference is that the freeholder pays bills as they come and leaseholder pays upfront (except electricity and gas). Leaseholder's way is more convenient as some bills must be paid in person at local Post Office during special months (such as Tax) and you have to be in Italy at that time, or have someone to do it for a fee. There is no such a problem for Leaseholder as most bills are paid upfront through your freeholder.4. Length of ownershipA freehold property is a forever property. You will own it for your entire lifetime, unless you choose to sell it and it can be inherited by your family, subject to inheritance tax.​A leasehold property is owned by you for a fixed number of years with the same rights of use and resale as a freehold. You will have a legal contract with the freeholder's company called a 'leasehold agreement' - this is proof of your leasehold ownership. At the expiry of the contract, you can choose to give it back to the freeholder or extend your ownership for the next up to 30 years at a fee that's usually half of the original leasehold purchase price. Your right for extension is written into the leasehold contract. Leasehold property can also be inherited and there is no inheritance tax for it in Italy.5. Resale of your propertyYou can choose to sell your freehold or leasehold property at any time. When selling a leasehold, you sign a 'forfeiting lease agreement' and your buyer signs 'taking over lease agreement' or new 'leasehold agreement' with freeholder - we organise that. The buyer will have the leasehold for the number of years remaining in your leasehold. The new owner will have the right to extend the leasehold when it expires at the same reduced cost that you would have had. ​Agency fees for resale of a leasehold are 1,500 EUR, much smaller than that of a freehold sale, which are between 3-6% of the sales price (depending on your agreement with the agent).​In addition to this, to sell a freehold, a vendor must obtain an "APE certificate" for their property, which costs 150-450 EUR. There is also a significant difference in capitals gains tax. Selling your freehold property within 5 years of purchase requires you to pay a 20% capital gains tax in Italy as well as often the capital gains tax in your country of residence. A leasehold sale does not incur capital gains tax in Italy.​​6. Renting out your property: Your can rent out your property to friends and family. Rentals to holidaymaker are permitted by all Leasehold agreements, but must comply with local laws which is your responsibility. In Scalea and surrounding towns the usual rent for 1-2 bedroom apartment is about 1,500-2,500 EUR per month of August. Other months' rent varies. If you plan to use finding clients via AirBnB or similar websites, it may involve following too many rules (such as: no keyboxes allowed; obligation to register all holidaymakers in Local Authority; pay City Tax etc.), which are constantly becoming more and more complicated in Italy. Also it may require applications for necessary licenses etc. to obtain which some specific certificates are required, and not all freeholders will provide them due to high costs. If you wish to buy property purely for AirBnB rentals, we advise you to buy Freehold property. If you have further questions about the difference in two types of purchases please contact us.If you have decided that Leasehold property suits you, please see our separate site.If you have decided that Freehold property suits you, please visit our listings.