Buying a property in Florence: a complete guide

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Yes, the analysis of Florence's property market is included in our pack

Wondering about investing in real estate in Florence? You're not alone!

Many people are enchanted by Florence's Renaissance heritage and dream of owning an elegant apartment or a historic palazzo there.

Is it financially viable, though? Are property prices increasing in Florence? What is the current trend? Should I invest in the city center or Oltrarno? Are there any secret taxes? Where are the best yields?

We've solved it for you.

The Investropa team has really dug into this market. Actually, we've organized all our findings in a pack. Get it now.

In this article, get ready to receive valuable insights from us.

How is the property market in Florence?

Is the property market doing fine or not? A data-driven analysis will give us the answer.

Property types

In Florence, you can find a variety of properties for sale to suit different needs and preferences.

These properties include charming apartments nestled within historic buildings, providing a taste of the city's rich cultural heritage. There are also modern condominiums with convenient amenities for a contemporary lifestyle.

If you prefer a more serene environment, you might explore beautiful villas with lush gardens in the outskirts of the city.

Additionally, Florence offers rustic farmhouses for those seeking a tranquil countryside retreat.

Whether you're interested in historical charm, modern comfort, or peaceful countryside living, Florence has a diverse range of properties available for sale.

Buy or rent?

(If you're keeping it for yourself and not renting it)

If Florence is your city of choice, you may be pondering the buy vs. rent decision in this historical and artistic gem of Italy.

Usually, buying is better than renting in Florence due to the low cost of ownership and the potential for appreciation in the city's real estate market.

Nevertheless, if flexibility is your main concern, renting is the recommended choice.

Property prices in Florence

On average, according to the last data from National Institute of Statistics (ISTAT), purchasing a property in Florence would cost you around $5,200 per square meter.

There are significant differences, clearly. An apartment in the historic center of Florence might have a different price per square meter than a villa in Fiesole. You'll get a more detailed in our pack for buying property in Florence and in Italy.

To put things in perspective, it means that, instead of buying an apartment in Paris or London, you can afford 3 properties in Florence.

Also, housing prices in Florence are 39% cheaper than inhttps://investropa.com/blogs/news/florence-propertyLucca.

The most expensive neighbourhoods in Florence are probably those located in the historical city centre, while the cheapest areas are located further away from the city centre.

Trends

First, let's acknowledge that Italy remains a very stable country. The last Fragile State Index that has been reported for this place is 43.4.

Keep this in mind when thinking about the possibility of buying a property in Florence.

Also, according to the International Monetary Fund, Italy's economy is expected to soar by 4.8% in the coming 5 years, resulting in an average GDP growth rate of 1% (it's not much).

If you want to invest in real estate in Florence it's a good thing because, usually, when the economy grows, people make more money, and this encourages them to invest in real estate, which drives up the demand and prices for properties.

Also, in Italy, the average GDP per capita has changed by 4.1% over the last 5 years. The growth, although minimal, is still present.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Italy right now.

Buying property in Florence

It can be difficult to buy property in Florence due to the lack of reliable and up-to-date information about the local real estate market. That's why we have created the pack to buy property in Florence and in Italy.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Florence:

1. Research the Florence property market and determine your budget.
2. Appoint a local real estate agent with expertise in Florence's property market.
3. Visit potential properties to evaluate suitability and compliance with local regulations.
4. Draft a formal purchase offer and negotiate with the seller.
5. Execute a preliminary contract (Compromesso) which includes the property details, price, and terms.
6. Pay a deposit (Caparra) usually 10-20% of the property value upon signing the Compromesso.
7. Conduct due diligence, including verifying property ownership, title, and any encumbrances.
8. Secure financing or transfer the necessary funds to an Italian bank account.
9. Engage a notary to prepare the final contract (Atto di Vendita) which includes all details and obligations.
10. Sign the Atto di Vendita in the presence of the notary and pay the remaining balance and taxes (IVA).
11. The notary will then register the property with the local land registry office (Conservatoria dei Registri Immobiliari).
12. Obtain the final property deed and registration documents as evidence of your ownership.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Italy.

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Where to find a property

Explore these websites to find properties in Florence:

• Immobiliare - Italy's leading real estate portal, offering an innovative platform for property listings and searches.
• Green-Acres - Europe's foremost platform for second homes, with a wide range of properties for sale in Italy and other countries.
• Immobiliare Italiano - Offering a diverse range of Italian real estate and luxury properties for sale, tailored to various preferences and budgets.
• Houses of Italy - A licensed real estate agency providing a variety of properties for sale across different regions of Italy.
• Italian Houses for Sale - A property website showcasing an extensive selection of properties for sale in various Italian regions, connecting clients with professional agents.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Italy.

What you can get

As mentioned before, the average price per sqm in Florence is $5,200. A 1-bedroom property with an area of 60 square meters would cost approximately $312,000, and a 2-bedroom property with an area of 85 square meters would cost approximately $442,000.

However, prices will differ based on the attributes of the property and its specific location.

High-end property locations in Florence tend to be more expensive. A house in Piazza della Signoria might come to around $980,000, but a house in Oltrarno could be priced at $910,000.

Nevertheless, there are spots that are more accommodating to your wallet. You may find an apartment in Novoli for $170,000, or an apartment in San Jacopino priced only at $140,000.

We give a more detailed breakdown in our full pack for buying property in Italy.

Common mistakes

Here are the main pitfalls when buying a property in Florence, Italy:

• Artistic heritage restrictions: Verify limitations on modifications due to the city's rich historical and cultural significance.
• Seismic risk: Evaluate earthquake vulnerability and potential retrofitting requirements.
• Renovation permits: Navigate bureaucratic processes for obtaining approvals in an ancient city with strict regulations.
• Land registry discrepancies: Check for inconsistencies in property documentation and boundary disputes.
• Tourist zone limitations: Be cautious of restrictions on short-term rentals in certain areas.
• Agricultural land classification: Confirm land use permits for rural properties to avoid farming constraints.
• Cultural property laws: Comply with regulations protecting valuable cultural assets within the property.
• Heritage tax implications: Understand tax incentives or obligations linked to owning historically significant properties.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Italy Property Pack

Living in Florence

Living in Florence is like stepping into a dream, with its stunning Renaissance architecture, rich culture, and vibrant atmosphere.

Cost of living

The cost of living in Florence is generally considered to be quite affordable. Prices for basic necessities such as groceries, utilities, and transportation are all relatively lower than in many other cities in Europe.

Here are some examples to better understand the cost of living in Florence:

• Monthly rent for a charming apartment in the historic Oltrarno neighborhood: €800-€1,500.
• A glass of local Tuscan wine (e.g., Chianti or Brunello di Montalcino) at a traditional enoteca: €4-€8.
• Monthly transportation pass for buses and trams within Florence: €30-€50.
• A plate of traditional Florentine ribollita soup at a local trattoria: €10-€15.
• Admission to the Florence Cathedral (Duomo) and Brunelleschi's Dome: €15-€25.
• Monthly membership at a Florence-based fitness studio or yoga studio: €40-€80.
• Fresh produce from the Sant'Ambrogio Market for a week: €20-€40.
• A bottle of local limoncello liqueur from a liquor store: €10-€20.

Neighbourhoods

We want to show information in an easy-to-understand way. So, we made a summary table that lists the different areas in Florence. For yields, prices and rents, check our property pack.

Life in Florence

The economy of Florence is largely based on tourism, with the city being one of the most visited cities in the world. There are also a number of small and medium-sized businesses, as well as some larger companies in the financial, automotive, and manufacturing industries.

What expats usually like the most in Florence is the incredible food, from the classic Florentine steak to the delicious gelato, and the stunning architecture, such as the Duomo and the Ponte Vecchio.

Regarding safety, the crime rate of Florence is around 39, which is average. Florence has low crime rates due to its strong police presence, high quality of life, and cultural respect for the law.

A good point for a property investor - there is a mass rapid transit system in Florence known as the Tramvia, which consists of two tram lines.

Florence has excellent access to healthcare, with a variety of public and private healthcare options available.

Finally, it is worth noting that the University of Florence ranks among the top 500 universities in the world.

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Renting out in Florence

This part is for you if you want to buy a property with the goal of renting it out and making money from it, rather than living there.

Long-term

Tenant Profiles in Florence

According to the data reported by Wikipedia, the home ownership rate in Italy is 74%, which is average.

It means that, if you decide to buy and rent out in Florence, there will be a good number of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target students, young professionals, and families looking for a more affordable option to living in the city centre. For short-term rentals, you should look to capitalize on the city’s popularity as a tourist destination.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Florence are floating around 2 or 3%. It's low. A good rental yield is typically considered to be around 7% or higher.

The best rental yields in Florence come from properties located in the city centre, near popular attractions and public transport links, as these areas attract the highest demand from tourists. Additionally, properties located in the more affordable outskirts of the city can also offer good rental yields due to their lower purchase prices.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Florence are taxed at 21%, which is not bad.

Short-term

You could also decide to rent short-term to students, business travelers, and vacationers looking to explore the city. Additionally, many tourists come to Florence to view the city's renowned art and architecture, making it an ideal destination for short-term rentals.

If you decide to go with that option, look for properties in the city center, particularly in the Duomo, San Lorenzo, and Santa Croce neighborhoods. These areas are popular with tourists and offer convenient access to the city's many attractions.

Currently, there are approximately 10,000 active Airbnb listings in Florence, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $146, which is quite high.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Florence can make around $2900 per month. Also, the average occupancy rate is estimated at 90%.

Is it worth buying real estate in Florence then?

If you're pondering whether to buy property in Florence, here's the deal:

Buying property in Florence makes sense if you're in it for the long haul. If you've fallen in love with Florence's charm and plan to make it your permanent home, owning a property here can be a rewarding experience. The city offers a relatively affordable cost of living compared to major European capitals, and property prices, on average, are much lower. It's an opportunity to immerse yourself in the city's rich culture, enjoy its stunning architecture, and be part of the local community. Plus, Florence has shown stability in its economy and real estate market, making it a potentially lucrative investment for long-term capital appreciation.

If you're thinking about rental income, both long-term and short-term rentals can be profitable, with the city's popularity ensuring a steady stream of tenants or tourists.

However, buying property in Florence might not be the smartest move if you're looking for a quick buck. The rental yields are relatively low, hovering around 2-3%, which falls short of the typical 7% or higher considered attractive. It's not a place for short-term speculation. Additionally, if flexibility is your priority and you value the ability to move around easily, renting is a better fit. Navigating the bureaucracy of buying property in a foreign country, especially one with stringent regulations and cultural significance like Florence, can be a headache.

Plus, if you're wary of market volatility or concerned about the potential pitfalls of dealing with cultural property laws and bureaucratic red tape, it might not be worth the hassle. In the end, the decision boils down to your long-term goals, lifestyle preferences, and risk tolerance.

Make sure you understand the real estate market in Florence

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.