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Italy vs. France: competing for buyers
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Italy vs. France: competing for buyers

Italy and France have equal visa regimes, attractive climates and great shopping but foreign investment interest is highlighting differences between these two neighbouring states. According to Tranio’s findings, buyers with the same budget and property criteria are twice as likely to search for real estate in Italy as in France. Closer inspection reveals that although property is cheaper in Italy, living costs are similar and living standards are better in France.

Italy France
Good climate

Summer & winter sports

Shopping, entertainment and nightlife

Positive attitude towards foreigners
Cheaper property

Lower maintenance costs

Less taxes

Higher rental yields

Excellent cultural heritage
Lower transaction costs

Better mortgage terms

High taxes

Superior healthcare

Excellent transport links

Cheaper houses vs. better mortgages

Price matters, and Italy outranks France in most areas of property acquisition and taxes, starting with the price per square metre. At an average of €5,930/sq. m in Italy versus €13,639/sq. m in France according Global Property Guide, foreign buyers are looking at the less expensive option when it comes to investing in their second home. At the same time, agency commission fees are split between the buyer and seller in Italy while in France buyers pay the whole sum.

Italy France
Registration fee 3–7
Land registry tax 1 (or €129.11) 0.6
Notarial fee
(incl. VAT
and registration fee)
1–2.5 2–7
Legal fees 1–2
(+VAT at 22%)
Real estate
agency commission
2–4
(+VAT at 22%)
4.5–8.0
Total 7–14 7.1–15.6

Nevertheless, there are some benefits to buying in the République française. Mortgages in France rank as the most secure in the world and French banks grant home loans on better terms and with lower rates than in Italy. It also costs a bit less to close the real estate transaction in France.

Italy France
Fixed rates, % 2.85–5.50 2.60–3.50
Maximum loan amount, % 60 60
Mortgage term, years 3–15 5–25
Minimum loan amount,
€ thousands
150 80
Maximum age, years 75 75

Comparable maintenance costs

Overall costs for property maintenance including utilities, taxes and insurance are competitive with the exception of outsourced property management services which are expensive in France. Utilities (electricity, water and waste removal) for an 80–100 sq. m flat cost €142 per month on average in France and €159/month in Italy according to Numbeo.

You can find more information on buying and registering property in France and property for sale in Italy on our website.

Italy France
Utilities
(water, gas,
electricity,
waste removal)
1,800 1,400
Property taxes 0 300 1,300
Insurance 0 300 0 180
Total 2,400 2,880

Living standards and lifestyle

When it comes to lifestyle and cultural heritage, each state has its own unique attractions including world-renowned cuisine, architecture and historic sites, as well as accommodating climates for both summer getaways and winter holidays.

Nonetheless, according the Travel & Tourism Competitiveness Index 2015 (TTCI) by the World Economic Forum, France occupies the 2nd spot worldwide, while Italy comes in 8th position. This index is a reference in terms of overall quality of tourism and takes into account criteria such transport and tourist infrastructure, the number of cultural heritage sites, environmental sustainability, safety and healthcare.

This is also confirmed by Numbeo’s Quality of Living Index which puts Italy far behind in terms of living standards. According to this data, France outpaces Italy in every area: cost of living and purchasing power, affordability of housing, pollution, safety, healthcare and ease of traffic.

Lower tax bands may be one of the underlying factors in Italy’s inferior ranking. While cheaper taxes are initially attractive, they have a long term effect on the quality of life a buyer can expect from their overseas destination by holding back development and large-scale projects that improve infrastructure like roads, hospitals, telecommunications and green energy. For instance, France ranks 4th in the world for road quality, 6th for railway infrastructure and 17th for quality of air transport while Italy is once again left in the dust: 57th for roads, 28th for railways and 70th in aviation; according to World Economic Forum data.

“Data for living standards in Italy is biased by weak development in the South. The northern regions have good infrastructure and benefit from the proximity with Switzerland, Austria and France. For example, even though France ranks 6th globally for health care and hygiene and Italy is only 29th according the World Health Organization, there are still plenty of quality medical services in the North! So prospective buyers really shouldn’t worry as long as they do their research before purchasing their property.”

In any case, there are plenty of opportunities to unwind and reboot in both countries. France is a global thalassotherapy leader with 1,200 mineral springs (20% of the total springs in Europe) and over 100 spas receiving 550,000 people a year. Italy also has many thermal baths, springs and luxury thalassotherapy resorts to choose from along the coast, in the Alps and in Sardinia.

Conclusion

There is an undeniable link between quality of life and real estate prices. Italy’s prices are more attractive both per square metre and in terms of basic maintenance costs while property in France is more expensive and incurs higher taxes.

However, choosing between these two countries is surely a question of both taste and purpose. Italy gives visitors a true Mediterranean experience for reasonable prices. The climate is warmer, it has excellent summer and winter entertainment options, exceptional cultural attractions and landscape, not to mention the great food wine. The quality of living may be slightly inferior but security and healthcare still meet European standards and if anything, its little quirks only contribute to the rustic feel of the country.

However, for those buyers seeking permanent residences or relocating for work, France might be the right option because it has both great living standards and leisure options. Higher taxes are but a small price to pay for better healthcare, shorter commutes, cheaper utilities, better services and less pollution.

Yulia Kozhevnikova, Tranio

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