The combination of working remotely, relatively lower prices and a range of tax incentives fueled wanderlust living among better-off French, Britons, and Americans in 2021.
Italy Now Top Second-Home Location for North Americans & Britons When Buying Outside Home Countries
Homes in Italian cities and the countryside have always held sway with foreign buyers. The pandemic of 2020-21 supercharged that lure of Italy among better-off Americans and Britons.
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In addition to Italian fashion, art/architecture and food, Italy as a second home destination offers foreign buyers an exquisite place to work remotely, take advantage of tax incentives (no capital gains tax for non-residents if they sell their houses more than five years after they bought it) and relatively lower prices.
Transaction costs for buyers are lower in Italy than in Spain or Portugal though higher than in France, according to a 2021 Knight Frank report. A flat tax regime caps income tax at 100,000 euros/year and attracts wealthy expats looking to invest substantial money in Italy.
The most popular places in Italy have traditionally been the regions of Tuscany and Umbria. Currently, there’s also an uptick in interest in the Lombardy region around Milan and also around Rome. One American retired teacher is confident she’ll be able to find a home in the countryside about 30 minutes from Rome in a budget range of $40,000 to $100,000.
Brittany’s Property Boom Driven by Rising Temperatures
Residents of Paris, much like their peers in New York, London, or San Francisco, are looking beyond the glamorous Provence, Alpes-Cote d’Azur region to the country’s south to more bucolic, affordable Brittany, Normandy and the Loire Valley. Such increased demand has driven up prices in Brittany +13.5% during 2020-21 while prices in the celebrity-ridden south have gained just +6% during this same period, according to Meilleurs Agents.
With increasing temperatures roasting much of France, Brittany/Normandy/Loire region are experiencing more moderate temperatures and clear sunny days. According to Solenne Guezenec, a communications manager with Barnes Nantes-La Baule, “People just really want to breathe.”
More Popular than Ever to Split Time among Second and/or Third Homes
In the Before Times, people had to choose between squeezing into the chaos and energy of the city or live in the midst of beauty and boredom in the country. In the Now Times, people who can afford it do both.
“Hybrid living is the catchphrase of the day,” said Leonard Steinberg, chief evangelist with Compass Inc. “The perception is that if you have a second home, you have to be a billionaire, but what we’ve recognized especially in the last 18 months is that it’s possible to have a small apartment in the city and a small home outside the city.”
The hybrid-work revolution in where and how people live has infused second- and third-home markets. Some owners say that owning two or three homes is a win-win, the best of both/all worlds.
Others say that they basically live out of the trunk of their car. “Every time I leave one house, I leave with a carry-on bag…it’s a bit embarrassing.”
And others say that they want to ensure they get their money’s worth. “There’s the pressure you need to go there. You’ve spent this part of your income or savings on the second home-you want to make sure you use it…”
All this said, Knight Frank’s most recent Global Buyer Survey 2021 indicated that homeowners’ next purchases will be…
- 35% – upgrading family’s primary residence
- 15% – downsizing or retiring
- 13% – new holiday home
- 9% – permanent move to a new country
- The remaining resources to children’s education, personal circumstances, quality of healthcare, business or employment related, and/or tax related.
Thanks to Bloomberg.
