One Euro homes in Italy? Not quite, say experts, with second home purchases in Europe for Indians easier elsewhere

A Tuscan villa is largely out of the reach of Indians, say property experts

Almost no Indian Instagram user has escaped the click-bait reels advertising the too-good-to-be-true offer of a home "worth one euro" in Italy, albeit dilapidated and in economically backward areas with poor connectivity. That often sends users down a rabbit hole of purchase options, or even a ticket and visa to Italy to experience the dream of a Roman apartment or a Tuscan villa themselves.

Property experts, however, have tamped down on those dreams. For starters, individual Indians are not allowed to purchase property directly in Italy, due to the lack of reciprocity agreements between the two countries, according to a report by Italian Real Estate Lawyers, a legal firm facilitating property purchases in the country.

The Italian property mirage

The only way Indians - or people from other nationalities not part of the European Union - can purchase a property in Italy is by forming a Società a Responsabilità Limitata or S.r.l (equivalent to a limited liability company) with a share capital of €10,000, where the company owns the property for its shareholders. While S.r.l's can be formed with lower share capital, they would find it difficult to access a mortgage.

Forming a S.r.l, however, comes with a different state of challenges, related to Italy's infamously unwieldy and complex bureaucratic state. A property transaction can involve multiple government bodies and a significant amount of paperwork. Added to this is the language barrier, with almost all government business and paperwork being done in Italian, reflective of Italy being considerably behind its European peers in terms of English proficiency.

For a foreign buyer, this can lead to weeks or even months of delays. Documents like the Certificato di Destinazione Urbanistica (Zoning Certificate) and proper registration in the Catasto (Land Registry) are crucial, and any discrepancies can stall the process indefinitely.

Besides, purchasing many of these "one-euro properties" is usually conditional on a commitment to a costly and time-consuming renovation, and applicants often need to be an EU citizen or hold a long-term Italian residence permit, experts added. This makes them a non-starter for most Indian buyers.

Opportunities easier elsewhere, say experts

Despite capital movements from India moderating in the face of geopolitical challenges and unfavourable exchange rates, remittances to buy property abroad has continued to increase, data shows. According to the Reserve Bank of India, Indians sent $320 million overseas in FY25 to buy immovable property, a 33 percent increase compared to the year prior.

Beyond Italy, other European destinations, including traditional property hotspots such as France and the UK, offer an easier and less-time consuming process to buy a property. In both of these jurisdictions, overseas property buyers have largely the same rights as those of citizens of the respective countries, according to property consultants and buyers of properties in those countries.

In France, any prospective buyers can go for a property purchase, which takes around two to four months, if they are employed in a permanent French job, or have substantial savings and sources of capital. Couples are not allowed to take up any debt that is more than 35 percent of their monthly income in France.

A number of brokers assist in selecting a property, choosing an ideal mortgage, taking care of bureaucratic formalities, and taking out insurance policies needed on the property, according to an Indian property buyer in France. Brokers generally charge a fixed fee (ranging from €1,500 to €2,000), while the notary fee in France, equivalent to stamp duty in India, is around 2-3 percent on a new property.

With Russians and other nationalities retreating from the property market in the UK, Indians are once again seeking new property investment opportunities. Multiple brokerages in London have made recent pitches to India-based clients, with them now looking beyond UK-based Indians. Benham & Reeves, a UK-based brokerage with offices in Mumbai and Delhi, noted that Indians tend to invest around Rs 3 crore to Rs 4.7 crore for a property purchase in the UK.

In a recent interaction with Moneycontrol, Tom Jewell, a former English cricketer and founder of Source Investments, said that 54 percent of the company's client base are UK residents originally from India. The firm, which helps high net-worth individuals manage their wealth and buy property, was in India to pitch the Halo development, located beside the Oval cricket ground in south London, and inside the famous Oval Gasworks site.

Jewell, as well as Chris Tremlett, a former England international cricketer now part of Source Investments, added that it aimed to build on its UK clientele, which is why the firm is pitching properties such as the Halo to India-resident customers directly. The duo added that it is banking on investment opportunities by high-net-worth Indians looking to build up wealth for their next generations, as well as management-level figures in firms such as the Big Four management consultants.

Among the EU countries and the eurozone, property and migration consultants also cited Portugal as a viable market, due to lower entry barriers and a maturing property market.

“Among EU nations, Portugal has emerged as the top choice. Its Golden Visa program, with relatively low minimum investment thresholds, starting from €280,000 in some cases, flexible residency requirements of just seven days of stay per year, and with recent changes of new guideline one can obtain citizenship within ten years. The programme is highly attractive. The real estate market in Lisbon and Porto, while maturing, continues to hold long-term investment appeal,” said Andri Boiko, founder and CEO of Garant.in, a migration consultancy firm.

Eastern European opportunities

According to immigration and property experts, some markets in eastern Europe, which has much lower property prices than in western and northern Europe, are becoming of interest to Indians, with the number of enquiries, although on the lower end, continuing to increase.

Hungary is becoming an attractive proposition for prospective real estate purchasers in India, according to an immigration expert, with the country launching a real estate-linked golden visa programme in 2024. The minimum investment amount is 250,000 euros.

The country's location, being part of the Schengen zone and also sharing a border with leisure destinations such as Croatia and Austria, is of interest to investors, as well as its relative economic strength.

The two newest entrants to the Schengen zone- Bulgaria and Romania- may become an avenue for real estate investments in the future, property consultants said, due to its significantly lower price points compared to western Europe.

Bulgaria also runs a golden visa programme. The visa can be obtained by investing at least 512,000 euros in a government-backed fund, which can invest in real estate, as well as other avenues. Investors may also apply for citizenship after they maintain the investment for five years, according to government regulations.