Magic Towns Italy

Discover Jaid Newstead's inspiring journey from Toronto to Bari, Italy, as she navigates challenges and embraces new beginnings in this engaging interview.

Luca: Happy Saturday everyone, and welcome back to Magic Towns Italy. I’m Luca here with Anna. Good morning, Anna. Anna: Hi everyone. Hi Luca. Luca: This week we are talking about a question we get often, which is why are so many wonderful, gorgeous looking Italian villages and castles abandoned, or for sale for what looks like pocket change? I, myself have renovated several properties and I’m always looking for properties. It’s, uh, as people know, it’s a bit of an addiction for everyone that has it. The area around Venice alone is home to more than 5,000 historical villas. Hundreds of these are in disrepair and sell or sometimes are auctioned for prices as low as 100 or 200,000 euro. And when foreigners see this, they think, oh, Italy’s property market must be broken. How can it be [00:01:00] so cheap? Anna: Yeah, exactly. I mean, it sounds too good to be true and usually it is. So today we want to correct that view. The low price is often an illusion and it’s caused by real costs like taxes, you know, renovation works. So people and especially foreigners are often unaware of. Luca: That’s right. These properties are not cheap because Italians don’t think the castles or villas aren’t beautiful. They’re cheap because the system makes them very costly to buy and restore. And in the next minutes, we’re going to talk about, uh, Italy’s tax code, the property register system, and the heritage laws that structurally punish historical buildings. In other words, which part of the bureaucracy makes it so hard to use and maintain these villas? Anna: Yeah. By the end of this episode, you will understand the reason why these villas and castles languish unsold so we’ll break down the tax traps, the luxury [00:02:00] labels, the heritage protections. So all the unsexy realities. Luca: Unsexy realities. Let’s start with tax. Anna: Yeah. Luca: 30 second primer on the cadastral category. Please don’t tune out. This is important and most people don’t know what it is. In Italy, there is something called the cadastral category, and it is a code that, indicates what kind of property each property is. Castles, villas are in three of the A categories, A1, A8, or A9. It basically means that, anything that has that label given by the tax man is deemed to be a luxury property from fancy apartments to villas to castles or palazzi. Anna: But luxury sounds like a good thing. Like why do you say it’s a problem? Luca: Because in Italy, luxury is basically a tax warning label. Anna: A warning label, Luca: yes. There’s a whole set of tax benefits that disappear and more taxes kick in. Anna: Even [00:03:00] if the place is falling apart. Luca: Yeah, it doesn’t matter. There can be mushrooms growing through the floorboards, but if the property is tagged as A8 or A9, the tax system treats it like it’s a billionaire’s villa. Anna: What actually changes? Luca: The first thing is that you don’t get any first home tax breaks. Normally when you buy a property, you pay 2% purchase tax if you’re gonna go and live in it. In this case, you’re gonna pay 9% whether you live in it or not. Anna: That’s a big difference. Luca: Huge. Luxury homes are excluded from the benefit. So for the same house price, you could be looking at paying 70,000 euro tax instead of 15,000. Anna: Ah, okay.

Luca: I’m excited about yet another episode of the Magic Towns Italy podcast. Are you excited, Anna? Anna: Yeah, I’m super excited also because we are talking about a really interesting topic, right? Luca: We always do. What’s this topic? Anna: So we were gonna keep talking about the most search towns in 2026, but we are pushing that to next week because that’s some really, really important tax news if you’re thinking about buying or fixing up a home in Italy. Luca: That is right. We are going to talk about Italy’s home renovation tax breaks for 2026. 2026 is actually a bit of a special year. We’ve even called it the last really good year to renovate with meaningful tax breaks. We’re going to talk about what incentives that are there now, especially compared to the crazy, [00:01:00] Superbonus 110% from a few years before. Anna: Oh yeah, that bonus, the government basically paid you more than what you spent. Crazy, right? Luca: Yes. I would say that Superbonus, born in 2020 let homeowners claim 110% of the renovation costs as a tax credit and in practice that meant that you could renovate your house and make a 10% profit in tax credits. It was the government paying for your renovation effectively. Anna: Yeah. Suddenly everyone was changing windows. Installing solar panels. But that, that couldn’t last forever, right? Luca: Yeah. The bill was astronomical. The super bonus blew a hole in Italy ‘s finances. The economy minister said that these incentives had a devastating impact on public Between one and the other these bonuses have cost 219 billion [00:02:00] euro. Anna: Oh my God, that’s insane. Like Italy basically threw hundreds of billions at home makeovers. Luca: The initial plan was for the scheme to cost maybe 35 billion Euro that is short up to a hundred around the 160 billion euro in just four years. And the worst thing is that because the government was effectively paying for people to renovate their home, the construction costs also went up by a lot. Uh, people weren’t even negotiating prices. I mean, uh, and why would they care if the state was paying for it? And did lead to some abuse. Anna: Yeah, I heard about the scams. People were definitely taking advantage. Luca: Yeah, taking advantage of the system. Um, so far, about 12 billion in fraudulent claims had been found out. Prime Minister Meloni called it the biggest scandal that the state has ever suffered. So there has been a lot of backlash on this tax scheme. And we could do an entire podcast about what went wrong with 110% super bonus.[00:03:00] So it shouldn’t be surprising that these incentives have been dialed back. Anna: So the Superbonus is basically done now, right? Luca: As of right now, January, 2026, the Superbonus, 105% is completely scrapped , for any of our listeners, this scheme is effectively over. Anna: Oh, okay. So no more free renovation for us. I mean, it was good while it lasted, but um, what about now? Like, if 2026 is the last good year, what can we actually get this year? Luca: That’s a good question. The government has not completely abandoned helping renovators, and in fact, uh, three of the key programs, the Bonus Casa, which is the oldest of them, has existed for maybe 20 years, the Ecobonus and Sismabonus have all been extended, but at lower rates and with simpler rules. Anna: Wait, but what’s the difference between them? Luca: So in a [00:04:00] nutshell, Bonus Casa is the gen...

Luca: How are you, Anna? Anna: I’m good. What about you? Luca: I am doing great. It’s really good to see you for the last episode before Christmas. We’re gonna take a couple of weeks of well-deserved break. Anna: And today we’re diving into one of the most interesting topics for remote workers and expats, which is Italy’s new digital nomad visa. Luca: Yes. I’m so excited about that. And I know you’re excited about it too because you’ve been covering it assiduously for a couple of months now, haven’t you? Anna: And I’m sure lots of people are interested as well. Luca: The Digital Nomads Visa has been in the works for a while, and finally it’s live. The Italian government started talking about a couple of years ago, but as it happens in Italy, it only took off in, uh, May or June. Can we talk a little bit about what it really takes to get [00:01:00] it? Anna: The good thing is that it’s absolutely doable. Let’s break down what the visa is, uh, who it’s for and what the real world requirements look like. Luca: The digital nomad visa, like other digital nomad visas in Europe, like the Portuguese one is probably the best known one, is aimed at non- European citizens who work remotely as the, as freelancers or the business owners or the employees of foreign companies. It is valid for one year. It is renewable and it lets you live legally in Italy while earning more money from companies and customers based abroad. Anna: Exactly. So, there are two broad tracks. The remote worker visa, if you are employed by a company, and then digital nomad visa, if you are employed or if you’re self-employed or freelance. The paperwork changes slightly depending on which route you’re taking, but the general [00:02:00] principles, let’s say, are the same. Luca: Talking about what you need to qualify for the DNV, as we call it, income, you need to show earnings of at least 28,000 euro per year, which is the legal minimum. Anna: But realistically, successful applicants tend to earn quite a bit more so based on real cases. Most approval came in the 43,000, 80,000 range. Luca: And income alone is not enough for you to get the visa. You need to prove that you have financial stability historically. With things like tax returns, bank statements, client contracts. Anna: And a pro tip is to create an explanatory note in Italian. So this is like a financial cover letter. Luca: Now, paperwork wise, as we said, you need two to five years of tax returns. Six to 12 months worth of bank statements, a lease or registered housing [00:03:00] contract. And we’re gonna get back on that point because it’s a bit of a sticky point in a second. A private health insurance policy, a degree or proof of professional experience for the sector you’re applying in. And, don’t be discouraged sworn translations in Italian for a lot of these documents. Anna: So you need to prove you’ve got a place lined up before you even apply. So, 12 month lease registered with the Agenzia delle Entrate is the safest bet. Luca: You are an expert in this topic. You also wrote an article this week, Anna, about, how tricky it is to get these 12 month leases so listeners can go to Magic Towns directly and read it. It is, very, very interesting. It is true that the, for this particular type of visa some consulates accept Airbnb medium term rentals. So when in doubt go for a 12 month registered [00:04:00] lease. Anna: And people often ask like, how much is this going to cost me? So let’s be hone...

Luca: Hello Anna, welcome back. Welcome back everyone to the Magic Towns Italy podcast. Anna: Hi everyone. Happy to be here again. Luca: Anna, it’s a pleasure to have you here again after our little Thanksgiving break. What did you do last week for Thanksgiving? Anna: Yeah, actually nothing special. What about you? Luca: I ate some chicken, not turkey really, but that’s a Okay. Yeah. But let’s not talk about this. I wouldn’t want to upset the vegans who are listening to the show. So today we are having a chat about a topic that is very important to a lot of our listeners, the new work visa for Italian descendants. Anna: Yeah, we finally got some good news for people with Italian roots. This is something the Italian diaspora has been waiting for forever. Luca: Italy has a enormous diaspora. Countries like Argentina and Brazil have tens of millions of people with [00:01:00] Italian heritage. In the US there’s about 20 million Italian Americans. These communities we know because most of our audience is Italian American, actually. Have a strong interest in reconnecting with Italy. And one of the main interests for many has been to obtain Italian citizenship through the ancestry, but in May things got much harder. Anna: Yeah, exactly. Back in May, 2025, Italy changed its citizenship law and putting this strict two generational limit for reclaiming citizenship by descent. So now only people with Italian parent or grandparent can automatically get recognized as Italian citizens through blood. Um, before that, there was no limit at all. So you could go back to great grandparents, or even farther you could prove the family line never broke. Luca: I helped a lady get her citizenship, as early as two years [00:02:00] ago through her great, uh, great, great grandfather who was born in the Grand Duchy of Tuscany. So that’s even before Italy even existed. And the reform from May caused a bit of a stir. Uh, we ourselves at Magic Towns ran a petition and over 600 people, um, who were cut out by the reform. Mostly Italian Americans committed to a minimum two year residency period. In order to get Italian citizenship, but the government did not listen. A lot of Italian descendants lost their straightforward route to Italian citizenship. Anna: Yeah, it really upset a lot of people and for a good reason. Literally overnight, thousands of people were in the middle of applying or planning to apply, just had the doors slammed in their face. It was pretty brutal for the diaspora communities. Luca: Someone wrote to us, they had already put down a hundred [00:03:00] thousand euro on renovating a property thinking that we’ll get citizenship and then suddenly, woo, they were cut out and they didn’t have a legal way to move through it. Anyway. That’s crazy. Talking about, yeah. Yeah. It is crazy. They’re talking about positive news. There is this new law we’re talking about. Mm-hmm. And the good news is there’s a new quota free work visa for descendants of Italian citizens from certain countries. Yeah. Can you tell us a little bit what happened, Anna? Anna: Basically on November 24, the Italian government put out this decree that creates a special work permit for people who are descendants of Italian citizens. And these permits don’t count against their normal immigration quotas. Usually Italy caps how many work visa they give you each year the decreto flussi, which is the early immigration quota. Those fill up super, super fast. And so, this new rule says that if you’ve got Italian ancestry and you’re from one of the [00:04:00] listed country, you can get a work visa Luca:

Explore the rising cost of coffee in Italy as Luca and Anna discuss breakfast habits, coffee culture, and the economics behind your morning espresso.

[00:00:08] Luca: Hello everyone. Welcome to the Magic Towns Italy podcast. I am Luca joined by Anna, my co-host. [00:00:16] Anna: Hi everyone. [00:00:17] Luca: We have a new format for the podcast because, well, we thought we’ll make it special. [00:00:23] We have something exciting to discuss. We have launched our ultimate guide to buying and owning property in Italy. And since we spent three months working on it we thought the two of us would get in front of the mic and talk to you. [00:00:39] Anna: So we are covering stuff like, uh, why Italian notaries are actually super helpful. How buying at auction isn’t as scary as you think. Some smart ways to budget for renovations and a bunch more cool stuff. [00:00:54] Luca: That’s right. Some of the, you might say, most interesting things or funniest things sometimes from, uh, about a hundred pages of guide. And by the end of this, you have an idea, a little taste of what’s inside the property guide. And just for, uh, your information, the guide is, uh, free for all Magic Towns subscribers. [00:01:17] And, uh, anyone who is not a subscriber is welcome to come to Magic Towns Italy and, uh, take a sub subscription or buy the guide if you prefer. So shall we get started, Anna? [00:01:28] Anna: Yeah. So first thing we gotta talk about someone you will definitely meet when buying Italian property, but most people don’t get what they do. [00:01:38] Luca: When I came back to Italy, I was, uh, a little bit meh about notaries thinking, okay, here’s another archaic relic of Italy bureaucratic past. [00:01:50] And getting into an office where everyone’s wearing a suit and mahogany furniture, little bit formal. I thought, okay, that’s so outdated. But actually I changed my mind. I think that Italy’s notary system is one of the best consumer protections in the property world. [00:02:10] Surprising, right? [00:02:12] Anna: A lot of foreigners think the notary is just another annoying paperwork person, but they’re actually on your side. Like these people are seriously trained, legal expert, or basically act like gatekeepers [00:02:25] Luca: That’s right. One of the things that, one of the myths that we bust in the guide is this, uh, idea that you could accidentally buy a house, uh, with the bad title or serious issues on the land registry. It’s called the cadastre in Italy. And I think that drives me crazy. Um. When I see these, uh, lawyers on expat forums say, oh, we saved this poor expat from buying a property from a person that did not legally own it. That’s never going to happen. A notary will never let it happen. Before you are allowed to purchase the property, they are going to triple check who owns it, how they got the property. [00:03:11] So since you have to pay them anyway, you have to pay one to 2% of the purchase price. And then like an attorney, they don’t nickel and dime you for asking questions and that the, you’ll say a flat fee. Ask them anything and get your money’s worth from the notary. [00:03:26] Anna: Basically they make sure everyone sticks to the deal. So for example, if your seller promised to fix something or hand over paperwork before closing, the notary won’t finish the sale until it’s done. They make sure nobody can just bail on what they agree to. That’s right. In Italy if a seller backs out for no good reason, they have to give you back, double your deposit as a penalty, like double, and that’s the actual law. [00:03:55] So [00:03:56] Luca: Yeah, it’s sometimes it’s worth paying a little bit more in deposit knowing that, uh, the bigger the deposit or the stronger the incentive for the seller to agree to what they have at contract. So I would say that the, the notary flips the script a little bit. Instead of buyer beware, it...