Property value in Italy: how to work it out

In Italy the value of a home is worked out by multiplying its commercial floor area by the price per square metre of similar homes in the same area, then adjusting the result for what sets it apart: the floor, the condition, the light, the energy rating, the extras. It is the same reasoning an Italian valuer follows, with fewer tools. Done properly, it gives you a credible price range, useful for making an offer or for setting an asking price close to the market.

This guide follows the steps in the order they are done, with a full worked example at the end. It is written for anyone buying or selling in Italy, including from abroad, where the way floor areas and prices are quoted can be surprising.

1. The right square metres: commercial floor area

The first mistake is starting from the wrong square metres. Italian listings and valuations use the superficie commerciale, the commercial floor area, which is larger than what you would measure with a tape inside the rooms. It is calculated with the rules of Presidential Decree 138/1998, the same ones the land registry uses:

• Rooms and service areas (kitchen, bathrooms, corridors, internal storage): counted in full, including internal walls and outer walls up to 50 cm thick. Walls shared with another flat count at half, up to 25 cm.
• Balconies and terraces opening off the flat: 30% up to 25 m², 10% for the rest.
• Balconies and terraces not connected, reached from outside: 15% up to 25 m², 5% beyond.
• Cellars and lofts: 50% if they connect with the flat, 25% if they are separate.
• Private garden: 10% up to an area equal to the flat itself, 2% for the rest.

A garage is usually left out: it is a separate unit with its own price, added at the end.

There is a shortcut. Since 2015 the visura catastale, the land registry extract, shows for homes the cadastral floor area calculated with these rules, in two versions: total, and excluding open areas. Owners can download it free with SPID, as explained in free visura catastale online; a buyer can ask the seller for it. It is a good starting point, to check against the floor plan.

2. The price per square metre of the area

The second figure is what similar homes in the same area cost per square metre. The public reference source is the OMI price ranges of the Agenzia delle Entrate, the Italian Revenue Agency: for every zone of every municipality, twice a year, a minimum and a maximum price for standard, economy and high-end homes, detached houses and garages, in excellent, normal or poor condition.

Three points for using them well:

• Pick the right row. A flat in an ordinary block is almost always a standard home (abitazione civile). Economy homes (di tipo economico) have basic finishes, often in public housing; high-end homes (signorili) have quality finishes and common areas.
• Pick the right condition. Normal means a home you can live in without work; excellent means recently renovated; poor means major work is needed.
• Check the floor area. The zone record states whether the price refers to gross or net floor area. For homes it is almost always gross, so it matches the commercial floor area from step 1.

The OMI range describes the ordinary homes of the zone. It is the base of the calculation, and step 3 decides where the home sits within it. The zone codes are explained in OMI zone codes B1, C2, D1, R1.

Alongside OMI, look at listings for similar homes in the same street or nearby. Keep in mind that these are asking prices: the price signed at the notary, after negotiation, is usually lower.

3. What moves the value within the range

Two 90 m² flats in the same zone can be worth very different amounts. In a comparative valuation, Italian valuers adjust the price for each feature that sets the home apart from the ordinary ones in the zone. The main ones:

• Floor and lift. Upper floors with a lift are worth more, upper floors without one less. A ground floor is worth less if it opens onto the street, more if it has a private garden.
• Light, aspect and view. A bright home, with windows on two sides or an open view, sits in the upper part of the range. One facing a narrow courtyard sits in the lower part.
• Condition and systems. Bathrooms and kitchen to redo, old wiring, single-glazed windows: every necessary job is deducted, because the buyer will pay for it.
• Energy rating. It counts for more every year, as it drives bills and future work. You find it in the APE, the energy performance certificate; how to get it is explained in energy rating of a house in Italy.
• Age and structure of the building. The year of construction matters, but work done on the roof, façade and structure matters more, especially in seismic zones 1 and 2.
• The condominium. High running costs, extraordinary works already approved or a lift to replace lower the value. Ask the building manager before making an offer.
• Extras. A garage, a parking space and a cellar add value, especially in cities where parking is hard.
• The area around the home. Services, transport, noise, flood or landslide areas: within the same OMI zone one street can be worth more than another for these reasons.

4. A worked example

Take a two-bedroom flat of 82 m² of internal floor space, on the third floor with a lift, with an 8 m² balcony and a separate 6 m² cellar, in a well-kept 1970s block. The figures are made up, but the method is the real one.

Commercial floor area.

The price for the area. In our example the OMI range for standard homes in normal condition in the zone runs from €2,100 to €2,800 per square metre.

The starting range. 97.9 × 2,100 = about €205,600; 97.9 × 2,800 = about €274,100.

Where it sits in the range. The third floor with a lift and good light push it up; the 1970s bathrooms and an F energy rating pull it down. A reasonable estimate sits in the middle half, between €225,000 and €250,000. If similar flats in the same street are listed at €260,000, there is room to negotiate.

The result is still a range, and rightly so: it tells you whether the asking price is in line, too high, or a bargain worth a closer look.

5. Market value and cadastral value

They are two different numbers, and foreign buyers often mix them up.

The market value is the one worked out above: the price the home can sell for today.

The cadastral value is used for tax. You take the cadastral income (rendita catastale) shown in the visura, increase it by 5% and multiply it by a fixed coefficient: 110 for a main home, 120 for other homes, when buying from a private seller. Registration taxes are calculated on this figure, which is normally far below market value. A high or low cadastral income says nothing about what the home is really worth.

6. When you need a formal valuation

To buy or sell, an estimate made with this method is enough to get your bearings and negotiate. In some cases the value must be written down by a professional:

• for a mortgage, the bank appoints its own valuer, who follows the Italian Banking Association (ABI) guidelines for valuing properties used as loan security;
• for inheritances, divisions and separations, when heirs or spouses have to agree on a value;
• for an unusual property, such as a high-end villa, a farmhouse to restore or a building with irregularities to settle, where the zone range tells you little.

A valuer, geometra or architect visits the home, checks documents and compliance and signs a report. Which papers you need at each stage is set out in visura, survey, APE and CDU: what you need.

What the report gives you

The report starts from the address and gives you the data for steps 2 and 3. For price: the home's OMI zone with sale and rent ranges by type of home and condition, the trend since 2016, the comparison with a year earlier, the number of homes sold in the last year and an indicative gross rental yield. For the area around the home: flood, landslide and earthquake risk, services within walking distance, transport, noise, air quality, the age of the buildings and the people living on the block. Every figure comes with its official source.

With the commercial floor area from the visura and this data, you can build the range in step 4 in a few minutes. For the checks to do before an offer, see what to check before buying a house in Italy; prices and plans are on how much the report costs.

Frequently asked questions

How is the price per square metre of a home calculated in Italy?

Divide the price by the commercial floor area, not the internal floor area. For an estimate, do the reverse: commercial floor area times the price per square metre of similar homes in the zone, which you find in the Agenzia delle Entrate OMI ranges and in listings for the same street.

Are online property value calculators reliable?

They give an order of magnitude, because they start from the same area data and listings. Only someone who sees the home knows its floor, condition, light and condominium, which is why the result needs adjusting with the criteria in step 3.

Is the floor area in the visura catastale the commercial floor area?

It is calculated with the same rules from Decree 138/1998, so it is very close. The visura shows it in two versions, with and without open areas such as gardens and terraces. If the home was altered after the last land registry update, the square metres may no longer match.

How much does the energy rating affect value?

More every year, because buyers factor in bills and work. A home rated A or B sits in the upper part of the zone's range; one rated F or G, all else being equal, in the lower part.