Retirement Planning Italy - The Codice Fiscale

The Codice Fiscale

There are quite a few steps to buying property in Italy (not to mention establishing residence). But no matter what your goal, the first thing you're going to need is a magic number called codice fiscale. As the name implies, it's an Italian financial identifier and you need it for pretty much any transaction beyond normal tourist activities.

Naturally, there's a form to fill out and of course, it's in Italian. Everything is in Italian of course but it's pretty obvious what goes where. Three that aren't immediately obvious are stato, indirizzo and no. civco. Stato (if you live in the USA) is "Stati Uniti d'America", indirizzo is your street and no. civco. is your street number. So if you live at 123 Main Street indirizza = "Main Street" and no. civco. = "123". And remember, in Italy (and just about everywhere else) dates are in the form DD/MM/YYYY.

To get the form you need, find your state (or county for places that overlap like New Jersey) in the list of Italian Consulates below. Click the "English" button at the upper left, then click "Forms" and finally on the forms page click "Codice Fiscale application". The form (usually a PDF or Word document) will download and you're all set.

You may be able to visit your consulate, passport and proof of residence in the consulate's jurisdiction (i.e your driver's license) in hand and fill out the form there. But read your consulate's instructions carefully. The Philadelphia office asks that you apply for the codice fiscale by fax or mail, not in person.

The Philadelphia consulate returned my paper Certificato Di Attribuzzione Del Codice Fiscale about two and a half weeks after I mailed in the form and documentation. The Certificato is a simple printed form with the codice fiscale and it's bar code equivalent at the top, my full name, date of birth and the consulate's stamp and the signature of an official at the bottom. 

I've read elsewhere it can take as long as 3 months to get the official plastic card. Technically you don't need the card, but I've seen a few online comments indicating the paper version was not accepted. Conclusion... apply early so you'll have the card if you need it.

Italian Consulates:

CONSOLATO GENERALE D'ITALIA IN BOSTON

Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
CONSOLATO GENERALE D'ITALIA IN CHICAGO
Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Wisconsin, Wyoming

CONSOLATO D'ITALIA IN DETROIT

Indiana, Kentucky, Michigan, Ohio, Tennessee

CONSOLATO GENERALE D'ITALIA IN PHILADELPHIA

Pennsylvania, Delaware, North Carolina, West Virginia, New Jersey (only the following counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean and Salem
CONSOLATO GENERALE D'ITALIA IN LOS ANGELES
Arizona, California (The following counties: Imperial Valley, Kern, Los Angeles, Orange, Riverside, Santa Barbara, San Bernardino, San Diego, San Luis Obispo, Ventura), New Mexico, Nevada
CONSOLATO GENERALE D'ITALIA IN MIAMI
Alabama, British Virgin Islands, Cayman Islands, Florida, Georgia, Island of Saba, Mississippi, Puerto Rico, St. Maarten, St. Eustatius, South Carolina, Turks and Caicos, U.S. Virgin Islands
CONSOLATO D'ITALIA IN NEWARK
The following counties in New Jersey: Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union, Warren
CONSOLATO GENERALE D'ITALIA IN NEW YORK
New York and Connecticut and the British Territories of Bermuda Islands and the following cunties in New Jersey: Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union, Warren
CONSOLATO GENERALE D'ITALIA IN SAN FRANCISCO
Alaska, California (except the following counties: Imperial Valley, Kern, Los Angeles, Orange, Riverside, San Diego, Santa Barbara, San Bernardino, San Luis Obispo and Ventura, which fall within the jurisdiction of the Consulate General in Los Angeles), Idaho, Montana, Oregon, Utah, Washington, Hawai'i. Also, the following American territories of: Guam, Northern Mariana Islands, Samoa, Wake Island, Midways Islands, Johnston Atoll

Retirement Planning: The Trip to Guardia Sanframondi

We did it! The planning is done, reservations made, and even with months to go, the nervous excitement is building. So what does a trip from Philadelphia to Guardia Sanframondi look like?

• Day 1 Monday: Overnight flight Philadelphia to Fiumicino Airport
• Day 2 Tuesday: Overnight stay at the Airport Hilton
• Day 3 Wednesday: Pick up rental car and drive to Guardia Sanframondi (about 2.5 hours)
• Day 3-7 (Wed - Sun): Explore Guardia Sanframondi and check out the houses
• Day 7 Sunday: Return to Fiumicino and drop off car, shuttle to Termini, check into Hotel Sonya
• Day 7-11 (Sunday - Thursday): Enjoy Rome
• Day 12 (Friday) - Return flight to Philadelphia

Day 2 - While we will get to Fiumicino in plenty of time to drive to Guardia Sanframondi we know that we'll be tired and cranky from the flight. So we're going to invest in our comfort and sanity and just camp out overnight at the Airport Hilton. It's very likely we'll head into the city for lunch at least. There are plenty of transportation options including the Hilton's free shuttle bus, Terravision and SIT busses (€4.00/ €8.00) and a couple different trains.

View Larger Map

Day 3 - The Drive. Most of the drive is on the A1 autostrada so this doesn't look too tricky. We've got both a printed map and a GPS loaded with a map of Italy (and Greece) so we shouldn't have any trouble. We've also got a Europe enabled cell phone lined up so we'll be able to call for help or advice if we need it.

Day 3-7 - Guardia Sanframondi. Of course we're staying at Arthouse Guardia. Our goal is to get a feel for the town and the available housing. If you're planning a trip, and want to stay at the Arthouse book it ASAP - it looks like the calendar is filling up rather quickly.

Day 7-11 - Rome. After we return the car at the aiport we'll take the train in to Termini. We're staying at Hotel Sonya, favorite of  Rick Steves and his followers and only a few blocks from the train station. It's advantage this trip is that it's a relatively inexpensive place in an area where we want to spend some time. Some of my most popular blog posts have been on under appreciated but historically important areas like the Forum Boarium. I'm going to be gathering material for a few more posts like that (you'd be amazed at all the stuff over by Termini). 

In terms of "must see" things, Beth hasn't been to Galleria Borghese - that's the only event that must be scheduled for this trip. We're going to try to visit as many underground sites as we can. Most are below churches and are either free or cost just a couple euro to visit.

Day 12 - Return flight to Philadelphia.

Retirement Planning: Guardia Sanframondi Update

A couple days ago Clare Galloway alerted her loyal HHI fans obsessed with Guardia Sanframondi to a short article on the town website. I've bolded a couple interesting parts. Translated here by Google+:

Following the telecast U.S. House Hunters International, turned to the Guard in April last year and aired in America on August 14, which had as its protagonist Clare Galloway, Scottish artist who for more than a year living in the town, the municipality Guard received 40 requests for American citizens interested in the quaint village Sunni. Main location of the program was the old town with its beauties, property and places it has to offer and that's where the protagonist of the documentary, said the reasons which led it to change their lives, leaving Scotland and moved Guardia.Meanwhile, the municipality has set up a special office at the Town Hall Sanframondi Guard to respond to multiple requests for information to buy property from abroad and to acquire the availability for sale by the owners of the buildings of the old town. To coordinate the project the architect Luca Sebastianelli, which states: "This is an intervention aimed primarily to repopulate the historic center Guardiese and, therefore, to enhance it in its historical and artistic aspects that characterize it.'s Office has activated this service monitoring of different types of accommodation through the identification of summaries of possible properties to reuse, to include in the initiative and, eventually, to buy. " 
Meanwhile, the Scottish artist Clare Galloway, who through his story in the American television program has generated considerable interest among U.S. citizens, will act as interpreter and coordinator for all those who come to visit the historical center. The Scottish artist, also points out: "After the broadcast is aired in America, I have received many requests for more information on how you live in the Guard, uses and costumes, as they were very attracted by the lifestyle I am living in the town Guardiese, In fact, the atmosphere and the tranquility of the picturesque old town of Guardia, has taken over the chaotic life of the city. "For more information write to the following e-mail: lucasebastianelli@alice.it

Although this article makes it sound like Clare has an official role in the business, she really doesn't (see here comment below).

And just to remind those of us who tend to get over-excited... Clare lived in Guardia for more than a year fixing up the Arthouse before HHI came to make the show. Buying and renovating a home that has been vacant for decades would be a huge project in one's home town, let alone Italy.

Update: The Guardia Sanframondi episode of HHI will repeat October 11, 2012.
Update 2: Please see Clare's comment below.

Retirement Planning - Italian Property Tax

imposta municipale unica

When I read in an update from Clare Galloway that her house was so inexpensive she paid no property tax, I immediately wondered how that could be. It turns out that for ordinary folks like us, the Italian system is amazingly simple.

In Italy, property tax (for real estate at least) is called IMU - imposta municipale unica (it used to be ICI). The problem with getting a handle on what one might pay lies in the fact that the base number is something called "rendita catastale" - a notional "rent" that might be obtained from the property. In many cases this number is very low and it can be reduced further if the house is in a mountainous area or a depopulated town.

Once you've got the rendita catastale for your property, calculating the tax is simple:

Retirement Planning: Utilities Update

Guardia Sanframondi

As part of our exploration of Italy as a potential retirement location we've been corresponding with Clare Galloway, a Scottish artist featured in a recent House Hunters International episode. She's working with the mayor and town council of Guardia Sanframondi to put together a list of available houses in the old part of town and recently sent out some basic information about the cost of living there. But before I get to that...

What's the deal with these places?

In the case of Guardia Sanframondi (and other hill towns in Campania) it's earth quakes. Back in 1980 there was a big earthquake in the region: Terremoto dell'Irpinia. Almost 3000 people lost their lives and 300,000 were left homeless. Rebuilding did not go well. Due in large part to various forms of corruption less than a quarter of the funds spent actually went to reconstruction. As a result, many old hill towns became depopulated, their inhabitants rebuilding on the surrounding plains.  The same process is occuring today in L'Aquila Abruzzo where a 2009 earthquake devastated L'Aquila the city (and capitol of the region) and a number of other hill towns. Reconstruction there is ongoing, but corruption appears to be less of a problem today than in the 80's.

Some of these towns are actively seeking buyers for these very inexpensive houses (in Sicily the town of Salemi tried giving them away!) . Artists like Clare, folks (often from the UK) looking for holiday homes, and even people like us, trying to plan a reasonably comfortable retirement. Most of these places require some work (ok, a lot) to bring up to modern Italian standards. But there are enough that are liveable or nearly so to make it worthwhile to go take a look.

OK, but what about the utilities?

This is what Clare pays:

Real estate taxes: € 0,00 - her house is valued below the minimum taxable amount!
Water: € 15,00/month
Electricity: € 27,00/2 months
Bottled Gas: € 28,00/3 months
Phone/Internet: € 30,00/month
Mobile: € 8,00/month (!)
Trash Collection: € 150,00/year

If I've added everything up correctly that comes to € 1.060,00 a year - about € 88,33 or $110.85 per month. If you read my post on utilities costs you'll be a bit amazed (as I am) at how far off I was. Without knowing anything about Clare's lifestyle it's hard to say where the differences come but it's pretty clear that the Italian lifestyle involves a great deal less electricity.

We're starting to plan a trip in late Januray or early February 2013 (that's when flights are cheapest) so it won't be long until we find out a lot more.

Retirement Planning: Utilities In Italy

It should come as no surprise to anyone who reads this blog that we've been exploring the idea of retiring in Italy. In May I wrote a short post on health care costs, a subject it's pretty easy to get a handle on. Today I'm looking at a topic that's not so easy: utility costs. Fortunately, with a little effort it is possible to come up with some fairly realistic numbers.

The first step of course is to figure out what utilities cost here in Philadelphia. Both gas and electricity come to us from the same company: PECO. As a result it's pretty easy to get an idea of our usage from their website. This is what it looks like:

	kWh	Ccf
January	720	303
February	538	284
March	385	232
April	353	179
May	383	80
June	1033	30
July	1223	18
August	1936	19
September	1319	18
October	1051	23
November	701	63
December	563	132
	9485	1381

It's pretty obvious what's happening. Electric usage skyrockets when the weather warms up and the central air kicks in and gas usage goes up when winter rolls around and the hot water system turns itself on. We pay $232 on a monthly budget plan or $2,784 annually. That's for a poorly insulated 1300 square foot 2 story, 3 bedroom house built in the 1930's.

In Italy we're looking at much smaller houses; something on the order of half that size (60 - 70 square meters), built a century or more ago and having 2 foot thick stone walls. Structurally these houses are basically two or three more or less rectangular rooms stacked on top of each other and subdivided various ways (here in Philadelphia there are brick row houses called "trinities" built on the same plan). Typically there will be a "grotto" on the lowest level, often partly below street level used for storage with two living levels above it.

The first floor is usually a single large room containing the kitchen, (typically with a wood burning fireplace that may be the only heat source in the house) dining, and lounge areas. In unmodified houses the only plumbing in the house is on this level so you often find a small bathroom tucked under the stairway or behind the kitchen area. The top level has one or two bedrooms and if you're lucky a reasonably modern bathroom. There's almost always a balcony off the bedroom with a place to hang your clothes to dry.

So what's it going to cost to supply utilities to one of these little places? It turns out there's a website that documents energy cost all over Europe: Europe's Energy Portal. For gas in Italy the prices are in €/kWh: 0,07 for moderate (15,000 kWh/year) users and 0,067 for heavier (30,000 kWh/year) users. Using the numbers on EEP, 1 kWh of gas is equal to .0933 cubic meters. A cubic meter is 35.31cubic feet so 1kWh of gas equals about 3.3 cubic feet. PECO shows our usage in Ccf - hundreds of cubic feet - so we use about 138,100 cubic feet or 41,848 kWh. 

Yikes! But remember, we have an old, inefficient hot water heating system in a poorly insulated house twice the size of what we're looking at in Italy. We're also looking at towns at roughly the same latitude as Naples, and area where it rarely gets much below freezing and might snow a few inches once or twice a year. So let's make some assumptions:

• Half the house means half the heating
• The coldest part of the year is more like November here
• Summer usage will remain about the same since it's hot water for washing, bathing, etc.

When we do that we get this:

	Ccf
January	32
February	30
March	24
April	19
May	9
June	15
July	9
August	10
September	9
October	12
November	32
December	32
	229

22,900 cubic feet or 6,939 kWh. at €0,07 each that comes to €485,75 a year for gas. In winter we'll get a boost from the wood burning fireplace - they're often integrated into the heating system and of course that big hunk of masonry will retain a good bit of heat over night. Even so, I suspect that estimate is low.

Electricity is easier. Outside the summer months when the big air conditioner is on we use an average 520 kWh per month or 6240 kWh per year. EEP shows €/kWh: 0,2031 for moderate (3,500 kWh/year) users and 0,2485 for heavier (7,500 kWh/year) users. That comes to €1.550,64 a year.

Double Yikes! But look at that first chart. What's different about March/April/May? I think that the increase in electricity usage in the winter months is due to the fact that the pump for the hot water system is operating more or less constantly. So what if we use that average? That's 374 kWh per month or 4488 kWh/year for a total of €1.115,27. Still a lot, but more reasonable.

But wait! Most of our electric usage is washer/dryer/range/refrigerator (We have CFLs everywhere except the kitchen). Smaller and more efficient European equivalents will cut those costs by a third or more. And of course we won't have the 65 inch flat screen and home theater sound system in a 70 square meter house. So I'm going to suggest that our electricity usage is going to be about 60% of what it is in Philly - about €670 per year.

So what's that add up to? €1.155 (about $1,443) per year for gas and electricity. I like the look of that number. With health insurance at about $487 (x2) a year we're looking at about $2,417 per year to keep the lights on and stay healthy. For me, that's about 1.5 Social Security checks. It's also about $600 less than Medicare alone for the two of us.

Note: There's a website here that includes some interesting cost of living information. Although estimate is on the low end of their utilities average, it's for a smaller home and doesn't include water and garbage collection so I'm pretty happy with my assumptions.

Retirement Planning - Health Care

The company I work for peppers us with emails on various subjects on a daily basis. Today's was "Your Financial Welbeing newsletter". The first article started with this line:

The average annual cost of healthcare for families of four in the U.S. is $20,728.

Now, as someone nearing retirement, I have some interest in this subject beyond learning how much mre it's going to cost me when the annual enrollment period rolls around. So I decided to poke around a little.