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Sicily tipped as one of the first to emerge when the property market recovers

The Italian island is known more for its Mafia connections than its property market but real estate is starting to open up as people become less concerned with holding onto the ancient family pile.

Rupert Fawcett, the head of the Italian department at the real estate company Knight Frank, said that owning property in Sicily is a sign of prosperity and in the past holding onto property has been much more important than selling.

'The whole concept of a selling market hasn't been really prevalent, until recently. Sicily is very much like Tuscany was 10 to 15 years ago, not quite discovered but becoming discovered,' he said.

The emerging property market started with Italian second home buyers who like properties by the sea but these have become increasingly expensive in recent years.

'Sicily is a summer destination for northern Italians, and they'll pay just about any money to be on the sea,' explained Jeremy Smith, a director at Sicily Property Company in Catania. But in the hills overlooking the sea the same property is half the price.

Prices fall even more for rural properties that are far from tourist destinations like Taormina and Palermo, according to Giovanni Occhipinti, a real estate consultant for Properties Around Italy, an agency based in Abruzzo and Edinburgh.

So far interest from international property investors is mostly from northern Europe but there is growing interest from North American, Australian and Argentinean buyers who have family roots in Italy.

Property prices are based on either the purchase valuation or the cadastral value which is what the public record considers it is worth and is usually significantly lower than the market price. Buyers can generally choose which to opt for but although the cadastral value may save buyers money initially buyers may end up paying 20% in capital gains taxes if they sell the property within five years.

Mortgage for foreign buyers are not common in Italy because of the red tape involved.