The Implications of Partial Ownership
At first glance, the idea of partial ownership may appear to be a dealbreaker.
But with further thought, perhaps not. The most important aspect of ownership is the right to possession and you would have that in full (as I have had it during the past twenty years). As co-owners, my siblings have only a single right which could be of concern and that is to personally share possession of the villa with you. How likely is that?
All four of my siblings and I visited the villa during a family trip to Italy with my father and his mother in 1968. The oldest visited my father and step-mother for two weeks in the 1980s. And the youngest visited during my absence in 2006 in an unsuccessful attempt to lock me out. Although I have repeatedly invited them to visit me during the past twenty years, none has expressed any interest in doing so. None speaks any foreign language and and I know of no foreign travel by any of them. In sum, they are very typical Americans. They are also getting on in years: they are 75, 73, 67 and 65 years old.
So, although the likelihood of your being joined by a co-owner wanting to spend some time at the villa appears vanishingly small, think about how this might actually occur! First, there's plenty of space in the villa for such a visitor. Second, that space is not furnished, so when you make arrangements for the arrival of your visitor, be certain to mention the need to bring furniture. You could also mention the lack of facilities for cooking.
Although you should feel comfortable about partial ownership, you need not take any ultimate risk that my siblings will cause trouble. I'm happly to arrange a way to reverse the sale in such an event.
A further right which my siblings would have as co-owners is the right to two-thirds of any net income derived from the villa. For this reason, you should not intend to receive income from rentals and the like.
A limitation of partial ownership is that it's difficult to sell (ask me!). So you would want to look forward to eventual full ownership. You could always make an offer to purchase the shares of my siblings. And in fact you could do this in advance of your purchase from me! They've had a standing offer from me to purchase an individual one-sixth share for $20,000. I have no idea what larger offer might tempt them to sell immediately but I think it's clear that, on the death of the first to die, a personal representative would probably be willing to accept the $20,000 as soon as he discovers that the Italian probate proceeding to transfer the share to a beneficiary would cost at least $10,000.
One useful aspect of partial ownership is that when a partial owner seeks to transfer his share, the remaining owners are entitled to a right-of-first-refusal at the sale price. So, although it's hard to imagine who would be interested in buying a one-sixth share without confirmed possession, you would always be able to purchase that interest yourself.
Finally, there is the advantage of partial ownership which comes from paying only one-third of the real estate taxes due each year, around $3500/year for the entire property. I don't have any recent information about whether my siblings have been paying their share of the taxes each year. They did so during the 2000s. Since one is not sent a bill but has to engage a geometra to compute the tax, it's likely that they've stopped doing so. I don't know what the process is in Italy for selling a property to recover past-due taxes but imagine that it would be similar to the US, in which case an additional sixth might cost less than $20,000.
Fair Market Value
I'm sure you'll do your own investigation into the fair market value of the villa. But it may be helpful to tell you what I know. In 1998, when the picture was taken, a local real estate broker told us that the villa could be sold for between $1.6 and $1.8 million. For US tax purposes, it was assessed at $980,000 in my father's estate. Given its current barely-maintained condition, its fair market value is said by local brokers to be about €1 million.