If it is the buyer's first property in Italy, and the buyer is resident in Italy, the property tax is less than if the buyer already has other properties in Italy or is non-resident.
The property tax for a non-resident is higher, reaching as much as 10 per cent of the sale price. There are also other fees involved, so make sure you ask the agent what they are.
The taxes you’ll need to pay include:
- Imposta ipotecaria – land registry tax
- Imposta catastale – cadastral tax
- Imposta di registro – registration tax or stamp duty tax
The cost of the first two taxes is 50,00 euro each. The third, the imposta di registro, is the main tax to the government that you will need to pay. The imposta di registro is calculated on the cadastral value of the house, not on its selling price. The imposta di registro will depend on whether you’re buying your home as a main residency or a holiday house. If you’re buying your home to be a holiday house, the imposta di registro will be charged at 9% of the cadastral value of the house. If, on the other hand, you’re buying your home as a main residency, the imposta di registro will be charged at 2% of the cadastral value of the house.
Keep in mind that if you’re purchasing your home to be a main residency, this will be stated by the notary on your deed of sale. From this point on (the signing date), you will then have 18 months to apply for your residency in the house you’ve purchased. If you fail to do this, the government will demand the additional taxes you own — plus a fine. Once you do obtain residency status, remember that you’ll need to spend a minimum of 185 days a year in the house.
In addition to the three taxes listed above, you must consider several other fees, including:
- A notary fee
- An agency fee
- A surveyor fee (If you decide to have a survey done)
- A translator / interpreter fee (If you decide to hire a translator / interpreter)
- A lawyer fee (If, for any reason, you need the help of a lawyer)
The agency fee is generally 3% or 4% of the total price of the house, and it is paid by both the seller and the buyer.
The notary fee will generally vary between 1.000,00 euro and 1.500,00 euro.
On top of every fee, also consider that there will be the IVA (VAT) of 22%.
To these costs, add between 250,00 and 300,00 euro for the additional cost of having your preliminary agreement registered.
As a final note, if you buy a house surrounded by land (such as an olive grove, a vineyard, an orchard, or just a large garden), you have to consider that land in Italy is taxed at the 19% of its cadastral value. As a result, if you buy a property with a large amount of land, be prepared to spend a higher amount of money on your imposta di registro.
Is there any capital gains tax to pay when I sell my Italian property?
In Italy, if you sell a property you have owned for more than five years, there is no CGT to pay. If you have owned it for less than five years then the rate of CGT payable is 20% on the net profit you have made, minus any purchase and sale costs – including notary fees, agency fees etc, as well as any building works you have carried out. You need paperwork to support these costs so make sure you have proper invoices from builders and contractors. You cannot offset furniture and furnishings etc.
If you have owned the property for say 4.5 years you can still advertise it for sale, find a buyer and sign the compromesso (preliminary contract) but if you wait to complete the sale after the five years have passed then you will save on CGT.
If you are resident of another country than Italy you may have some capital gains tax to pay there even if you have none to pay in Italy – check with your accountant.
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