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Hidden expenses of property purchase in Italy

When you become an owner of real estate in Italy after happiness comes a sad realization that this is not the end. Just like in many other countries, taxes are waiting for you even in Italy. But are they that big to be scared of? How many fees yo must be aware of? All about taxes in our new article.

Property purchase tax

The amount of taxes when buying real estate depends on the type of property (primary/secondary), status of the buyer (resident/non-resident) and number of properties in his possession.

  • Purchase of first* property from an individual (not luxury real estate) for residents of Italy:
    • Registry tax (Imposta di Registro) - 2%
    • Cadastral and mortgage tax (Imposta Ipotecaria e Catastale) = €50 + €50

* secondary real estate; real estate from the developer in a building of 5 years or less or sold by another legal entity

  • Purchase of first property from a legal entity for residents of Italy:
    • Registry tax (Imposta di Registro) = €200
    • Cadastral and mortgage tax (Imposta Ipotecaria e Catastale) = €200 + €200
    • VAT (IVA) - 4%
  • Purchase of property from an individual for non-residents or second property for residents of Italy:
    • Registry tax (Imposta di Registro) = 9%
    • Cadastral and mortgage tax (Imposta Ipotecaria e Catastale) = €50 + €50
  • Purchase of property from a legal entity for non-residents or second property for residents of Italy:
    • Registry tax (Imposta di Registro) = €200
    • Cadastral and mortgage tax (Imposta Ipotecaria e Catastale) = €200 euros + €200
    • VAT (IVA) – 10% (22% - luxury housing).

Please note! Taxes are much higher for non-residents. But all foreigners have the opportunity to use tax benefits.

You can use benefits in case of three following conditions: 

  • The property is not classified as luxury.
  • You did not buy another Italian property using tax benefits (the "first property" requirement).
  • You must register you place of residence at the address of the property within 18 months from the date of purchase. If you are not a resident of the EU, you will need to obtain a residence permit and register on the address to get the benefit. 

If you use the benefit, but don’t get a residence permit and don’t register in 18 months, then in the future you will have to pay the difference from tax rates, as well as a fine of 30%.

Please note! When buying real estate in the secondary market, the 9% tax is charged not from the market cost, but from the cadastral value, and it is often quite low. For example, the cadastral valuation of a luxury villa for €3 000 000 may be only €500 000, so taxes will be lower than it seems at first glimpse. In the primary market, VAT is calculated from the market cost of the property.

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Broker’s fee

According to the Italian law, if ations of a certified realtor has led to a successful deal, they have a right to take free both from a buyer and a seller. However, the law doesn’t regulate the amount of commission, you have to discuss it with the agent. The rates are 3-5% +VAT on average. If several companies participate in the deal, they divide the commission among themselves.

Notary fee + Register fee

In Italy you transfer the entire cost to the notary. The notary themself calculates and pays property purchase, state fees for registration and their own fee.

The notary's fee depends on the cost of the property. The larger transaction amount is, the lower the percentage. As a rule, the cost of services ranges from 1% to 3.5%, including the cost of registration.

Also read: The Rules of Buying Italian Property for Foreigners

Connecting utilities (only for new buildings)

You have to pay for connection of utility networks, when purchase an apartment in a new building. The price depends on location. Usually, it’s about €2000.

The interpreter's fee

According to the Italian law, you as a foreign buyer have need an interpreter at the final conclusion. It can be anyone who speaks Italian and your native language fluently. This service can also be included in the final fee of your agent, if they speak your native language as well. Such service costs additionally a few hundred euros.

Quoting conditions of Prianproperty.com materials

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