There are a number of costs involved in buying property in Italy, including the property taxes and legal fees. The following is a breakdown of these costs, so you can have a better idea of what to expect when purchasing an Italian property.
Italian property taxes
The calculation of transfer taxes in Italy is quite complicated and we do not have the space here to provide a detailed explanation. A key point to understand is that these taxes are calculated on the cadastral value of the property which is, in general, much lower than the transfer price.
The transfer taxes when you buy an Italian residential property are as follows:
- When you buy from a developer you must pay 10% VAT (22% if the property is registered as luxury)
- If you take up residency within 18 months from the purchase and it is your “first home” (prima casa) in Italy, VAT is 4% and a fixed rate of euro 504 for the other taxes
- When you buy from private or a company not considered developer, you must pay 10% transfer taxes (7% imposta di registro, 2% imposta ipotecaria, 1% imposta catastale).
- If you buy a “first home” you have to pay 3% imposta registro and a fixed rate of €400 for the ipotecaria and catastale taxes.
Transfer taxes are normally paid to the Notary who calculates the amount and transfers the payment to the Tax Office.
Capital gains tax (Plusvalenza)
This tax is based on the increase in the value of the property since the last transfer, is applicable only if the property is re-transferred within 5 years from its purchase. The rate is 20% on the capital gain to be calculated by the Notary and checked by your lawyer.
Need help buying property in Italy?
Our UK-based property law team are highly experienced in helping clients to buy and sell property in Italy, as well as handling a whole range of related issues, such as advice on Wills and inheritance.
With a thorough understanding of both UK and Italy law, we can provide clear, reliable legal guidance in plain English, giving you the confidence to deal effectively with property in Italy.