Buying a property in Sardinia or Italy : Taxes, Fees and Budgeting

The first step when you buy a property is to work out the budget.

I am asked frequently by foreign buyers; what expenses will I incur when buying property in Italy. There are three main costs you need to factor in when working out your budget:

1. Estate agency fees

In Italy, it is normal for both the buyer and the seller to pay a commission to the estate agency. As a buyer you should expect to pay about 3% of the total purchase price.

2. Notary fees

Notary fees are usually calculated with a tiered system and the fees will depend on the market value of the property. As the buyer, you pay the notary fees so therefore you get to choose the notary and you will need to ask them for a quote to determine the final cost.

Some indication of price are:

Property of 200,000 Euros.
you would pay 3000 (TAXs included).

Property of 300,000 Euros
you would pay 3650 Euros of notary fees (TAXs included.)

Because the notary fee is not a %, it is not going to increase a lot with the increase in the value of the property.

If you don’t speak Italian then you should also take into account that you will incur additional costs for either a translation of documents or to give power of attorney to a lawyer or person you trust who can translate for you.

3. Taxes

Tax amounts will be different depending on a few factors, including your residency status and if you buy the property from either a private owner or a constructor.

If you are resident, you pay a lot less, but remember that you have up to 18 months after the purchase to become a resident if that is your plan.

There could also be to scenarios where buy from an individual or from a building company.

If you buy from a private owner the tax is called Registry Tax, Imposta di Registro

If you are resident the tax is only 2% of the cadastral value, however, if you are not resident you can expect to pay 9% of the cadastral value.

Mind you, the tax you pay is a percentage of the cadastral value and not on the purchase price.
This is quite good news when budgeting, because the cadastral value of the property set by the state, is usually set a lot lower than the actual purchase price, typically is less than a quarter of the purchase price.

The second scenario would be buying from a building company, in this case you don’t pay a Registry Tax, instead, you pay VAT which in Italy is called IVA.

Unlike the Registry tax, VAT percentage is calculated upon the full purchase price and is set at 4% if you are resident and 10% if you are not resident or it is a second home.

In order to calculate the imposta di Registro you need to find the Rendita Catastale (Cadastral Income) of the property. You will be provided with this information either from the agency or the owner.

If you wish to have more detailed information about calculating the Imposta di Registro, please visit our website you find our link on the description.

As you can see Italy lives up to its reputation as the land of red tape, “crazy burocrazia”, which is why if you are new to buying in Italy it can be a great idea to hire a local property guide like myself to lead you through the buying process.

I hope you found this information useful.

If you are looking for a property here in Sardinia, please do get in touch and why not watch my video below for more info.