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BUYING A PROPERTY IN ITALY [Part 1] – Taxes, Fees and Budgeting

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

Something I am asked frequently, especially by foreign buyers, is what expenses you will incur when buying property here in Italy. There are three main costs you need to factor in when you are working out your budget:
1 – estate agency fees
2 – Notary fees
3 – tax

Estate agency fees

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

Notary fees

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

But I can give you some indication of price:

Typically with a property of 200,000 Euros.
The correspondent notary fee is 3000 vat 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.
Just to give you another example:
For property sold for 300,000 Euros
you would pay 3650 Euros of notary fees (vat included.)

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.

Tax
what you pay will be different depending on your residency and who you buy the property from either a private owner or a constructor.

If you are resident you pay a lot less, so remember that you have up to 18 months after the purchase to become a resident.

So there could be to scenarios: you could 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.

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Arrivederci!

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