Property Taxes in Italy

Purchasing a home in Italy involves more than just finding the perfect property—it also entails understanding the tax implications associated with the transaction. Whether you’re buying a primary residence (prima casa) or a secondary home (seconda casa), it’s essential to grasp how property taxes are calculated to budget effectively for your real estate investment. Let’s delve into the intricacies of calculating taxes for both primary and secondary homes:

1. Property Transfer Tax (Imposta di Registro):

– Primary Residence (Prima Casa):
– When purchasing a primary residence in Italy, buyers benefit from reduced rates on property transfer tax. The tax rate is currently set at 2% of the cadastral value or declared value of the property, whichever is higher.
– Additionally, there may be a fixed registration tax of €50. It’s important to note that to qualify for these reduced rates, the buyer must meet specific criteria, including using the property as their primary residence within 18 months of the purchase.

– Secondary Residence (Seconda Casa):
– Buyers acquiring a secondary residence in Italy, such as a vacation home or investment property, are subject to higher property transfer tax rates compared to primary residences.
– The property transfer tax rate for a secondary residence is currently set at 9% of the cadastral value or declared value of the property, whichever is higher. Additionally, there may be a fixed registration tax of €50.

2. Other Considerations:

– **Land Registry Tax (Imposta Ipotecaria e Catastale):**
– Both primary and secondary residences are subject to land registry tax, which is currently set at 1% of the cadastral value or declared value of the property, whichever is higher.
– This tax is payable to register the property with the land registry office and establish the buyer’s legal ownership rights.

3. Calculation Example:

Let’s consider an example to illustrate how property taxes are calculated for both primary and secondary homes:

– Primary Residence:
– Property purchase price: €200,000
– Cadastral value: €180,000
– Property transfer tax (2% of €180,000): €3,600
– Land registry tax (1% of €180,000): €1,800
– Total taxes payable: €3,600 + €1,800 = €5,400

– Secondary Residence:
– Property purchase price: €200,000
– Cadastral value: €180,000
– Property transfer tax (9% of €180,000): €16,200
– Land registry tax (1% of €180,000): €1,800
– Total taxes payable: €16,200 + €1,800 = €18,000

Conclusion:

Understanding how property taxes are calculated for both primary and secondary homes is crucial for anyone navigating the Italian real estate market. By familiarizing yourself with the tax rates and associated costs, you can budget effectively and make informed decisions when purchasing property in Italy. Additionally, consulting with a knowledgeable real estate professional or legal advisor can provide valuable guidance and ensure compliance with applicable tax regulations.

This article was written by Immobil Oikos, an Italian real estate agency, expert in selling real estate to foreign clients, click here to contact us.

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