Property Taxes and Additional Costs When Buying a House in Italy

Embarking on the journey of purchasing a home in Italy involves not only finding the perfect property but also understanding the financial implications and associated costs. From property taxes to additional expenses such as notary fees and agency commissions, there are several factors to consider when budgeting for your Italian real estate investment. Let’s explore the differences in taxes and costs between buying a primary residence and a secondary residence in Italy:

1. Property Taxes:

– Primary Residence (Prima Casa):

– When purchasing a primary residence in Italy, buyers may be eligible for favorable tax benefits, including reduced rates on property transfer tax (imposta di registro) and land registry tax (imposta ipotecaria e catastale).
– The property transfer tax rate for a primary residence 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 in order to qualify for these tax benefits, the buyer must meet certain criteria, including using the property as their primary residence within 18 months of the purchase and not owning any other residential property in Italy.

– Secondary Residence (Seconda Casa):

– Buyers purchasing 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. Additional Costs:

•  Notary Fees:
  – In Italy, property transactions must be formalized through a notary public (notaio), who is responsible for preparing the deed of sale (atto di vendita) and ensuring that the transaction complies with legal requirements.
  – Notary fees typically range from 1% to 3% of the property’s purchase price, depending on various factors such as the complexity of the transaction and the notary’s fee schedule. It’s essential to obtain a quote from the chosen notary to understand the specific costs involved.
• Agency Commissions:
  – If you engage the services of a real estate agency to assist you with finding and purchasing a property, you may be required to pay a commission fee based on the final purchase price. Agency commissions in Italy are negotiable and typically range from 3% to 6% of the property’s purchase price.
  – Before engaging the services of a real estate agency, it’s advisable to clarify the commission structure and ensure that it aligns with your budget and expectations.

Conclusion:

Navigating the financial aspects of buying a house in Italy requires a thorough understanding of property taxes and associated costs. Whether you’re purchasing a primary residence or a secondary residence, being aware of the differences in tax rates and additional expenses is essential for budgeting and planning your real estate investment. By working with knowledgeable professionals and seeking expert guidance, you can navigate the complexities of the Italian real estate market with confidence and ensure a smooth and successful transaction.

If you want to find out how taxes are calculated as a first or second home, click here.

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

Feel free to customize this article according to your preferences before publishing it on your WordPress site. Happy house hunting!