How much are the Fees, tax’s and costs when buying a property in Italy?
So, you have enjoyed the rolling hills of Italy, eaten the best pizza and pasta of your life and fallen in love with Italy over a bottle of chianti. Isn’t it time you bought your own slice of Italy?
Sounds Perfecto. But before heading in full speed, you will need to look at how much buying a property in Italy will really cost you?
Just like in the UK, there are taxes, fees and costs to take into consideration. Italy has one of the highest associated buying costs in the whole of Europe, so you’ll need to make sure you factor this into your budget. Below we take a look at some of the additional costs of buying property in Italy that you will need to factor into your budget.
Registration tax (imposta di registro)
This is charged on the value of the property that is determined by the land registry in Italy. This is known as the “rendita catastale” and is usually less that the purchase price. The tax is 3% or 7% of this value, depending on your circumstances.
If you are a non-resident and use the property as your second home (holiday home) this will 7%. If you are a resident and the property will your main home it is usually 3%.
TOP TIP: The declared value is often less than the purchase price. Check this value out with your Lawyer or Estate agent so that you can accurately calculate the tax.
If it’s a new build, you don’t pay registration Tax, you have to pay VAT instead (see below).
Land Registry Fee
If you are a resident and this is your first home, there is a fixed fee of €168. For non- residents and second homes, there is 1% of the declared value to pay.
Notary’s Fees (Notaio)
The notary fees vary according to many factors, including the house price, but can be between 0.8 and 3 percent.
The higher the value of the house, the less percentage you pay, so that the fee is proportionate to the amount of work required.
Legal fees for your property purchase can vary from lawyer to lawyer (avvocato a avvocato). The lawyer’s fee will this depends on their location, purchase price, and the expertise required. In general these are anywhere between between 1% and 2.5% and can be subject to a minimum fee for low value properties.
This is an area you should not try and save money on as it’s vital to get proper independent advice from an English-speaking lawyer not connected to the estate agent or seller who you can understand and trust to protect your investment.
Estate agent fees (Agenet immobiliare)
Unlike in the UK, the Estate Agent fees are usually split between the buyer and seller. Estate agent’s commission in Italy and can range from 5-10%. For buyer this usually charged in addition to the sale price although is sometimes included. It is therefore well worth enquiring whether this will be due on top before you make any offers.
New builds Tax VAT (IVA)
If you are buying a new build, you don’t have to pay registration tax, although you will have to pay VAT (IVA) on your new home. This is charged at 4%, 10%, or 20% depending on your circumstances.
The rate of 4% is for residents as their first home.
The rate of 10% is for non-residents and second homes (holiday homes).
The rate of 20% is for houses designated as luxury houses.
Summary of typical fees, tax’s and costs for buying a second home in Italy
Registration tax 7%
Land Registry tax 1%
Notary’s Fees 1.5%
Legal Fees 1.5%
Estate Agent fees 3 %
Average Total 14%
When planning for your very own slice of Italy, don’t forget that on average you will need to put an additional 12 – 14% to one side on top of the purchase price to pay for for your taxes and other purchase costs. If you are lucky enough to be buying a “Luxury” new build property, this can be considerably more.
Top Tip: There can be some tax reliefs if you are renovating a property in Italy. If you are thinking of renovating a property in Italy – you may want to ask your lawyer about this!
Happy house hunting!
For further information about buying property in Italy call us on 01244 478 911 email us at firstname.lastname@example.org or download our free guide to buying property in Italy.
Article published: September 15, 2016