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Are you dreaming of buying a house in Italy but bureaucracy scares you? Here is all you have to know to purchase a home in Italy and avoid unpleasant surprises
Just picture yourself spending your summer holiday on the patio of your villa in Sardinia, sipping a glass of Vermentino di Gallura DOC and admiring the vastness of a breathtaking panorama. Isn't this a dream? And then why not buy a house in Italy and make it real?
For many, the main obstacle is the Italian bureaucracy which often is results very complex enough to give up the idea in the first place. In this article, we will tell you which are the main fiscal obligations and expenses to be incurred when buying an estate in Italy.
Who can buy a house in Italy
The first point you have to consider is that not all foreigners can buy property in Italy.
To buy a house in Italy foreigners must satisfy the following requirements:
- Foreigners residing in Italy. In this case, the residence permit is required and the same applies to all the family members residing in Italy and for those stateless for less than 3 years. It is also mandatory to have an Italian Tax Code;
- Foreigners not legally residing in Italy. In this situation, the purchase is more complicated because a foreigner not residing in Italy can buy a property is there is a reciprocity treaty that permits a material condition of reciprocity between their country of origin and Italy. This means that also an Italian citizen can purchase a property in the country of origin of the buyer. The existence of a sound convention can be verified on the website of the Ministry of foreign affairs. Also, in this case, is mandatory to have an Italian tax code.
- Citizens of EU or EEA countries: there are no special requirements in this case and the same applies to stateless persons residing in Italy for more than 3 years.
Taxes applicable to Italian property purchase
When buying a house in Italy, the taxes could vary depending on whether the seller is a building company or an individual.
If you buy a house from an individual you will be exempt from VAT, but you'll have to pay:
- 9% stamp duty
- Mortgage taxes: € 50
- Cadastral taxes: € 50
If you buy a house from a building company within 5 years from the construction of the estate, in addition to the above taxes, you'll have to pay also the VAT:
- Stamp duty: € 200
- Mortgage taxes: € 200
- Cadastral taxes: € 200
VAT: 22% for luxury estate and 10% for standard ones.
If it has been more than 5 years since the construction of the property, the building company can decide whether to charge or not the VAT and state it on the preliminary contract or the deed of sale. In this case, you'll pay:
- 9% duty stamp
- Mortgage taxes: € 200
- Cadastral taxes: € 200
Please note that besides the payment of the indirect taxation, who buy a house in Italy has also to pay the property taxes half-yearly and/or yearly which are:
IMU: the municipal property tax owed from who owns a property, except for non-luxury principal residences.
TARI: it is the waste tax charged on those who use the property both for consideration or gratuitously.
First home taxes reductions
Everything changes if you meet the "first house tax reduction" criteria. What are they?
- You must have the residence permit in the same municipality where the property is (or acquired it within 18 months for the purchase), or the property must be located where your main workplace is.
- You do not have to own any other estate of the national territory or have any right of enjoyment of an estate purchased using the primary residence benefits (also if the consort has made the purchase).
- IMU is not due for the primary residences. The IMU has to be paid only if the property is considered to be a luxury one, therefore, falls under the A/1, A/8 and A/9 cadastral categories, i.e. noble houses, villas and castles. If the property falls under one of these categories, the IMU has to be paid with a 0,4% rate yet in this case you also have the right of deduction on the primary residence the amount of which is established by the town hall with a specific resolution.
Registration of the preliminary contract
Before signing the deed of sale, the Parties could agree to commit to the purchase by signing a preliminary contract of sale. In this case, one should take into consideration the registration fees of this preliminary act at the Revenue Agency within 20 days from the date of the signature).
- a € 16 duty stamp every four leaves of the contract;
- € 200 flat fee
- 0,5% registration fee on the eventual deposit
- 3% registration fee on the eventual down payment that will be then deducted from the final registration fee.
The notary fees
The notary fees is another expense you have to include in your budget. The notary is a legal professional who prepares and certifies the deed of sale, helps you with the payment of the Revenue Agency taxes, and if needed, with the mortgage application. The notary's quote rises in direct proportion to the price of the property transfer, is generally around 1-2,5% of the purchase price and is based on the performances required.
If you need the assistance of a professional real agent to find your holiday dream home in Sardinia, we will support you in each step of the purchase process with any formalities both for fiscal, legal and notary advice, until the draft and signature of the deed of sale. With professionalism, discretion, and reliability, we protect your interests, finding a home to your dream of living in Costa Smeralda.
Contact us now
Engel & Völkers
Licence Partner Porto Cervo
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Piazzetta degli Ulivi N° 307021 Porto Cervo (SS)Italy - P. IVA 03116340922
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Phone +39 0789 94183Fax: +39 0789 92584
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