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What are the fees involved in buying your dream home in Italy?

Let’s talk about a variety of fees you have to pay when you decide to buy your dream home in Italy!

Most property fees are based on the ‘declared’ value of a property, (rendita catastale) which is usually less than the actual purchase price or its ‘market’ value.

Fees are usually payable on the completion of a sale and range from around 9 to 15 % for a non-resident (the average is around 13 per cent), although they can be as high as 22 % for luxury properties. If you’re a resident, the fees associated with buying a property in Italy can be offset against income tax.

 

Registration Tax

Registration tax (imposta di registro) is the main tax on property. The amount payable depends on whether it’s your first and only home or a second home, whether it’s a new home and whether you’re a resident, as follows:

  1. Buyers of new properties don’t pay registration tax but must pay VAT (see below).
  2. On your first home, you’re eligible for a reduced tax of 2%. The property must be your principal home for residential use and be located in your present or future comune of residence (or in the comune where you have or plan to have your main place of business) and it mustn’t be classified as a ‘luxury’ home.
  3. The registration tax for non-residents and those buying second homes is 9%, so if you’re planning to become a resident in Italy it will pay to do so before buying a home there.
  4. If you’re buying an agricultural property, you must pay tax at 15%. When a property comprises both an urban building and agricultural land, tax is calculated separately for the building and the land.

Registration tax is payable on completion.

 

Land Registry Tax

Land registry tax (imposta catastale) is payable on all property purchases and, as with registration tax, the amount payable depends on whether it’s your first and only home or a second home, whether it’s a new home and whether you’re a resident. Buyers of second homes and non-residents pay 1% of the declared price.

 

Value Added Tax (VAT)

Buyers of new properties must pay VAT (IVA), which is levied at 4% for first home resident buyers, at 10% for second home and non-resident buyers, and at 22 per cent on luxury homes (with a rating of A1 in the property register). VAT may be included in the price by the builder or developer, but make sure you check this. If you build your own home, you pay VAT at 4%; if you buy from a company, you must pay VAT at 22% irrespective of the type of property. VAT at 22% is also levied on all professionals’ fees.

 

Notary’s Fees

Notary’s fees depend on the price of a property and are higher (as a percentage of the selling price) on cheaper properties. There’s also a fee for each page and each copy of a contract, plus fees for extra services such as taxes (e.g. tax stamps), expenses, legal advice and any payments made on your behalf.

If you buy a home through a real estate agent, he may have an agreement with a notary (notaio) whereby all notary’s expenses are incorporated into a ‘standard’ fee and agreed with the buyer. Med-Imm Srl offers you this type of service, check it with us!

 

Estate Agent’s Commission

Agents’ commissions (provvigione) vary considerably ( we usually apply from 3 to 5%)

 

Utility Fees

If you buy a new property, you must usually pay for electricity, gas and water connections and the installation of meters. If you buy a resale property, you must usually pay for the cost of new contracts, particularly water.

 

Other Fees

Other fees may include surveyor’s or inspection fees, architect’s fees and the cost of moving house.