Buying real estate property in Italy: what taxes will you have to pay?
You have decided to buy a real estate property in Italy. What taxes will you have to pay?
When buying real estate in Italy under a contract of sale, you should make provision for the following mandatory tax obligations:
- registration fee (l`imposta di registro),
- mortgage fee (l`imposta ipotecaria),
- cadastral fee ( l`imposta di catasto),
- VAT (l’IVA) (if the seller is a legal entity).
If you purchase real estate from an individual, you will have to pay the following taxes:
- registration fee (either 2% or 9%. The basis for calculating this tax is the cadastral value, which in most cases is lower than the market value);
- mortgage fee (charged as a fixed amount of 50 euros);
- cadastral fee (charged as a fixed amount of 50 euros).
(data as of January 2021, Decreto Legge n.104 del 12/09/2013)
What does the registration fee depend on – 2% or 9%? It is quite simple. You will pay a 2% registration fee if you intend to take advantage of the Prima Casa tax benefit (read more about this benefit HERE). Otherwise, the registration fee will be 9%.
If you purchase real estate from a legal entity (for example, from a real estate developer), then you will have to pay the following taxes:
- VAT (either 4% or 10%. The basis for calculating this tax is the market value of the real estate object);
- registration fee (charged as a fixed amount of 200 euros);
- mortgage fee (charged as a fixed amount of 200 euros);
- cadastral fee (charged as a fixed amount of 200 euros).
(data as of January 2021, Decreto Legge n.104 del 12/09/2013)
What does the value of VAT depend on – either 4% or 10%? You will pay 4% VAT if you intend to take advantage of the Prima Casa tax benefit (read more about this benefit HERE).
Otherwise, the VAT payable will be 10%.
Payment of tax fees (registration, mortgage and cadastral) is made through a notary at the time of registering the contract of sale. Tax charges are already included in the notarial fee.
We hope that this article was useful to you. If you still have questions, our experts will be happy to assist!
