PROPERTY OWNERSHIP RUNNING COSTS:
1) Acquisition Expenses
The overall expenses associated with purchasing a property in Italy typically range from 10 to 20 percent of the property’s purchase price, although this can vary depending on the circumstances.
• Agent’s Commission
Our commission fees for buying clients start at a minimum of €3,000.00 plus 22% VAT (if applicable) for properties valued up to €75,000.00. For properties priced above this threshold, the fee is calculated as a percentage, beginning at 4% plus VAT.
Certain properties are listed in partnership with esteemed local real estate agents, where our compensation is based on the terms of our agreement with them. We carefully choose our partner agents for their dependability, professionalism, and extensive expertise, ensuring top-quality service at competitive rates.
• Stamp Duty (Imposta di Registro) – Land Registry Tax (Imposta Ipotecaria) – Cadastral Tax (Imposta Catastale)
These three taxes are essential payments when purchasing a property in Italy, in addition to various minor taxes.
The “cadastral declared value” stated in the property’s deed of sale (Rogito) typically serves as the basis for calculating these three taxes. This value may significantly differ from the property’s market value, as it is based on outdated appraisals. However, the government is currently updating these values. It’s important to note that the “rule of the cadastral value” may not always apply; for instance, if the property is purchased by a company rather than an individual, the taxes are calculated based on the commercial price of the property.
The applicable fees vary depending on the property type and the individual characteristics of both the seller and the buyer:
ACQUISITION OF RESIDENTIAL PROPERTIES AND RELATED FACILITIES (e.g., garages, warehouses):
For the purchase of a primary residence (to be used within 18 months) from a private seller:
– Registry tax: 2% (with a minimum of € 1000; based on the cadastral value)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
For the purchase of a secondary residence from a private seller:
– Registry tax: 9% (with a minimum of € 1000; based on the cadastral value)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
For the purchase of a primary residence (to be used within 18 months) from a construction company (or restructuring company) within 5 years from completion of work:
– VAT: 4% (based on the declared taxable value in the deeds)
– Registry tax: € 200 (fixed amount)
– Mortgage tax: € 200 (fixed amount)
– Land registry tax: € 200 (fixed amount)
For the purchase of a secondary residence from a construction company (or restructuring company) within 5 years from completion of work:
– VAT: 10% (based on the declared taxable value in the deeds)
– Registry tax: € 200 (fixed amount)
– Mortgage tax: € 200 (fixed amount)
– Land registry tax: € 200 (fixed amount)
For the purchase of a historic or artistic building from a private seller (not considered a primary residence):
– Registry tax: 9% (with a minimum of € 1000; based on the cadastral value)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
ACQUISITION OF PROPERTIES IN CATASTAL CATEGORIES B, C, D, E, and A/10 (e.g., offices, shops, warehouses, etc.)
For the purchase of offices, shops, warehouses, etc., from a private seller:
– Registry tax: 9% (with a minimum of € 1000; based on the declared value in the deeds)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
Purchasing an office, shop, warehouse, etc., from a construction company (or restructuring company) within 5 years from completion of work entails the following charges:
– VAT: 22% (based on the declared value in the deeds)
– Mortgage tax: 3% (minimum € 200; based on the declared value in the deeds)
– Land registry tax: 1% (minimum € 200; based on the declared value in the deeds)
If buying an office from and selling to a private non-profit organization, the charges are as follows:
– Registry tax: 9% (with a minimum of € 1000; based on the cadastral value)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
For the acquisition of building land:
– Buying from a private seller:
– Registry tax: 9% (with a minimum of € 1000; based on the declared value in the deeds)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
– Buying from a company:
– VAT: 22% (based on the declared value in the deeds)
– Registry tax: € 200 (fixed amount)
– Mortgage tax: € 200 (fixed amount)
– Land registry tax: € 200 (fixed amount)
For purchasing agricultural lands:
– Buying from a private or company seller:
– Registry tax: 15% (with a minimum of € 1000; based on the declared value in the deeds)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
– Buying from a private or company seller by farmers and agricultural entrepreneurs professional (PPC and IAP) with no incentives:
– Registry tax: 9% (with a minimum of € 1000; based on the declared value in the deeds)
– Mortgage tax: € 50 (fixed amount)
– Land registry tax: € 50 (fixed amount)
– Buying from a private or company seller by farmers and agricultural entrepreneurs professional (PPC and IAP) with incentives PPC:
– Registry tax: € 200 (fixed amount)
– Mortgage tax: € 200 (fixed amount)
– Land registry tax: 1% (based on the declared value in the deeds)
• Notary Fee
A fee is charged to the Notary for the preparation of the Rogito, and typically, only the buyer covers the notary expenses and taxes payable to the notary as a public official. However, it’s important to note that notary fees may also be applicable for the preparation of the preliminary agreement of sale (not just for the deed) if the involved parties opt to have the compromesso drafted by the notary to register a certified copy of the deed with the Land Registry.
The fee may slightly fluctuate from one municipality to another and is determined based on a scale linked to the declared value of the property, the complexity of the deed, and the property itself. Nonetheless, notary fees maintain a similar structure across different cities, at least within the framework of the notarial system. For example, a notary’s office in the heart of Catania might impose higher fees compared to one situated in a rural area, primarily due to higher operating costs in urban centers as opposed to smaller villages. However, the notarial rate itself typically remains consistent.
Example for purchasing a house priced at €200,000 from a private seller (not a company), with a cadastral value of €98,000 (no obligation to reside in the house):
Real Estate Fee (calculated on €200,000) = Approximately €8,000 (4% + VAT 22%)
Notary Fee (calculated on €200,000) = Approximately €2,800
Tax (calculated on €98,000) = Approximately €8,920 (9% + €50 + €50)
Total Amount = Approximately €19,720
For instance, if purchasing a house priced at €200,000 from a private seller (not a company), with a cadastral value of €98,000, and buying as a first house (residence established within 18 months of purchase, with no other properties owned in Italy):
Real Estate Fee (calculated on €200,000) = Approximately €8,000 (4% + VAT 22%)
Notary Fee (calculated on €200,000) = Approximately €2,800
Tax (calculated on €98,000) = Approximately €2,060 (2% + €50 + €50)
Total Amount = Approximately €12,860
• Other fees:
They may include the help of a lawyer for legal issues; a surveyor or an architect for the property inspection; a translator and a moving company. Also, consider mortgage fees in case you need to establish a loan.
2) Annual Property Ownership Taxes
• IMU (Imposta Municipale Unica): IMU is not levied on primary residences unless they are considered luxury homes. It is calculated based on the cadastral value of the property plus a 5% revaluation, multiplied by the cadastral coefficient. The resulting amount is then multiplied by the tax rate, which may be adjusted by each municipality by up to 0.3%.
• TARI (Tassa sui Rifiuti): TARI, or refuse/garbage tax, applies to all property owners, whether residents or non-residents. The tax is primarily determined by factors such as property size, the number of occupants, and property type. The municipality (comune) where the property is located issues an annual notification for payment, which can be settled as a lump sum or in three installments. If the property is rented out long-term, the tenant is responsible for paying TARI. Certain reductions or exemptions may apply, depending on specific circumstances. We recommend verifying the precise tax rates applied by each municipality, as they may differ based on location and other factors, including new regulations.
Utilities: Electricity, water, gas/oil for heating, and phone services typically incur a small fixed fee every two months, along with charges for actual usage.
Condominium Expenses: If the property is part of a condominium with shared areas such as gardens, driveways, pools, or tennis courts, owners are required to contribute to condominium expenses. The amount varies depending on the size and type of shared facilities.
3) Visas
If your stay in Italy extends beyond three months, you will be considered a resident and will need a residency permit. Non-EU citizens are required to apply for a “permit to stay” or Permesso di Soggiorno alongside their visa, while EU citizens must obtain a Certificato di Residenza.
Various visa options are available, and it’s essential to select the appropriate one. You can find detailed information on the types of visas on the Italian Foreign Ministry’s website. These visa categories include:
– Long-stay visa (also referred to as the national visa/D-Visa), which necessitates obtaining an Italian residence permit upon entry to authorize a stay longer than 90 days.
– Work visas
– Student visas
– Family visas
– Self-employed visas (for entrepreneurs seeking to establish a business)
– Retirement visas
– Elective residency (suitable for individuals with significant assets or income)
Certain visas may mandate obtaining an Italian residence permit upon arrival in Italy. If your stay exceeds three months, you must apply for this permit at the nearest town hall (Comune – Ufficio Anagrafe).
– Investor Visa
The Investor Visa for Italy offers a 2-year visa option for non-EU citizens who opt to invest in strategic assets beneficial for Italy’s economy and society.
How to Apply?
To secure your investor visa, you must initially obtain a Nulla Osta (certificate of no impediment) online from the Investor Visa for Italian Committee (IV4I). Following this, applicants can visit the Italian Representative Office in their country of residence to apply for a 2-year investor visa. As of May 2020, the minimum investment requirement to qualify for an investor visa is 250,000 Euros.
Eligibility Criteria
Individuals of any nationality who transfer their tax residency to Italy can apply. They must not have been Italian residents for at least nine of the last ten years.
Visa for Investors and Tax Incentives
The 2017 Budget Law introduced a new “entry visa for investors” offering foreign investors favorable treatment, provided they make a substantial investment in Italy or a significant donation benefiting Italian culture and research.
In line with the decree-law of May 19, 2020, n. 34, the minimum investment threshold in the capital of an ordinary company decreased from EUR 1,000,000 to 500,000, and from EUR 500,000 to 250,000 in the capital of an innovative startup.
Investors and Corporate Golden Donors aiming to conduct business activities in Italy can enter and stay in the country initially for two years, with the possibility of a three-year extension. The visa extension also applies to family members.
Furthermore, relocating fiscal residence to Italy offers a favorable tax break on income earned abroad, applicable for a fifteen-year duration. In 2019, the Italian Government enacted The Growth Act, providing a ten-year tax reduction for non-EU entrepreneurs and investors willing to invest and work in Italy.
Italy initiated efforts in July 2020 to attract foreign retirees seeking a retirement destination outside their home country. By granting significant tax reductions on all foreign-generated income, including pensions, real estate income, equity profits, annuities, etc., at a tax rate of 7% for ten years.