Property purchase costs in Italy

What are the costs of buying a property in Italy? 

The main costs when purchasing a property in Italy are notary fees, taxes, and estate agent commission – and collectively they do not make it the cheapest place in Europe. Allow 10 to 20 per cent of the purchase price for fees, taxes, and costs.

This includes notary fees of between one and 1.5 per cent, depending on the area, the value of the property, and the rates charged by the individual notary. Non-Italian speakers will also have to pay for a certified translator when it comes to the final contract. Buyers using an Italian loan or mortgage must pay for the “atto di mutuo” (mortgage contract) to be registered by a notary.

Both buyer and seller pay estate agent commission, usually two to three percent of the real value, not the book value, plus VAT (IVA) of 20 per cent. Land registry taxes, the “cadastral” tax, plus 20 per cent IVA on the legal fees are also factored into the overall figure. Purchase taxes depend on whether you are buying a first or second home and whether you are buying from a company rather than from a private seller.

What taxes do you pay when buying a house in Italy?

For old properties, registration tax is 3% for those buying their main home, and it must not be classified as a “luxury” home. The registration tax for non-residents and those buying second homes is 7%, so if you’re planning to become a resident in Italy, do so 18 months before buying your home.

The tax is calculated on the declared value of the property and not on the purchase price. For new properties, taxes also depend on who the property is purchased from. If the property is purchased through a developer/company, IVA/VAT is to be paid and no registration taxes are due. If the property is purchased through a private individual, property registration tax is to be paid and no IVA/VAT is due.

IVA/VAT rates

IVA/VAT ranges from 4% to 22%. This is 4% for first-home resident buyers, 10% for second-home and non-resident buyers, and 22% on luxury homes. New properties are defined as those dwellings sold within five years of completion of construction or restoration. VAT rates have been frozen at the above rates until 2022.