Taxes on properties
Taxes when buying
A transaction on a property is subject to some taxes, all to be paid by the buyer, as it
is the case with the notary fees. In the event of buying from an individual or from an enterprise
other then a builder, the buyer will have to pay to the notary, or other public official
acting as a tax collector on behalf of the State, 3 different types of taxes calculated
on the declared value of the purchased property:
1.Stamp Duty ("Imposta di Registro"), 7% of the declared value stated in the
deed of sale;
2.Land Registry fee, ("Imposta Ipotecaria") 2% of the same value;
3.Cadastral Fee ("Imposta Catastale"), 1%.
A big tax reduction is granted in case you are buying your first house in Italy and you
intend to obtain residency ("residenza") there within 18 months: Stamp Duty ("Imposta
di Registro") is lowered to 3% and for the others two taxes is to be paid a fixed amount
of Euro 129,11 each.
Please bear in mind that the minimum value to declare in the deed of sale, in order no to
incur in fiscal assessments by the State, is a function of the cadastral value ("Valore
Catastale") associated to the property and typically falls in between 20 and 50% of
the fair market value.
Taxes on farmland are much higher, totalling 18% of the declared value, unless you register
as a farmer.
The purchase of a property in Italy is particularly favourable
in the prospect of transferring it to the heirs. The succession
tax has been abolished in Italy since 2001: currently, for a property
transferred via a hereditary succession, the heirs are asked to
pay only the Land Registry fee and the cadastral fee, 3% in total,
reduced to 129,11 Euro each in the case of first house.
Recurring taxes
- ICI (Council Tax on Property): possessors of a house are bound to pay the annual Council
Tax on Property, with rates that vary from 4,5 to 7 per 1000 of the cadastral value (equivalent
to the minimum value to declare in the deed of transfer). Residents pay ICI in 2 instalments,
in June and December, non residents have to pay it in 1 instalment before 20 December.
- Waste Tax ("Tassa rifiuti"): to be paid annually to the Municipality where
you set your residency.
- IRPEF (Income Tax): properties you own are to be inserted in the tax declaration form
for individuals whose presentation is compulsory for those who produce earnings in Italy.
The income tax rates increase progressively according to the total income and range from
23% to 45%. Revenues originating from properties should be inserted in a special section
of the tax declaration form - revenues from houses and revenues from land. For houses,
it is necessary to highlight different situations:
- if the house is rented out, you should declare the annual proceeds from the let,
with a tax deduction of 15%;
- if the house is used as your residency ("residenza"), you should not report
any revenue;
- in any other case, you are supposed to fill in the cadastral virtual income ("Rendita
Catastale", the basis to calculate "Valore Catastale"), with an addition
of 1/3 for the second house.
Tax on capital gains from property sales
An individual who reaps a capital gain from the disposal of a building is due to report
this gain in the income tax form if the sale has happened less than 5 years from the purchase;
as an exception to this rule, no taxes are due for capital gains on houses used as the permanent
residency for the greater part of the time elapsed between purchase and sale. Capital gains
on properties acquired via donation or heritage are not subject to income taxes.
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