Are you planning to stay in Italy long term, live in Dolce Vita or buy a house as an investment?
Italy is full of opportunities both in the tourism sector and in many rising cities. The real estate sector is particularly dynamic in the cities with a lot of universities such as Milan, Turin, Bologna, Trent and Bolzen to mention a few. However many are willing to bet on the southern regions such as Sicily and Reggio Calabria, where the tourism industry is steadily rising, and many great deals can still be made.
Real estate auctions are also very popular in the big cities and many opportunities can be found here. Nonetheless, consider that the starting price of the auction may differ a lot from the final price of the house, when it is bought.
Whatever your intentions are, there are many costs, taxes and hidden fees to take into considerations when buying a house in Italy.
Behind many so called “real estate deals” there could be many laws, rules and hidden fees you should be aware of.
If you want an extensive overview of the taxes you should pay when owning a property in Italy check our article about property tax in Italy.
1. The essential Taxes
These are the taxes that you pay more or less in every property purchase in Italy.
The second tip is to look carefully at what is the cadastral value of the property, as many properties in Italy are quite old and their value on the market is not updated yet. Many times the cadastral value is set in the deed of sale of the house, and therefore it does not change when the property has the same owner for years.
The third tip is that if your house has not finished, or it is a development project, you don’t need to pay any stamp duty.
2. Land registry Tax
The land registry tax, or “imposta catastale” in Italian, is the tax due when a house or a property changes its owner in the cadastral lists of the government.
3. The Mortgage Tax
The mortgage tax or in Italian “imposta ipotecaria” is also a fixed tax.
4. The VAT Tax
The vat tax or “IVA” in Italian is due also on properties’ purchases.
5. Marca da bollo
This tax is due in Italy in every contract but it is not that high. “Marca da bollo” or simply “bollo” is a stamp that you can buy from a local corner shop.
In general is 2% for the invoice or receipt over 77€.
In case you go through with your decision, you will pay 16€ for the notary’s documents (see below) or other public administration contract.
2. Law Taxes
To validate your contract and control that the transaction is proceeding according to law, you should get in contact with a notary, or notaio. Usually the seller chooses the person to contact.
In his presence you will sign the deed of sale (see section below).
He will give copies of the contract to the tax office and land registry institution, informing the local police of the change of ownership.
3. Intermediation fee
In general they always ask between 1% and 5% of the property’s value, but it depends from city to city, and from company to company.2. Other intermediation costs
If you are buying an office, a warehouse or a storage area, keep in mind that changing its purpose of use, may not be so easy. To be 100% law compliant, you will need to fill many documents and present to the municipality where the property is located.
They may as well refuse your demand and sometimes you will need to go through expensive restorations’ works.
4. Construction costs: essential info
When buying a new house, or a house that has not inhabited since a long time, you will need to pay the costs for “allacciamenti”, or connections, referring to the connections of gas and electricity supply.
These are costs that often you cannot avoid.
For the rest, make sure to have an estimate by the seller regarding the renewal or restoration costs of the house you are going to buy.
It may be convenient to have a final consultation from a civil engineer in order to check the plans of the house and its condition, especially if the house is old.
5. Signing a contract
Have you asked all the info you need to the seller? Have you asked for all the information about these taxes and costs? Do you know what is going to be the final price of your purchase?
Then you are ready to buy your first house in Italy.
In general the process is divided into three steps but it can vary according to real estate agencies or deals made.
At this stage in general, you will also pay the agency fees.
If the seller decides to leave the process, according to the Italian law, it may be liable to pay double of what has been given as deposit.
As well as the payment amount to be paid at stage one and two of the process, can be discussed.
We hope this article has been useful and you are finally ready to buy your first house in Italy.
If you want to study further topic check out our guidebook to buy a house in Italy.
Want to read more? Check out also our articles about filing your taxes in Italy, or airbnb taxes in Italy, or our guide for retiring in Italy.
After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.