Lets talk Italian property purchase taxes.
Many websites containing details of the buying process in Italy advertise Italian property purchase taxes and fees as a percentage often between 10%&15%. This is relevant to only a few property sales and should not be used when you are budgeting for a property as this figure can be very inaccurate.
Let me explain why.
The catastale value
The current Italian property purchase taxes are 9% for non residents and 2% for residents, or those wishing to become residents within 18 months of the purchase. HOWEVER this tax is applied to the catastale value of the house NOT the purchase price. The catastale value is the value registered at the land registry office and could be as much as 80% lower than the purchase price (this high percentage rarely relates to cheaper properties). An example of this happened to one of our clients recently, they paid E150,000 for a property but their purchase tax (9%) was based on a value of just E29,000.
Your estate agents should be able to give you an idea of the taxes and fees due on a property just by looking at certain documents relating to the house.
Tax on Land
Tax on land is different to houses and is charged at, 15% for agricultural (with a minimum tax payment of E1000) and 9% for building land (known as Terreno Edificabile) of the value, irrespective of whether you are resident or not. Land in rural areas can be valued (for tax purposes) around E1 per square meter (in Abruzzo) but land such as building land can be much much higher (usually upwards of E25 per sqm)
Other fees may include estate agents fees which are usually 3% +IVA (VAT at 22%) and often with a minimum of E3000 +IVA. Notary fees, when we say Notary fees we usually include the taxes and all associated stamps/fees within this as the Notary is responsible to collect and pay all of these on your behalf. Notary fees are complex to work out because they include taxes, stamps, land registry and the actual Notary fee. You may also need a Geometra and a translator to be present, typically around E395 each.
A rough guide to calculate fees and Italian property purchase taxes
As said before your agent should be able to give you an idea of fees and taxes however the following can be used as an estimation. Please be aware that there are many variables that can change the fees below especially taxes (high catastale values and building land are two contributors to higher taxes)
Agents fees (min) E3000 +22% tax or 3% of purchase plus 22% IVA.
Actual Notary fees (no taxes etc) approx. between E1000 & E2500
Property tax 2% or 9% (depending if you will be resident) on the catastale value of the property. In most cases these taxes are based on a much lower value, as explained before.
Land tax (if applicable) 15% of the value (Agricultural land) with a minimum of E1000. In Abruzzo a rough guide to agricultural land E1-E1.50 per sqm value (for tax)
Various registration stamps, approx E1000.
Translations & Geometra fees approx E395 each.
Our 3 most recent sales had the following fees and taxes applied.
1. Detached property of approx 150sqm with land of 2000sqm (Agricultural). Purchase price E150,000 total of fees and taxes E9300 (Non resident)
2. Detached property land (agricultural) of 800 sqm and 1 outbuilding. Purchase price E112,000 total of fees and taxes E11,250.
3. Townhouse with garage no land. Non resident. Purchase price E55,000 all fees and taxes E7,750.
Due to many minimum fees when buying, many low price properties have a high percentage of fees & taxes.
Information correct at the time of publishing