What taxes and fees are involved in buying a home in Italy?

What are the real estate taxes, notary fees, and legal costs involved in buying property in Italy?

When buying a home in Italy, several taxes and fees are involved in the process. These can vary based on factors like the type of property, the buyer’s residency status, and whether it’s a first or second home. Here's a breakdown of the main taxes and fees you should consider:

1. Purchase Taxes

The type of property (new or existing), the buyer's residency status, and whether the home is a primary or secondary residence will influence the taxes.

A. For Residents/First-Time Buyers

• Registration Tax (Imposta di Registro):
• Primary Residence (First Home): 2% of the cadastral value of the property (usually lower than market value).
• Second Home: 9% of the cadastral value.
• Value-Added Tax (VAT/IVA):
• Not applicable for most sales of existing homes, but if buying a new home directly from a developer:
  • Primary Residence: 4% of the purchase price.
  • Second Home: 10% of the purchase price.

B. For Non-Residents

• Registration Tax:
• Primary Residence: 2% of the cadastral value if you plan to move to Italy within 18 months of purchase.
• Second Home: 9% of the cadastral value if you do not intend to live in the property.
• VAT (IVA):
• For new properties from a developer:
  • 4% for a primary residence.
  • 10% for a second home.

C. Luxury Properties

• Registration Tax: 9% of the cadastral value.
• VAT: 22% of the purchase price for luxury homes (classified as A1, A8, or A9).

2. Additional Fees

• Cadastral Tax (Imposta Catastale):
• For a first home: A fixed fee of €50.
• For a second home: €100.
• Mortgage Tax (Imposta Ipotecaria):
• For a first home: A fixed fee of €50.
• For a second home: €100.

3. Notary Fees

• Notary Fees (Honorario del Notaio): A notary is essential in Italy for real estate transactions. The fee typically ranges between 1% and 2% of the purchase price. It can vary based on the complexity of the transaction and the value of the property.

4. Legal and Administrative Fees

• Lawyer Fees: Hiring a lawyer isn't mandatory but is recommended for foreign buyers. Legal fees range from 1% to 3% of the purchase price.
• Agency Fees: If you use a real estate agent, the commission is usually 3% to 5% of the purchase price, plus VAT at 22%.

5. Ongoing Property Taxes

• IMU (Imposta Municipale Unica): This is a local property tax levied on second homes. First homes are generally exempt unless they fall under luxury property classifications.
• The rate varies by municipality and is generally 0.4% to 0.76% of the cadastral value.
• TASI (Tributo per i Servizi Indivisibili): A tax for local services (lighting, maintenance). This is usually shared between the owner and tenant, ranging from 0.1% to 0.25% of the cadastral value.
• TARI (Tassa sui Rifiuti): A waste tax based on the size of the property and the number of occupants.

6. Other Costs

• Survey/Valuation Fees: If you choose to have the property surveyed, this could cost €300 to €700.
• Bank Fees: If taking out a mortgage, banks may charge a mortgage setup fee and appraisal fee, typically ranging from 0.5% to 1% of the loan amount.

Understanding these taxes and fees is essential for planning your home purchase in Italy and managing your budget effectively. If you need assistance or want to find a property that is valuable and in a great location, please contact us: ItalicaHomes