Property Transfer Taxes

The famous quote “Nothing is this word is certain except death and taxes” is attributed to Benjamin Franklin, one of the founding fathers of the United States.

It’s no surprise to learn that property transfer transactions in Italy also come with an array of fees, taxes and duties.

Let’s take a look at some of the typical taxes you may encounter:

1. Stamp Duty/Registration Tax

The most substantial tax is the registration tax – imposta di registro – which is charged at a rate of 9% (with a minimum of 1,000 euros) for properties exchanging hands between a private buyer and seller.

The rate of stamp duty can be lowered to 2% if the property being purchased is to be used as the primary residence or “prima casa“.

2. Mortgage and Cadastral Tax

These taxes – imposta ipotecaria and imposta catastale – are charged at a fixed amount of 50 euros if buying from a private seller or 200 euros if buying from a business.

3. Municipal Property Tax

The imposta municipale unica (IMU) applies to owners of second homes in Italy or primary residences classed as luxury.

Rates vary between 0.76% and 1.14% of the taxable base.

4. Capital Gains Tax

Sellers of Italian property may be hit with capital gains tax – imposta sulle plusvalenze – if they sell within five years, charged at a rate of 26%.

5. Value Added Tax

Where properties are purchased from a business, VAT is charged at 10% or at the higher rate of 22% for luxury properties in categories A/1, A/8 and A/9.

6. Other Taxes

Notary fees, legal fees, estate agent fees, surveyor fees and waste removal charges will all be added to the final bill to varying extents so it’s worth factoring these into the overall purchase price.

Final comments

It’s worth checking online to make sure that the rates of taxation have not changed for better or worse. As ever with high-value transactions, it is highly recommended to seek proper legal advice before committing to a property purchase.

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