Costs of Buying a House in Italy

How to calculate taxed and costs of buying a house in Italy – Closing costs.

Costs of buying a house in Italy are commonly based on the value of a property declared in at the cadastral office.

This value is very often lower that the purchase price, and it is also lower than the market value.

Since many properties in Italy do not update their tax value (“rendita catastale”) for long time, you can easily incur in fines if you pay taxes based on a wrong cadastral income.

This happens when a property has the same owner for long time, and the cadastral value is set in the deed of sale of the house.

However, if the buyer is a company, taxes are calculated on the commercial price of a property, therefore the cadastral value in this case does not apply.

What Property Taxes do you have to pay in Italy?

The main Italian real estate taxes are the following:

Stump Duty: The transfer is subject to registration taxes.

These are 2% or 9% to be calculated on the cadastral value.

The minimum amount to pay is € 1,000.00.

Taxes involved when buying a house:

• If you are a first-time homebuyer (meaning that you are going to live in Italy for more than 6 months per year), and
• If you are buying from a private seller,

Registration tax will be calculated on 2% of the cadastral value of the property.

• If you are not purchasing with the above benefit (meaning that you are living in Italy for less than 6 months in a year, or you own another property in Italy)

Registration tax will be calculated on 9% of the cadastral value of the property.

Taxes involved when buying a land:

• 15% for purchases of agricultural lands by not farmers or agriculture entrepreneurs.
• 9% for purchases of non-agricultural lands.

Cadastral Tax (Imposta Catastale): 50€

Mortgage Tax (Imposta Ipotecaria): 50€

Notary Fees

The buyer usually choses the Notary who will prepare the bill of sale. The buyer pays Notary’s fees.

Notary’s fees may vary depending on many factors, although Italian law states a maximum amount that they can charge for each service.

Fees are usually €1,000 to €2,000 for a property costing €50,000 and higher then €3,000 for a property costing €500,000 plus possible fees for other services.

Legal Fees

The work performed by a lawyer during the process of buying property in Italy is not standard and legal fees usually charge from 1 to 2 per cent of the property price. This depends on each lawyer, and work performed. We have drafted a clearer scheme in this article.

Utility Costs of Buying a House in Italy

You probably did not take into consideration costs for gas, electricity, and water connections. It is good for you to ask the seller to put in writing possible costs due to these services.

Condominium costs 

When buying a property in a condominium, be aware of monthly costs. These may increase depending on several factors, such as: number of properties in a building, doorman costs, elevator, etc. You should also ask the builder or developer to provide you with those costs.

Currency Exchange

You need to use a currency specialist when buying a house in Italy, since currency exchange rates can negatively affect your international payment. Luxury Law can help you save money thanks to a long experience with foreign buyers in Italy.

Italian to English translator

If you are not Italian speaker, within the costs of buying a home in Italy you need to add a sworn interpreter. Be aware that this is compulsory.

This needs to be a sworn translator, not just someone who speaks both languages. The costs for a sworn translator with witnesses depend on their hourly tariff and hours spent.

If you have engaged a lawyer, you can save this cost by signing a Power of Attorney in favor of the attorney who will represent you before the Notary. Your Italian attorney will sign the deed on your behalf, and costs are generally lower than engaging an interpreter.

Travel expenses

If you have decided to be present during the final deed of sale, you obviously need to calculate this further cost.

If you instruct a lawyer to sign on your behalf costs depend on your attorney’s fee. A power of attorney might cost between 300 to 500 euros, not more.

During Covid-19, but even before, Luxury Law’s lawyers have signed several deeds on behalf of their clients, also due to the difficulties in moving from a country to another due to the pandemic.

Agency Fee

The agency fee is between 2% and 4% of the purchasing price plus 22% VAT. You will save this costs if buying through a private.

Further costs of buying a house in Italy

Furthermore, there are some additional costs of buying a house in Italy, which you need to budget for. These include: surveyors and geometra or architect fees.

Do you have any other queries as below or questions you did not find the answer in this article? Please contact Luxury Law. We will provide you with all necessary clarification.

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Please feel free to contact us!