Buying property in Italy: a guide to taxes and fees

Italy is, without exaggeration, a country that has everything. Beach holidays near warm clear seas and ski resorts, a rich cultural heritage and a developed fashion and shopping industry. Also delicious food and the best wine. What else does a person need to be happy?

But if you are planning not just to walk around Venice and relax on the beach in Rimini, but to move for a long time or invest in local real estate, it will be useful to know what additional costs await the investor

If both the buyer and the seller are two natural persons (as opposed to a company) and the object of sale is a property for residential purposes, the property tax is based on the ‘declared’ value of the property in the 'rendita catastale' (official property record) which is generally less than the actual purchase price or its market value, sometimes much less.

There is a tax calculation formula which is dictated by the Italian state and applied to the rendita catastale in order to determine the taxable value. Once this value has been determined then the percentage of tax on that value depends on the residence status of the buyer. If the buyer is planning on being a resident in Italy and making the property their primary residence within eighteen months of the purchase then the tax is 2% on the cadastral value. If the property is to be used as a second home then the tax is 9%. 

Notary’s fees depend on the price of a property and the complexity of the contract. Included in the notary fees are additional small tax duties that the notary is obligated to pay on your behalf. In addition, there are copying fees, filing fees and translation fees. 

All of the fees are itemized on the bill by the notary so that you can better understand the costs. Generally speaking, notary's fees for a property purchase can be anywhere from around 800 euros to 5 000 euros.

Annual Property tax to the Commune This tax is paid to the commune where the property is located. The Italian state determines the tax formula for each individual commune. The information is detailed on the Rendita Catastale (official property record). If you are a resident or plan on becoming a resident within the first 18 months of the sale and the house is not zoned as a luxury residence and will be used as your primary residence, then there is no annual tax.

 If the property is zoned as a luxury residence (A1, A8, or A9) and it is your primary residence then you pay 60% of the annual tax. If the property is a second home then you pay the full tax amount. You can ask your real estate agent to find out the amount of IMU if any.

If you don't speak Italian then it is necessary that the final act of sale, be translated into your language by an official licensed translator.

In addition to this, you may need a live translator present during the Atto Notarile. Often the notary will arrange a translator for you and the costs will be included in the notary fees.

Real estate agencies generally take a commission of between 3% and 5% of the selling price of the property, 4% being the most common. 

You will also need to pay IVA (sales tax) which is 22% on the commission.