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Taxes on properties

Taxes when buying

A transaction on a property is subject to some taxes, all to be paid by the buyer, as it is the case with the notary fees. In the event of buying from an individual or from an enterprise other then a builder, the buyer will have to pay to the notary, or other public official acting as a tax collector on behalf of the State, 3 different types of taxes calculated on the price of the purchased property:
1.Stamp Duty ("Imposta di Registro"), 7% of the declared value stated in the deed of sale;
2.Land Registry fee, ("Imposta Ipotecaria") 2% of the same value;
3.Cadastral Fee ("Imposta Catastale"), 1%.
When purchasing a residential home from an individual, the taxes stated above shall be calculated on the basis of the cadastral value ("Valore Catastale") of the property (“price-value”); the cadastral value is a virtual figure associated to each plot or real estate property and typically falls in between 20 and 50% of the fair market value.

A big tax reduction is granted in case you are buying your first house in Italy (“prima casa”) and you intend to obtain residency ("residenza") there within 18 months: Stamp Duty ("Imposta di Registro") is lowered to 3% and for the others two taxes is to be paid a fixed amount of Euro 168 each. It is not possible to ask for the benefits for the first house when purchasing a luxury mansion.
When buying from a developer or a building company, stamp duty, land registry fee and cadastral fee will be applicable on a fixed total amount of Euro 504, while, on top of the property price, it shall be added a 10% VAT (4% for the first house).

Taxes on farmland total 18% of the market price, unless you register as a farmer. Taxes on buildable land are 11% of the market price.

Recurring taxes

• ICI (Council Tax on Property): possessors of a house are bound to pay the annual Council Tax on Property, with rates that vary from 4,5 to 7 per 1000 of the cadastral value (equivalent to the minimum value to declare in the deed of transfer). Residents pay ICI in 2 instalments, in June and December, non residents have to pay it in 1 instalment before 20 December.
• Waste Tax ("Tassa rifiuti"): to be paid annually to the Municipality where you set your residency.
• IRPEF (Income Tax): properties you own are to be inserted in the tax declaration form for individuals whose presentation is compulsory for those who produce earnings in Italy. The income tax rates increase progressively according to the total income and range from 23% to 45%. Revenues originating from properties should be inserted in a special section of the tax declaration form - revenues from houses and revenues from land. For houses, it is necessary to highlight different situations:
• if the house is rented out, you should declare the annual proceeds from the let, with a tax deduction of 15%;
• if the house is used as your residency ("residenza"), you should not report any revenue;
• in any other case, you are supposed to fill in the cadastral virtual income ("Rendita Catastale", the basis to calculate "Valore Catastale"), with an addition of 1/3 for the second house.

Tax on capital gains from property sales

An individual who reaps a capital gain from the disposal of a building is due to report this gain in the income tax form if the sale has happened less than 5 years from the purchase; as an exception to this rule, no taxes are due for capital gains on houses used as the permanent residency for the greater part of the time elapsed between purchase and sale. Capital gains on properties acquired via donation or heritage are not subject to income taxes.