Frequently Asked Questions – Italy
What documents do I need to buy a property in Italy?Apart from a valid passport, you need a codice ficale, your Italian tax code which is very straightforward to obtain from the local offices of the Ministerio Delle Finanze. It means you can give them money and they have no problem with that!
What is the process for buying property in Italy?
Firstly, once you have reached verbal agreement on a property purchase the compromesso or contratto preliminare di vendita is drawn up. This document sets out what has been agreed between buyer and seller and on signing the buyer pays a deposit, typically 10% of the agreed sale price, but it can be as much as 30%; the deal is now binding. The document states that the seller is required to sell the stated property at the stated price to you, the stated buyer, under the terms and conditions set out. It also binds the buyer to buy and if you change your mind you lose your deposit. If the seller backs out he is liable to pay you double the deposit. This acts as a great deterrent against gazumping and is taken very seriously by Italian sellers; once the contract is signed and the deposit transferred it is almost unheard of for anyone to back out. With The Property Finders on your side you can be sure that when selecting a property from those short-listed we will have thoroughly examined each one, giving you the confidence to sign the compromesso.
The second step is the signing of the rogito, the deed of sale, usually an atto publico, which is signed in the presence of a notary, when the outstanding balance of payment on the property is made and all necessary taxes and fees, e.g., the notary and estate agent, are settled. In January 2006, the law changed regarding the sale of residential property between private individuals, so the actual amount paid can be declared in the rogito, while the taxes due are calculated on revised cadastral values, in an attempt to reduce the amount of ‘black’ money in circulation. After signing the rogito, at which all parties have to be present or represented, and after all taxes due have been paid, the next step is to obtain a certificate from the Land Registry that declares the title has been registered. This is vital as registering you as the title holder protects you from any third party claims.
What taxes am I liable to pay to the Italian authorities when buying a property and does it make a difference if I become resident in Italy?
A summary of taxes due either as a non-resident or resident are shown in the table below, assuming the transaction is between two individuals. The taxes are calculated based on the value of the property as set by the Land Registry, not the amount paid.
Taxes for non-residents
Imposta di registro - 7%
Ipotecatria - 2%
Catastale - 1%
Total - 10%
Taxes for residents or someone who becomes resident within 18 months of signing the rogito:
Imposta di resgistro - 3%
Ipotecatria - €168
Catastale - €168
Total 3% + €336
N.B. If you fail to obtain residency within the 18 months you will be required to repay the discount.
Once I have bought a property what kind of annual costs do I need to budget for?
1. Imposta Comunale sugli Immobilil (ICI) – an annual council tax, usually paid in two stages, in June and December, on property owned by residents and non-residents alike. The actual rate is fixed by the local Comune or municipality and although it does vary, ICI is usually low.
2. Tassa Rifiuti (Rubbish Tax) – the local town or city hall decides the amount and when and how it’s paid, for example in 4 instalments through the year or perhaps it is included with the gas bill when the same company is responsible for both. It is based on the size of the property as, the thinking goes, the bigger your house the more you throw out.
3. Utility bills: gas electricity and telephone; if you are non-resident you will pay more for gas and electricity than residents but in the case of telephones, everyone pays the same rate. If you are only going to be in Italy from time to time on holiday, make sure you have arrangements in place to pay these bills in your absence.
Is it true that inheritance tax has been abolished?
In 2007, the Prodi government re-introduced the tassa di successione (inheritance tax) eliminated by Berlusconi. The rate depends on the relationship; direct inheritance for example, from grandparent to grandchild or parent to child, has a tax-free allowance up to €1,000,000, after which the tax is 4%, plus imposta ipotecaria and catastale taxes of 3%.
What abut Capital Gains Tax if I sell my property?
Since 2006, you are liable to CGT at a flat rate of 20% if you sell your property within five years.
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