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Italy’s tax system is complicated and buyers should seek advice from an expert before purchasing real estate.

Transaction and registration taxes

VAT on purchases of new property for primary residence is 4%. Newly-built holiday homes bought by non-residents have 10% VAT. For luxury second homes, VAT is 22%.

Buyers of pre-owned real estate in Italy pay a fixed registration tax of 2% for primary residences and 9% for second homes. There is no registration tax for new residential buildings (imposta di registro).

Other fees when buying property equal 2–4% of the estimated value of property. They include cadastral tax (imposta cadastrale), mortgage tax (imposta ipotecaria), filing and notary services. Notary fees are usually 1.0–2.5% of the property price and can reach €5,000–7,000 for property valued between €300,000 and €1M.

Transaction and registration expenses

New property Pre-owned property
Primary
residence
Second
home
Primary
residence
Second
home
Registration
fee
EUR 200 EUR 200 2% 9%
Cadastral tax EUR 200 EUR 200 EUR 50 EUR 50
Mortgage tax EUR 200 EUR 200 EUR 50 EUR 50
VAT 4% 10% or 22%
(for luxury property)

Ownership tax

In Italy, there is a unified communal real estate tax comprising three separate taxes: 0.76% municipal real estate tax (primary residences are exempt), waste removal and recycling and municipal tax on road maintenance, street lighting, etc. Total rates do not exceed 10.6%.

Income and corporate taxes

Income tax is charged on all revenue earned by a person including property rental income, minus expenses and deductions. For individuals, it is 23–43%, plus regional tax of up to 3.33% and municipal tax of 0.1–0.9%.

Income tax

Income,
EUR
Rates,
%
Under 15,000 23
15,000–28,000 27
28,000–55,000 38
55,000–75,000 41
Over 75,000 43

Corporate tax is 27.5 % and certain organisations are exempt such as charitable foundations, religious institutions and sports clubs.

Capital gains, inheritance and gift taxes

Capital gains tax is 20%. Properties owned for more than 5 years are exempt.

Inheritance and gift tax range from 4% to 8% depending on the degree of relation and value of property. Real estate transferred between spouses or to children, the value of which does not exceed €1M, is exempt from inheritance and gift tax.

Inheritance and gift taxes, %

For spouses and children,
real estate value exceeding
EUR 1,000,000
4
For brothers and sisters,
real estate value exceeding
EUR 100,000
6
For all other relatives,
irrespective
of the real estate value
For unrelated individuals
8

Disclaimer: the information in the above article is for reference and may be subject to change over time. Persons interested in exact calculations should contact a certified tax specialist in this country before purchasing property.