THE PAYMENTS WHEN YOU BUY A PROPERTY IN ITALY
What are the “costs to the purchaser” in Italy?
What taxes are payable for a property purchase in Italy?
When you buy a property in Italy, there are still some other expenses that need to be paid by the buyer, beside the payment of the agreed selling price. The applicable taxes, in force since 1 January 2014, are shown below:
*) THE DEPOSIT ‘CAPARRA’ WHEN BUYING A HOUSE IN ITALY:
To show evidence that you are really interested in purchasing a property, it is common practice to enclose a sum of money to the proposal contract as a deposit or down payment (caparra confirmatoria, art. 1385 of Italian Civil Law) by means of a non-negotiable cheque in favour of the vendor.
The deposit is usually between 5 to 10% of the agreed selling price, with a minimum of € 10.000,00. A higher amount is also allowed if both parties ruled in favour or if it has been requested.
This guaranteed cheque is kept by the real estate agent and will only be handed over once the vendor has accepted and signed the proposal himself. From that moment on, the contract is legally binding. In case the buyer has second thoughts and wants to pull out of the contract, the vendor may keep the whole amount of the down payment by way of compensation. Vice versa, should the vendor want to pull out, he must pay double the down payment received back to the buyer by way of compensation.
For the registration of a purchase proposal contract at the Tax Office (Agenzia delle Entrate) one needs to pay a fixed amount of € 200 per contract, € 200 for each suspensive and/or resolutive condition plus a revenue stamp of € 16 for every 4 pages and each attachment (with the exception of floor plans and designs for which a revenue stamp of € 1 needs to be paid). These costs are for the buyer and average between € 350 and € 550. The contract needs to be registered within 20 days after signing at the Tax Office (Agenzia delle Entrate).
*) THE EXTRA “COSTS TO THE PURCHASER” IN ITALY:
The fees that are associated with purchasing Italian real estate can be sub-divided into several different categories. Here I will explain the most common purchasers’ costs for an international buyer. In general, these costs are on average between 8% and 18% of the purchase price, for a non-residential buyer.
Approximately two weeks before signing the title deed, the notary will send the buyer a list of all costs and request that these charges must be transferred 5 days before signing at the notaries office, to the notary’s trust account. The notary will then pay all the different authorities and parties involved. These costs consist of the following:
A- Registration tax is 2 or 9% of the cadastral value:
If you are buying from private individuals, then the taxes you pay are based on the cadastral value. A nominal value which each property has, which depends on its size, location, etc – it has nothing to do with the market value. The minimum amount of this tax is € 1,000.
House price agreed to €100,000.
Property belongs to private sellers.
Cadastral value of the property €50,000.
1- Let’s say you intend on buying the house as a non-resident (you do not intend moving to Italy permanently and applying for residency):
Taxes payable are 9% on cadastral value €50,000 so €4,500 plus a few smaller fixed taxes.
2- Let’s say you intend on buying the house as a resident (you are intending to move to Italy permanently and applying for residency):
Taxes payable are 2% on cadastral value €50,000 so €1,000 plus a few smaller fixed taxes.
B- Notary fees:
Are approximately 1-2% of the purchasing price of the property + 22% VAT. The minimum fee of the notary is € 1,000 + 22% VAT.
C- Compromise/ Compromesso registration fees:
Approximate total of € 380 plus a partial payment of taxes, which will be deducted from the total taxes due once the process has reached completion.
In case the buyer has insufficient knowledge of the Italian language, the presence of a sworn interpreter is compulsory. The costs for a sworn interpreter with witnesses vary and are dependent of the hourly tariff and number of hours worked.
Approximately the costs are €1.000 – €1.350 for translation in the English language. Depending on the language the costs could be higher. The costs for the translator must be paid on the spot in cash, so make sure to bring the approximate amount to the notary. You will receive a cash invoice.
E- Technical report for the notary:
This work is carried out by a geometra, architect or engineer and costs vary considerably, our experience tells us a minimum of €760 + 22% VAT.
A geometra checks if there are any layout issues with the property, making sure it matches the official plans, whether no works have been carried out without permission from the municipality, gathers all previous permits, checks if the house is sellable and not illegally built in any way.
Please note this report is NOT a structural survey, that is an optional additional report you may wish to request. Costs for this vary.
F- Costs of transferring money to the trust account of the notary:
Trust accounts are operated by liberal professions, such as lawyers and notaries, who use them to handle their clients’ funds.
For example, a notary would deposit the sum of a property sale into their trust account and then send the money to the seller once the required verifications have been completed.
Notarial fees for the preparation of the buying sum are 0.5% of the selling price, costs are for the buyer. Once the deed transfer has gone through the notary will send the payable amount to the seller.
*) AGENT’S COMMISSION:
Once the deal is closed thanks to the intervention of the real estate agent, according to article 1755 Civil Code, he/she is entitled to a commission from the buyer. Approximately two weeks before signing the title deed, the agent will send the buyer an invoice and request that these charges be transferred to the bank account of the agency 5 days before signing the title of deed at the notary office.
HouseForSaleTuscany’s fee is 3.5% of the selling price plus 22% VAT with a minimum fee of € 4.500 + 22% vat.
*) THE PURCHASE PRICE OF THE PROPERTY:
This amount is minus the deposit ‘caparra’ amount that the buyer has already paid in advance. Approximately one to two weeks before signing the title deed, the notary will request the buyer to transfer the remaining purchase amount to the Trust account of the notary. This amount must be delivered to the Trust account at least 2 days before signing the title deed. The notary will then pay the seller(s), after the deed has been registered with the registration office. This can sometimes take up to 5 days until the seller receives the payment.
The information on this page is compiled with the greatest care; nevertheless, no rights may be derived from this information and optional attachments. We recommend that you check with the embassy in your country for the specifications and available information regarding your plans.