Taxes when buying property in Italy – what do you need to know?

The decision to purchase a property in Italy should be preceded by an analysis of the tax costs. Taxes in Italy vary significantly depending on the type of seller and the intended use of the unit.

Taxation when buying from a private individual

If you buy a property from a natural person, the main cost will be the registration tax (Imposta di Registro), calculated on the cadastral value of the property.

• The “Prima Casa” relief: If you plan to establish residence in the property, the rate is only 2%.
• Purchase as a holiday home: For non-residents, the registration tax rate is 9%.

Buying a property from a company or developer

In the case of a purchase from an entity subject to VAT, VAT (IVA) is paid instead of registration tax. The standard rate for a first home is 4%, and for subsequent properties usually 10%.

Additional transaction costs

Apart from the main taxes, one should bear in mind the fixed duties (mortgage and cadastral), the notary’s fee, and the costs of sworn translations, if required.