FAQ about buying real estate in Italy

Buying property in the Lake Como area

• Price per square meter in the city center 4,750 €
• Price per square meter outside the center 2,833 €

Rent

• One-bedroom apartment in the city center 825€
• One-bedroom apartment outside the city center 566 €
• 3 bedrooms apartment in the city center 1,633 €
• 3 bedrooms apartment  outside the city center 937 €

Buying property in Florence

• Price per square meter in the city center 5,340 €
• Price per square meter outside the center 3,358 €

Rent

• One-bedroom apartment in the city center 833 €
• One-bedroom apartment outside the city center 627 €
• 3 bedroom Apartment in the city center 1,665 €
• 3 bedroom apartment outside the city center 1,038 €

Tax on the purchase of real estate (L'imposta di Registro)

If both the buyer and the seller are two individuals and the item being sold is a residential property, then the buyer must pay tax to a government agency.

Real estate purchase tax is calculated on the basis of the cadastral value of the property, which is usually less than the actual purchase price or its market value.

There is a tax calculation formula to determine the taxable base.

The tax percentage depends on the status of the buyer: resident in Italy or non-resident.

If the buyer plans to become a resident of Italy and make the property his main residence within 18 months from the date of purchase, then the tax is 2% of the cadastral value.

If the property is to be used as a "second home", then the tax is 9%.

Typically, your real estate agent will tell you the amount of tax due.

VAT (value added tax): only for new buildings (the seller is a legal entity)

Buyers of new buildings are exempt from paying the L'Imposta di Registro tax, instead they pay VAT - Imposta sul Valore Aggiunto (Value Added Tax) on the actual sale price of the property.

For buyers who will use the property as their primary residence, the tax is 4%, for non-resident buyers and those who will use the property as a second home, the tax is 10%.

If the property belongs to the elite category (code A1, A8 or A9) VAT will be 22%.

The cost of notary services

The notary's fee depends on the value of the property and the complexity of the contract of sale. The cost of notary services also includes tax fees, which the notary is obliged to pay on behalf of the buyer.

As a rule, notarial services for the purchase of real estate range from 800 to 5,000 euros.

Annual property tax - Imposta Municipale Unica (IMU)

Real estate tax is paid to the local government - "commune", at the location. According to Italian law, local authorities can independently set the amount of tax.

If you are a resident of a "commune" or plan to become a resident within the first 18 months of purchasing the property, and the house is not a luxury property and will be used as your primary residence, then there is no annual tax.

If the property is a luxury residence (code A1, A8 or A9) and is your main residence, you pay 60% tax.

If the property is a "second home", you pay the full amount of the tax.

The cost of interpreter services

If the buyer does not speak Italian, according to Italian law, the "notarial deed" must be translated into his native language by a licensed translator. In addition, the presence of an interpreter may be required during the notarization.

Often the notary will recommend a trusted translator, and the cost of translation services will be included in the notary's estimate.

Real estate agency commission

Real estate agencies usually charge a commission of 3% to 5% on the actual sale price of the property, the most common being a commission of 4% plus 22% VAT.

• The applicant and his family members are not required to take language proficiency exams or invest in the country's economy. It is enough to have regular passive income.
• Travel without visas in the Schengen countries.

• After 10 years, you can apply for Italian citizenship.
• A residence permit makes it possible to obtain a privilege for the purchase of the first real estate, simplifies access to obtaining loans from local banks, and allows you to register a car as a property.

• The applicant must not be absent from the country for more than six months in a row, otherwise he may be denied an extension of the residence permit
• The applicant pays taxes in Italy on worldwide income

• The applicant is limited in employment and doing business in Italy, but can receive passive income from the rental of real estate

Taking into account taxes, utilities and insurance, property maintenance in Italy costs 1-3% of the property’s market value per year.

Currently, there is no capital gains tax in Italy after five years of property ownership. If the property is sold within five years of purchase, the capital gain is taxed at 20%.

Insurance

Property in Italy must be insured. Insurance costs 1-2% of the property’s value per year. The amount usually ranges from 300 to 2,000 euros.

Utility costs

The utility costs for an apartment range from 200 to 5,000 euros per year, for a villa with a swimming pool - from 1,200 to 6,000 euros per year. These costs include electricity (0.2-0.3 euros per kWh), water (15-20 euros per month) and gas (30-50 euros per month). All services are calculated according to meters. Tariffs vary depending on the region and even the time of day.

If we are talking about a condominium, the maintenance fee also includes the costs of maintaining common areas, the work of a concierge and cleaning the pool.

A landlord in Italy is required to pay taxes on rental income, and there are two possible tax regimes:

• Cedolare Secca: A simplified tax that allows you to avoid other tax liabilities. The rate is 21% of the income, or 10% if you rent under a preferential agreement. It only applies to individuals who rent out residential property.
• Standard tax regime: In this case, rental income is added to the total income and is taxed at the IRPEF rate, which depends on the annual income of the landlord.

Rights and obligations of the landlord in Italy

• Right to a deposit: The landlord has the right to demand a deposit (usually equal to one month's rent) to cover any damage to the apartment.
• Rights to annual rent revision: In Italy, rent can be indexed to inflation (ISTAT index), if this is provided for in the contract.
• Obligations of the landlord: The landlord is obliged to provide the accommodation in good condition, to carry out major repairs if necessary, and to ensure that the tenant complies with the lease agreement.