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Italian Property Taxes What you Need to Know
If you are a foreign national considering investing in property in Italy, it is essential to understand the property tax regime. Italy offers a diverse range of real estate opportunities, from picturesque countryside villas to charming city apartments, but navigating the Italian property tax system can be daunting. There are multilingual and multijurisdictional Italian Avvocatos (lawyers) who can help you understand more about Italian property taxes, should you choose to buy or rent property in Italy.
In this guide, we will provide you with a comprehensive overview of the property taxes you need to be aware of when purchasing property in Italy as a foreign citizen, helping you make informed decisions and avoid unexpected financial surprises. We will also discuss the rate of property tax that needs to be paid in Italy, whether there is capital gains tax or foreign property tax, and if there are any hidden fees when purchasing Italian property.
Click on the links below to jump to that section:
Find out more about the various Italian property taxes
Discover how much you could be paying on property in Italy
Find out whether you need to pay capital gains tax on Italian property
Here’s what you need to know about foreign property tax in Italy
- Are There Any Hidden Fees When Buying Property in Italy?
Discover more about the fees you need to be aware of
Here’s how we can assist
What Property Taxes Do I Need to Be Aware of in Italy?
When buying property in Italy, there are several property taxes you need to be aware of, including:
Immobiliare (Real Estate) Tax
IMU (Imposta Municipale Unica): This is an annual municipal property tax that is levied on the property's cadastral income. The rate varies depending on the municipality, but it typically ranges from 0.4% to 0.8%. IMU is due by September 30th each year.
Transfer Tax
Imposta di Registro: Also known as the Registration Tax, it is applicable when purchasing property. The rate varies depending on the property type, ranging from 2% to 9%.
Value Added Tax (VAT)
If you are buying a new property or one that has been substantially renovated, you may be subject to VAT at a rate of 4% to 22%, depending on the property's type and location.
How Much Property Tax do you Pay in Italy?
The total amount of property tax you pay in Italy depends on various factors, including the property's value, location, and your residency status. To calculate the exact tax amount, you should consult with a tax advisor or legal expert who can provide personalised guidance based on your specific circumstances.
Our multilingual Avvocatos here at Giambrone and Partners have vast experience in Italian property law, and can help you navigate the complexities of Italian property tax. To find out more, you can talk to one of our Italian lawyers here.
Is There Capital Gains Tax on Property in Italy?
Yes, Italy imposes Capital Gains Tax (Imposta sulle Plusvalenze) when you sell a property. The rate for individuals is 22%, while for companies, it is generally 27.5%. However, there are exemptions available for primary residences and properties held for specific periods.
There are various tax issues that can arise when moving to or working in Italy. You can find out more about the various tax implications here.
What is Foreign Property Tax in Italy?
If you are a foreign national owning property in Italy, you may speculate as to whether there are any additional taxes or considerations. Italy does not impose specific property taxes solely based on foreign nationality. However, you should be aware of certain requirements, such as reporting your foreign assets and income in accordance with Italian tax laws. Failure to comply with these requirements can result in penalties.
Are There Any Hidden Fees When Buying Property in Italy?
In addition to the property taxes mentioned earlier, there are some other costs associated with buying property in Italy that you should be aware of:
Notary Fees
Notary fees are charged for the notary's services during the property transaction. These fees typically range from 1% to 2% of the property's purchase price.
Legal Fees
Engaging a legal expert or attorney to assist with the property purchase is advisable. Legal fees can vary but are generally around 1% to 2% of the property's value.
Agent's Commission
If you use a real estate agent to find your property, be prepared to pay a commission fee, usually around 3% to 6% of the property's purchase price.
Property Survey
While not mandatory, it is often recommended that a property survey is conducted. The cost depends on the property's size and location.
Utilities and Maintenance
Ongoing costs such as utility bills, maintenance, and property management should also be factored into your budget.
Purchasing property in Italy can be a rewarding investment, but it is essential to be well-informed about the property taxes and associated costs. By understanding the intricacies of the Italian property tax system and seeking expert assistance when needed, you can make confident and informed decisions that will allow you to enjoy your Italian property to the fullest.
You can find out more about Italian real estate in our advice centre here.
How Giambrone and Partners Can Help
Navigating the complexities of Italian property taxes and legal requirements can be challenging, especially for foreign nationals. Giambrone and Partners is a leading international law firm with extensive experience in Italian property law and taxation. Our team of experts can provide you with tailored advice and support to ensure a smooth and successful property transaction in Italy.
Whether you need assistance with property due diligence, tax planning, or legal representation, Giambrone and Partners can help. We have a deep understanding of the Italian property market and can guide you through every step of the process, from property search to acquisition and beyond. Contact our expert lawyers at Giambrone and Partners today to begin your journey towards owning your dream property in Italy.
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