Taxes on real estate in Italy
According to the latest statistics, Italy is one of the few countries in Europe where, although not globally, there is a decrease in the value of real estate, due to which many buyers turn their choice to it. As elsewhere, there are taxes that will have to be paid once and annually to foreign homeowners along with Italian citizens.
Costs when buying a property
When buying property in a new building, an amount of 10% VAT is paid on the sale value of the property. If real estate is purchased on the secondary market, then the registration fee of 9% of the cadastral value of the object is paid, which may be significantly lower than the sale price. Provided that the foreign owner converts the purchased housing into rezidenza format within 18 months after the purchase (since he draws up a residence permit and becomes a resident of Italy at the address of the acquired property), he can take advantage of preferential tax rates when buying the first house: 4% VAT when buying a new home or pay 2% for the registration fee for the purchase of a secondary. If it is not possible to issue rezidenza within 18 months after purchase, then this benefit is canceled, as a result of which you will have to pay the difference in tax, as well as a fine that can be minimized if you voluntarily inform about the impossibility of fulfilling the specified period.
Property Taxes in Italy
At the same time, the owner (a foreigner or a citizen of Italy), in order not to lose this benefit, should not sell the property earlier than 5 years after making the purchase. If, nevertheless, he decides to sell the house before the expiration of the 5-year period, then he can save the benefit if within 1 year after the sale he purchases a new property, for which he will issue a rezidenza.
Registration, mortgage and cadastral fees are 50 euros each, when it comes to the purchase of secondary housing (total 150 euros), and 200 euros for the purchase of new housing (total 600 euros). It is also necessary to lay registration costs in the form of a preliminary contract – they can vary, but usually amount to at least 350 euros: a fixed rate of 200 euros, payment in the amount of 0.5 to 3% of the amount of the deposit or advance, as well as a stamp fee. Also, expenses of 850 euros and more are paid for a translator and a witness during the execution of a notarial deed – there is no getting away from them if the buyer does not speak Italian.
Each year, the buyer will need to pay a single municipal tax (IUS), consisting of expenses for city services (TASI – Tassa sui Servizi Indivisibili), garbage collection (TARI-TAssa RIfiuti) and real estate tax (IMU – Imposta Municipale Unica). They may vary depending on the specific region of Italy. IMUs are calculated based on the cadastral value of the property (from 0.4 to 0.7% of the cost of housing, depending on the commune). At the same time, since 2015, property owners who enjoy the privilege of buying their first home, which is their main place of residence (prima casa), have been exempted from IMU.
TASI is a municipal municipal tax, which includes the costs of lighting, greenery maintenance, street cleaning and other services. It, like TARI, must be paid by all property owners or tenants without exception.
Utility costs depend on the size of the property, its infrastructure (pool, security, etc.) and in which region it is located. Typically, costs are about 500-6000 euros per year – the most budget option is usually in Calabria, though the quality will most likely be appropriate. And the maintenance of the house in Tuscany and Abruzzo will be one of the most expensive in Italy, but the level of infrastructure will be proportionate.
Property Taxes in Italy
Since in some communes the owners receive annual tax payments by mail, while in other regions this does not happen, the owner has the responsibility of calculating taxes on his own and making the payment. Moreover, if mistakes are made in the calculation, you will have to pay a fine, so both local residents and foreigners sometimes hire a tax consultant to pay, spending 50 euros on this or contact the state support service, where the cost of such a service is much less, but will have to stand in a live line for an appointment.
Taxes for non-residents
Foreigners in Italy should prepare for a progressive income tax for non-residents in the amount of 23% to 43%, which also accrues from 0.9% to 1.4% of the local authorities, as well as municipal fees in the amount of 0.8% of income . Income tax applies to profits made only in Italy, and a double taxation law is in effect between Russia and Italy. In matters related to real estate, this may be a tax on income from the rental of real estate according to the standard above rates.