Taxes on the Purchase of Property in Italy

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Taxes on the Purchase of Property in Italy

Disclaimer
Tax law is complex and every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Italian tax law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

Taxes on the Purchase of an Immoveable Property

On the purchase of an immovable property there is a registration tax (imposta di registro) or alternatively VAT (depending on the seller) as well as the Cadastral and Land Registry taxes (imposte Ipotecarie e Catastali). The payment of such taxes is naturally at the expense of the buyer.

When the seller has a VAT number and operates in the construction industry (for example, a construction firm, a firm which held the planning permission or which restructured or restored the property), the following must be paid on the purchase price indicated in the purchase deed:

• VAT at ten percent (four percent if it is the main or only residence (prima casa))
• Fixed Registration tax: €168.00
• Fixed Land Registry tax: €168.00
• Fixed Cadastral tax: €168.00

In other cases (for example, a purchase from a private individual or a business different from the ones indicated above) the taxes payable are:

• Registration tax: seven percent (or three percent if it is the main or only residence (prima casa))
  • Registration tax on the purchase of building land is eight percent
  • Registration tax on the purchase of agricultural land is fifteen percent
• Land Registry tax: two percent (or a fixed amount if it is the main or only residence)
• Cadastral tax: one percent (or a fixed amount if it is the main or only residence)

Taxable base for the purposes of the Registration Tax and VAT

In general and apart from exceptions (for example, the purchase of building and agricultural land), the taxable base for the application of the proportional registration tax comes from the cadastral value of the property.

The cadastral value is calculated by multiplying the cadastral income by the following coefficients:

• 126 - for buildings belonging to cadastral groups A, B, C (excluding categories A/10 and C/1)
• 63 - for buildings of the categories A/10 (public and private offices) and D
• 42.84 - for buildings of the categories C (shops and stores) and E
• To see category descriptions: Click here (PDF in Italian)

The taxes (registration, cadastral and land registry) are paid by the buyer to the Notary Public at the signing of the purchase deed and then by the Notary Public to the Inland Revenue at the time of registration of the contract.

For transfers subject to VAT the taxable base is always the price agreed between the parties.

Municipal Tax on Properties 

After the purchase of immovable property in Italy, residents and non-residents in Italy are subject to municipal tax on properties (Imposta Comunale sugli Immobili or ICI).

ICI is a local tax which affects all property (land and buildings) situated in Italy and must be paid by the owner, the usufructuary (person who has the right to the use of another's property) and the owner of other real rights such as use, or residence.

The current tax regulations set out two different obligations: ICI Declaration and Payment of the ICI tax.

ICI Declaration

Anyone who becomes the holder of one of the above mentioned rights must submit a declaration to the Municipality (Comune) where the building is situated, on the appropriate form.

Payment of the ICI tax

ICI must be paid to the Comune where the building is situated and levied at a rate dependent on the re-evaluated cadastral income. The rate, which varies from one Comune to another, is established locally, each year, by a resolution of the Comune.

ICI must be paid for the current year and the tax may be paid at the Post Office with a postal payment form (bolletino postale) or by form "F24" in accordance with the following timescales:

• 30 June: the taxpayer may choose to make a partial payment (calculated on the basis of the ownership of the asset for the period from 01 January to 30 June) or to make the full payment immediately (relative to the ownership of the asset for the period from 01 January to 31 December)
• 20 December: where a partial payment was made in June, the balance must be paid and is calculated according to the difference between the total amount of the tax for the whole year and the partial payment made in June.

The first payment of ICI (for example the first payment after buying a property) must be made in accordance with the above deadlines and is equal to the accrued tax from the date of acquisition of the assets until 30 June or 31 December.

Further Information

• Italian Revenue Agency: L'Agenzia delle Entrate (in Italian)
• See also AngloINFO INFOrmation Page Personal Taxation - Income Tax, Capital Gains & Inheritance Tax - in Italy

Prepared by Avv. Giammarco Muzj and Dott.ssa Ilaria Mecatti
JMU – Law Firm. 80 Via Cavour, 50129 Firenze
Tel: 055 268549, e-mail, Website
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