Costs & fees
As a rough guide, it is advisable to allow for a total of about 15% to be added to the agreed buying price of a property in Italy, and up to 20% for a new property.
Property purchase tax (for non-new property): 10% (for non-residents; the figure is 3% for residents);
VAT (IVA) payable only on new properties: 9% (19% for ‘luxury’ properties);
Stamp duty (bolli): 1% for both non-residents and residents;
Notaio’s fees: These are based on a sliding scale and amount to approximately 2.5% of the Declared Land Value of the property. There is usually a minimum charge of about €1,500. The notaio will also charge for additional expenses. If you have a local mortgage, you will need to pay a mortgage registration fee, which will be 0.25% of the loan amount if the property is your main residence, or 2% if it is your second home;
Survey fees: Geometra's fees vary depending on what work is involved in the conveyance; usually approx €250;
Agent’s fees: Variable; the norm is 3%-4% but they may be anything from 2½% - 8% of the actual purchase price. Fees are payable by both vendor and buyer on completion.
Important: It is a peculiarly Italian practice but fees and costs are based on the officially declared value of a property and not its actual purchase price. The declared value is typically between 30% and 50% less than the purchase price.
Example:
An Italian property with a purchase price of €200,000 may have a Declared Land Registry value of €120,000.
The purchase tax (or VAT in the case of new properties), notaio's fee and stamp duty are all calculated on the Declared Land Registry value and not the purchase price.The following table shows a typical total cost breakdown of purchasing an Italian property for €200,000 with a Declared Land Registry of €120,000. This is for a non-resident buying in Italy:
| Purchase price | = | €200,000 |
| Declared Land Registry value | = | €120,000 |
| Purchase tax (10% of Declared Value) | = | €12,000 |
| Notaio’s fees | = | €3,000 |
| Estate agent’s fee (approx) | = | €8,000 |
| Stamp duty (1% of Declared Value) | = | €1,200 |
| Geometra’s fees (approx) | = | €250 |
| Total | = | €224,450 |
Associated costs:
It should be borne in mind that there may well be other costs associated with the purchase, as with the purchase of any new property.Examples are:
Interpreter’s fee for formal translation (a legal requirement for non-Italian speakers) of the rogito at notaio’s office, approx €350;
Charges for connection or reconnection of mains services;
Currency exchange and other banking or mortgage arrangement fees.
Ongoing costs:
ICI is the local community tax or rates paid by anyone who owns property or land in Italy. It is levied at between 0.4% - 0.7% of a property's value, the actual rate being decided by the local authority based on the size of the property, its location, class and category. If a property is unfit for habitation it could qualify for a 50% reduction. ICI is paid in two instalments in June and December and is invariably far less than council tax in the UK.
Swimming pools:
Planning permission is required so the use of a geometra or architect to make application would be necessary.Permission typically can take up to two months. Typical costs may be €2,000 for a survey and application, €1,000 for a geologist’s report, and €1,000 to have the property deeds amended to include the pool.
Then, of course, the cost of the pool’s construction must be found.
Restoration costs:
Restoration costs vary from region to region. In some areas it can be as low as €850 per sqm but in Le Marche it is usually between €1200 and €1400.
Be extremely sceptical if you are told that the figure will be significantly less than this because this is the area where buyers are most frequently misled.
The price also varies according to the condition of the property. A good solid structure could reduce the cost considerably. Also the building materials used can affect the price, brick being a third less expensive than stone.
These prices usually take the property to a habitable state, including external work, windows, doors, plastering, tiles, plumbing, heating and bathroom fittings.
However, it is possible to have a property restored to a sound condition but as a shell (al grezzo). It will then be necessary to install windows, doors, plumbing, electricity, etc.
Selling in Italy - Capital Gains Tax
When you sell in Italy, you are liable for CGT.
This is 20% of the difference between the purchase price and the sale price if the sale occurs within five years of purchase.
If you bought your house as a first house (prima casa) and consequently obtained an advantageous 3% VAT rate instead of the ordinary 10%, and are selling within five years of purchase, you have to repay the sum saved on the tax to the Taxation Authority.
Firefly:
There is no fee involved when you contact Firefly. We receive a percentage of the real estate agent’s fee only if and when a sale results. It will cost no more to use our services than going direct to an agent.
