Here is the list of the property fees (closing costs or completion costs) payable when you buy a property in Italy.
Finally you’ve found the right home in Italy, now are you worried about all the closing costs involved in the deal. No problem!
With this short list you will have a clearer idea of the right expenses you have to pay.
Closing costs are not a a fixed amount but the vary considerably according to different factors: first of all the price paid/sold for the property, if the property is new building or an old one, whether you’re buying with an agent or with a private seller and if you are buying a luxury property or not. Most property fees are based on the ‘declared’ value of a property, which is usually different than the actual purchase price or its ‘market’ value.
The fees you pay when buying a property in Italy include: registration tax, land registry tax, value added tax (VAT)- that you will pay directly to the notary, a notary’s fee,the estate agent’s fee and if you are not fluent in italian you need the translation of the final purchase deed.
Fees are usually payable on the completion of a sale with the exception of the agent fee that is paid while signing the preliminary sale contract.
Here is the list of the different option when you buy a house in italy
- Notary’s Fees
Notary’s fees depend on the price of a property and are higher (as a percentage of the selling price) on cheaper properties. There’s also a fee for each page and each copy of a contract, plus fees for extra services such as taxes (e.g. tax stamps), expenses, legal advice and any payments made on your behalf. As said before, all the taxes such as Registration, Mortgage, Land registry tax, stamps, VAT – if applicale- are paid to the notary. This taxes are not the same for every kind of property:
A) If you purchase from a builder/renovator:
When buying a property from a building firm/renovator except in particular circumstances, you will be asked to pay VAT (which is payable directly to the seller). The VAT rate to be applied on the sale price will be:
10% unless it is a first home purchase
4% in case of purchase of your “first home”.
In the case of purchases subject to VAT, you will pay to the notary (he will forward them to the Taxation Office) also the following taxes:
Registration tax:Euro 200
Mortgage tax: Euro 200
Land Registry tax: Euro 200
B) If you are purchasing from a private party
The registration tax, mortgage and land registry taxes are paid by the buyer to the notary who, in turn, will forward them to the government Taxation Office at the time of registration.
1) In the absence of incentives
Registration tax: 9%
Mortgage tax: Euro 50
Land Registry tax: Euro 50
The rates apply as a rule on the sale price declared in the deeds; in the case of transfer of residential property to physical persons the purchaser may apply for payment of the registration tax on the “cadastral value” (price-value) of the property (which is the value obtained by multiplying the cadastral income by the legal coefficient of 126), regardless of the actual amount of the sale price, even if it is higher than this value.
The minimum tax is still €1,000.
2) Support for the purchase of a first home (prima casa)
Registration tax: 2%
Mortgage taxEuro: 50
Land Registry taxEuro: 50
The rates apply as a rule on the sale price declared in the deeds; in case of transfer of residential property to physical persons the purchaser may apply for payment of the registration tax on the “cadastral value” (price-value) of the property (which is the value obtained by multiplying the cadastral income by the legal coefficient of 115.5), regardless of the actual amount of the sale price, even if it is higher than this value.
The minimum tax is still €1,000.
Closing costs when buying a house in Italy
- Estate Agent’s Commission
Agents’ commission (provvigione) is calculated on the sale price it is a percentage (e.g. from 3 to 8 per cent) and is usually paid both from the vendor and buyer. Most of agent charge a minimum amount of 2000 euros. VAT needs to be applied.
- Translator Commission
If you are not fluent in Italian, a translator is mandatory. In fact you can’t sign a purchase deed if you don’t understand what you’re signing! For this reason you require a translator who will translate the purchase deed in your native language. This fee vary from each translator, is always advisable to ask your agent, he may have an agreement with an interpreter and can offer you a lower price.