The following publication presents framework information on the tax burden of transactions related to the acquisition of real estate in Italy.
The Italian tax system introduces the following public charges related to the acquisition of real estate in the territory of the country:
1. VAT. It applies whenever the seller is a construction company that sells the property within 4 years from the completion of the construction or complete renovation of the property.
VAT is charged on the value of a real estate sale transaction as agreed between the seller and the buyer, and the applicable rates are:
1) 4% with a tax reduction intended for a home buyer who buys a property for the first time;
2) 10% at the standard tax rate for a first-time homebuyer;
3) 20% for transactions concerning luxury buildings pursuant to the Ministerial Decree of August 2, 1969. When a transaction is subject to VAT, three more taxes are added:
a) €168 registration fee = flat tax
b) mortgage tax €168 = flat tax
c) cadastral tax € 168 = flat tax
2. Registration Fee
The registration fee is charged whenever the act is not subject to VAT. What's more, this fee is added, also in the case where you buy a newly built house from a private person or from a non-construction company. The registration fee is additionally mandatory when purchasing a newly built building (or a completely renovated building) from a construction company that completed construction work more than four years before the sale of the property.
Italian tax law requires this tax to be paid directly to the notary public at the time of drawing up the sales contract and must be added to the mortgage and cadastral tax.
In other cases, if the seller is not a statutory VAT payer, then the taxes to be paid for the buyer are as follows:
a) In the option without reducing the tax rate for the first buyer of the house:
b) In the option with tax reduction for the first time buyer:
