Are Property Taxes High in Italy

The Valore katastale is usually lower than the actual sale price or the price of the market value of the property. Flying to Italy has never been easier due to competition from low-cost airlines, so your property should be easily accessible wherever your investment is. The country`s strong transportation infrastructure and modern systems make it a natural option for savvy investors looking for a solid market with growth rates of up to 25% in some regions. Italian property taxes for foreigners tend to be higher in certain categories and also vary depending on other factors such as: For taxes for expats, we have been preparing US taxes for Americans in Italy since 1998. We have been audited by the State Department and are on the list of licensed tax advisors at the U.S. Consulate in Rome. Our customers come from all regions of the country – Rome and Milan, Naples and Turin, Genoa and Sicily (Palermo). Please also note that in Italy, no CGT is due if the property has been held for more than 5 years, unless the site of the property is land on which a unit has been built. In this case, the sale is considered a commercial activity and is subject to the CGT, even if the seller is not a professional.

Whether you are based in Italy or not, as an owner, you must always file a tax return. The Italian authorities are only interested in the income you may have earned in the country, for example, you may have deposited money with a bank that receives interest. You are not interested in the investments you might have outside of Italy. You may also have to pay VAT on real estate agency and lawyer fees when buying a property in Italy. TASI is a new tax introduced in 2014 that is payable in June and December in the same way as the IMU tax using the rendita catastale. It was introduced to cover “indivisible services”, i.e. services used by all citizens, such as street lighting and road maintenance (as opposed to services such as school transport, which are only used by certain people). Since 2016, properties registered as a principal residence are exempt from this tax.

Again, bills are not sent to individual homes and it is the responsibility of each person to pay the bill on time and correctly. In addition to the IMU tax, we can help you with these taxes. There are four basic property taxes that you have to pay when buying a home in Italy: Buyers pay the majority of sales tax in Italy, although sellers may have to pay capital gains tax as well as VAT on certain fees. Maintenance taxes are usually in the hands of the owner. The so-called stamp duty in English is imposta di registro in Italian. In short, it is a tax on the registration of a property. If you buy a property from a developer or builder, but the property was completed more than 5 years ago, taxes are calculated in the same way as for an individual. Let`s take a closer look at each of the initial property taxes in Italy: the imposta ipotecaria, as it is called in Italian, is a mandatory tax calculated on the basis of the cadastral value of the property as written in the deed of sale, the Rogito. If you buy your new Italian home from a private seller or reseller who is not subject to VAT, a flat fee of 50 euros will be charged for the registration of the land registry.

However, if the seller is a company registered for VAT with the Italian government, the property tax rate is 200 euros. For real estate in Italy, VAT (known by the abbreviation IVA in Italian, for imposta sul valore aggiunto) is calculated as a percentage of the price of the property. VAT is not levied on properties purchased from private sellers that are not subject to VAT and is only applied to purchases of real estate from developers, developers and renovation companies if you purchase less than 4 years after the completion of the construction/renovation work. Italian tax authorities require expats to declare all their assets held outside Italy, including real estate and savings accounts. If a person has assets outside the country, they must submit a form with their regular tax return in Italy. All cash or investment transfers to or from Italy must also be reported. Currently, there is no tax on these transfers or assets, but failure to submit the form can result in significant penalties. For some of the fees you incur when paying for your Italian property, you can probably make payments online.

However, you need to check if you can pay from an international account or if you need to make the payment from an Italian bank account. In Italy, there is no extension and the penalties for late filing are quite high. If tax returns are filed more than 30 days after the due date, the penalties range from 120% to 240% of the amount due. This is just a selection of the other fees you incur when buying, selling or receiving a property in Italy. The total costs vary from case to case. If you sell within 5 years of buying a property in which you were resident, you must buy another property in Italy within 1 year of the sale, otherwise you will lose the tax benefits of the initial purchase. As in most countries, in Italy there are other types of taxes in addition to income tax. .