If you're looking to buy a new home in Italy, you'll need to be aware of the fees you will be required to pay throughout the buying process. You can find out what you can expect to pay below.
What are the costs of buying a property in Italy?
The main costs when purchasing a property in Italy are notary fees, taxes and estate agents commission – and collectively they do not make it the cheapest place in Europe.
Allow 10 to 20% of the purchase price for fees, taxes and costs. If you are a cash buyer, there will be fewer buying costs. If you are buying using an Italian loan or mortgage must pay for the atto di mutuo (mortgage contract) to be registered by a notary.
What are the fees when buying a property in Italy?
You can expect to pay fees and/or commissions on the following:
- Notary fees of between 1 and 1.5%, depending on the area, the value of the property and the rates charged by the individual notary.
- Non-Italian speakers will also have to pay for a certified translator when it comes to the final contract.
- Both buyer and seller pay estate agent commission, usually 2 to 3% percent of the real value, not the book value, plus VAT (IVA) of 20%.
- Land registry taxes, the “cadastral” tax, plus 20% IVA on the legal fees are also factored into the overall figure.
What taxes do you pay when buying a house in Italy?
Purchase taxes depend on whether you are buying a first or second home (a holiday home) and whether you are buying from a company rather than from a private seller.
For old properties, registration tax is 3% for those buying their main home, and it must not be classified as a ´luxury´ home. The registration tax for non residents and those buying second homes is 7%, so if you're planning to become a resident in Italy, do so 18 months before buying your home.
The tax is calculated on the declared value of the property and not on the purchase price. Buyers of new properties do not pay registration tax and instead are liable to pay IVA/VAT, which ranges from 4% to 22%. This is 4% for first-home resident buyers, 10% for second-home and non-resident buyers, and 22% on luxury homes. New properties are defined as those dwellings sold within five years of completion of construction or restoration. VAT rates have been frozen at the above rates until 2022.
If you originally decide on a second (holiday) home however it becomes a residential home, or vice versa, you have 18 months to declare this to your notaire who can change this for you and calculate the tax difference (this will incur some additional notaire fees).
What is capital gains tax on property in Italy?
Be aware of capital gains tax – if you pay taxes based on the cadastral price (declared value of the property) and it is much lower than the purchase price, then you sell the property within 5 years, you could be eligible to pay a much larger capital gains tax as you would have created an artificial gain compared to what you have claimed. This would not be an issue if you are selling the property after 5 years, you reinvest the money in Europe within a certain time period or if the property was not your main/only residence.
FAQs
The price of property in Italy varies greatly based on exact location and property type. So, for example, you could pay just €16,000 for an apartment if you buy property in Sambuca⁵ in Italy, but you'll expect to pay much more if you go property hunting in Venice or Milan - Italy's most expensive cities.
Is it worth buying property in Italy? ›
Italy offers a rich cultural history, stunning landscapes, and a high quality of life. Plus, the country has a diverse real estate market with opportunities ranging from countryside villas to city apartments. It's a great opportunity for those looking for a second home, retirement destination, or investment.
What part of Italy is the cheapest to buy a house? ›
Abruzzo. Compared to Tuscany and Umbria, Abruzzo is the cheapest region to buy a property in Italy. There are numerous property options, from beachside apartments to inland farmhouses and historic palazzi. Abruzzo's inland countryside is full of picturesque towns and ancient Roman ruins.
How long can an American stay in Italy if they own property? ›
LONG TERM SCHENGEN TOURIST VISA (V.S.U.) (5 YEARS)
Anyone wishing to make a real estate investment in Italy who does not intend to transfer residence can obtain a long term Schengen visa (5 years), if the requirements of their stay in the country do not exceed 90 days every 6 months.
Do you pay tax on property in Italy? ›
IMU (Imposta Municipale Unica): This is an annual municipal property tax that is levied on the property's cadastral income. The rate varies depending on the municipality, but it typically ranges from 0.4% to 0.8%.
What are the pitfalls of buying property in Italy? ›
Not fully understanding the local property taxes and maintenance obligations can result in unexpected costs. For instance, Italy has an IMU tax (a kind of municipal tax on property) that varies depending on the region and property type. Failure to understand these nuances can lead to financial strain down the line.
Are property taxes high in Italy? ›
If you sell a property in Italy, you may need to pay capital gains tax at a 26% rate if the property's value has increased during ownership. Property owners pay: a municipal property tax between 0.46 and 1,06%; tax on local municipality services between 0.1 and 0,25%;
What is the average house price in Italy? ›
According to the Italian Housing Market Survey, over 60% of 1,458 real estate agents surveyed reported stable house prices in the first quarter of 2023. Today, the average house price in Italy is €380,000 for a 2,000 square-foot-home.
Is it hard to sell property in Italy? ›
It often takes around four to five months to sell your property in Italy; however, this can be dependent on whether there are any issues with the property valuation or planning permission.
Is Italy cheaper to live than the US? ›
Insights and Comparisons. The comparison revealed that, dollar for dollar, Italy is approximately 20% cheaper than the USA when considering food, rent, transportation, and other categories.
The six cheapest cities to live in Italy
- Caltanissetta.
- Bari.
- Teramo.
- Ancona.
- Potenza.
- Palermo.
American citizens can buy a property in Italy without restrictions on nationality or residency. The most expensive city to purchase a property in Italy is Rome, and the cheapest is Palermo. Specialist money transfer providers like Wise and OFX can help you save money in transfer fees between the US and Italy.
How much money is needed to retire in Italy? ›
Getting an Italian Visa
You'll also have to provide proof of sufficient retirement funds with which you can support yourself. For 2024, these annual income requirements are about $33,195 for individuals and $40,690 for married couples. The most popular Italian visa for retirees is the Italian Elective Residence visa.
What is the 183 day rule in Italy? ›
The Physical Presence Test. The Legislative Decree introduced this new test of residence effective for FY 2024 onward. If you are physically present on Italian soil for more than 183 days (or 184 in a leap year) you are considered tax resident in Italy. Days or arrival in and departure from Italy count as a whole day.
Can US citizens buy property in Italy? ›
Buying property in Italy as a US citizen is fully permitted by Italian law. This is primarily because of the principle of reciprocity: Italy opens its property market to nationals from countries where Italian citizens are likewise permitted to purchase property.
Is it cheaper to live in Italy than the US? ›
The comparison revealed that, dollar for dollar, Italy is approximately 20% cheaper than the USA when considering food, rent, transportation, and other categories.
Is it true you can buy a house in Italy for $1? ›
Want to buy a $1 home in Italy? The best advice from 3 people who did it. For years now, people around the world have been captivated by Sicilian towns selling off abandoned homes starting at 1 euro, or roughly $1.08.
If you're looking to buy a new home in Italy, you'll need to be aware of the fees you will be required to pay throughout the buying process. 