Do you ever think about settling in Italy for a long time? Then, make a wise investment by buying a house in Italy for cheap. Italy offers a large number of opportunities in terms of tourism and real estate. The business of real estate is noticeably progressive in cities that have universities located near them, whereas, in southern Italy, the tourism business is simultaneously rising.
Auction for real estate is very common among the big cities, but keep in mind that the starting bid of a house in an auction differs vastly from the actual buying price of the house.
If you are serious about buying a house there are some charges, hidden fees, and taxes that are added to the costs of purchasing a house in Italy.
An overview of which is given below:
1. Important Taxes:
These taxes apply to almost every property you choose to buy in Italy.
• Stamp Tax
This tax varies with the use and type of house you are buying.
If you are buying from a private seller to use it as a primary property then the tax is 2% of the municipal value and if use it as a secondary property then tax raises to 9% of the municipal value.
If a registered company sells you the house then the tax is €200 in both cases.
You will have to inform the revenue agency of Italy within18 months of the purchase, about your residency. Check the municipal value of the house before you pay this tax.
• Imposta Catastale (It is the tax for land registry in Italy)
It is the taxation applied when the ownership of the property changes on the government’s lists.
In case of purchase from a private seller, it is 50€, and in the case of a registered company, it is 200€.
• Imposta Ipotecaria (It is the fixed mortgage tax in Italy)
In case of purchase from a private seller it is €50 and in case of purchase from a registered company it is €200.
• IVA-It is the VAT Tax in Italy
In case of purchase from a private seller, this tax is null.
In case of purchase from a registered company, it is:
1. 4% for a primary house.
2. 10% for a secondary house.
3. 22% for a luxury house.
• Marca da bollo
Generally it’s 2% for a receipt valued more than €77 exclusively in Italy.
2. Judiciary Taxes:
The notary tax is for the notary who is chosen by the selling party to be present during the signing of the contract to ensure the lawful handling of the transaction. Later he submits copies of the contract to government institutions informing them of the change in ownership.
3. Intermediate Fees:
If the purchase is done through an agency or an agent of the real estate then keep in mind that a percentage of the transaction will be paid to them (which is usually between 1%-5% of the actual amount).
In case of the property being a storage area, an office, or a warehouse then it won’t be very easy since there will be a lot of paperwork for it to be lawful and yet your request may get denied by the municipal corporation. Even after the purchase, the necessity of experience repairs may arise.
4. Cost of Construction:
If the house you have purchased is new or wasn’t lived in for a long period then there are certain unavoidable costs you will have to pay. Like the cost of installations, connections for gas and electricity supply, and the cost of repairs if necessary.
It is advised to consult a civil engineer to provide you with an estimation of the cost for restoration and repairs before you decide on the purchase.
5. The Contract Signing:
Now, you have made up your mind about a certain house and have made all your queries about the given costs and taxes to the seller. Then the house will be yours after a three-fold contract signing process.
The steps involved in it are:
• Deposition of a refundable amount to the seller to show your seriousness. It is known as the ‘proposta’. It is usually a small amount and is given back if the buyer changes his mind about the house.
• It is followed by the ‘preliminary’. Here also deposition of an amount of money more than the previous one will be necessary. It usually varies from 5% to 20% of the actual amount. Here you will also have to pay the fees of the agency or agent.
• Finally, the signing of the contract will take place after the total transaction and then the lawful change in ownership will be recognized. Now, you will have your own house in Italy.
Do keep in mind that the terms, deadlines and the amounts are usually negotiated with the seller. You can also avail of bank loans for your payments.