Taxes on the purchase

The taxes on the purchase of the property provided by the Italian legislation can be:

1. VAT It applies when the seller is a building firm that sells the property within 4 years from the time of the completion of the building or the complete renovation.

The VAT is calculated on the compensation agreed between seller and buyer and the applied rates are:

1) 4% with the first time homebuyer tax credit;

2) 10% without first the first time homebuyer tax credit;

3) 20% luxury buildings under Ministerial Decree August 2nd, 1969. When the deed is subject to VAT another three taxes are added, that are:

a) registration fee of € 168 = flat tax

b) mortgage tax € 168 = flat tax

c) cadastral tax € 168 = flat tax 2. Registration Fee The registration fee is expected when the deed is not subject to VAT or if you buy a house from a private seller, from a “non-­‐building” firm or a “building” firm (or that has totally refurbished the building) that completed the work more than four years earlier.

This tax must be paid directly to the notary at the time of the deed, and it must be added to the mortgage and cadastral taxes. In conclusion, if the seller is not subject to VAT, the taxes to be paid for the purchaser are: a) without first time homebuyer tax credit: 1) the registration fee of 10%; b) with first time homebuyer tax credit: 1) registration fee of 3% + € 336 The tax base on which the registration, mortgage and cadastral taxes at a proportional rate have to be calculated is the cadastral value of the property (in case of sale between private individuals), regardless of the purchase price which still must be fully stated in the deed of sale.

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