A Brief Taxation Guide for Properties in Italy

Gregorio Arcaleni
5 days ago
3 min read

Buying or Selling Property in Italy: What Taxes Do You Pay?

Whether you're purchasing a charming countryside villa or selling a plot of land near the coast, understanding the taxes involved in Italian real estate transactions is essential. Italy has a complex but well-defined system of property transfer taxes, and both buyers and sellers need to be aware of what they’re responsible for.

If you BUY

- Three main taxes have to be paid, and they depend on the type of Property:

Tax First home (from private) - 2% of cadastral value Registration Tax, Mortgage Tax €50 and Cadastral Tax €50;
Second home (from private) - 9% of cadastral value Registration Tax, Mortgage Tax €50 and Cadastral Tax €50;
New property (from builder) - 4% VAT (first home) or 10–22% VAT (second/luxury), Mortgage Tax €200 and Cadastral Tax €200;
Tax Agricultural land - 15% of cadastral value Registration Tax (or 9% for professional farmers), Mortgage Tax €50 and Cadastral Tax €50;
Non-agricultural land - 9% of cadastral value Registration Tax, Mortgage Tax €50 and Cadastral Tax €50;
Building land (from a Company) 21% VAT, Mortgage Tax €200 and Cadastral Tax €200;

The Cadastral value is calculated using the property’s official registry value, not the market price. When the property is sold by a company, VAT replaces the registration tax, and is paid directly to the seller.

- Notary fees: Usually paid by the buyer, starting from €1,500.

- Real estate agent commission: Typically 2–4% of the sale price, plus VAT.

- Energy certificate (APE): Mandatory for all sales.

- Urban planning compliance: If needed, you may need to hire a surveyor or architect.

Instead, when you SELL

the taxes to be considered depend on the circumstances. If you sell a property within 5 years of purchase and make a profit, you may owe Capital Gains Tax (Plusvalenza) on the gain (Sale price, minus Purchase price and Documented expenses (renovations, taxes, etc.)). You can choose 26% flat tax (paid at the notary during the sale) on the gain or ordinary income tax (IRPEF) based on your total income, however, exceptions are made by law if the property was your main residence for most of the ownership period or is sold after 5 years. If you are instead Selling Land, capital gains tax is due even after 5 years.

If the property is transferred via Inheritance or Donation, different rules apply:

Relationship Tax Rate Exemption Threshold

Spouse/Children 4% €1,000,000

Siblings 6% €100,000

Others 6–8% No exemption

- Mortgage and cadastral taxes: Usually €200 each if “first home” benefits apply.

What are the taxes to be paid yearly in Italy?

Owning a home in Italy comes with its fair share of charm, but it also comes with a few responsibilities, and yes, that includes taxes. Whether you're a local homeowner or a foreign buyer dreaming of a Tuscan retreat, it's important to understand the annual taxes you'll be expected to pay. Let’s break it down:

- IMU (Imposta Municipale Unica) is Italy’s municipal property tax. But here’s the good news: if your home is your primary residence and not classified as “luxury,” you’re exempt. However, if you own a second home, a luxury property (categories A/1, A/8, A/9) or a rental property, then IMU applies. The amount depends on the property’s cadastral value and the local tax rate set by your municipality. It’s typically paid in two installments: one in June and one in December.

– TARI (Tassa sui Rifiuti) is the waste collection tax, and it applies to all homes, including your primary residence. It’s calculated based on the size of the property (square meters) and the number of people living there. Even if the property is vacant, you may still owe TARI unless you officially declare it unused.

- Income Tax on Rental Properties - If you rent out your property, you’ll need to pay taxes on the income you earn. You have two options: Ordinary income tax (IRPEF): Progressive rates based on your total income, or a flat-rate tax (Cedolare Secca - A simplified option at 21%, or 10% if the rental contract is “agreed” (canone concordato)).

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