TAXES
Everybody who has financial transactions in Italy must have a tax ID number (codice fiscale) and complete a tax return.
Personal taxation: non-residents
A double taxation treaty exists between Britain and Italy, so tax is payable in one or the other country, not both.
Non-residents may be liable for taxes on income, capital gains and inheritance. These vary from individual to individual.
The authorities are only concerned about Italian-sourced income. This includes interest on funds deposited with an Italian bank and income from letting a property in Italy. In the case of the latter, it is possible to offset expenses (including repairs to the property, management costs and so on) against income. The residue is taxed at between 19 and 46%, depending on the amount. Most property owners will pay around 30%.
Personal taxation: residents
Anyone staying in Italy for more than 183 days during a tax year (which coincides with the calendar year) is considered a resident. The 183 days need not be consecutive. Residents may be liable for taxes on income, capital gains and inheritance. The taxation system is extremely complex, and it is essential to take expert advice.
Purchase Tax
Land Registration tax is the main tax on real property. It amounts 10% of the declared value for ‘urban properties’ or 17% for ‘rural properties’ (purchase of land). The declared value is based on the official rateable value of the property, which depends on the local commune, category, location and size of property.
A privilege exists for the so-called main residence (prima casa) established in Italy. In this case, the land registration tax is reduced to 3% of the declared value, and for the mortgages and cadastral taxes are to be paid, in each case, only 129.11 Euros. This privilege can and should be used only for those who move their main residence to Italy, having no other Real Estate property there. In this case the acquirer must do his world income tax declaration in Italy!
In some cases, the property being sold is owned by a Company, in which case I.V.A. (VAT) at a rate of up to 20% is payable on the declared value instead of the Registration tax.
For new property the value added tax (IVA) is levied at 10% on new (for non-luxury properties) and at 20% (on luxury homes with a rating of A1 in the property register), and is included in the price charged by the builder or developer. If you build your own home you pay a reduced rate of IVA at 4%.
Periodic taxes
IRPEF (Imposta sul Reddito delle Persone Fisiche – Income tax): In Italy a house always produces income, even if the house is used solely as a residence of the owner, or if the house is not used at all. The taxes are calculated on the basis of the “Reddito Catastale" (the presumed income of land determined by the local authority for tax purposes - similar to rateable value), to which a rate, which depends on the total or overall rate of the person’s income, is applied. If the property is rented, the tax will be based on the perceived rental value.
ICI (Imposta Comunale sugli Immobili – Local tax authority): This is a tax which has to be paid to the local authority in which the property is based (like the English rates or council tax). The amount will depend on the “Reddit Catastale” and is usually between 0.4 and 0.7 per cent.
TARSU (Tassa rifiuti solidi urbani – Local refuse removal tax): This tax must be paid to the local authority in which the property is situated. These funds refuse disposal, cleaning of streets and beaches, and so on.
BUYING PROCESS - LAW
Once you have selected an Italian property and agreed a price you will need to sign the “Compromesso”, and after it the “Rogito”.
II Compromesso:
“Il Compromesso” is a preliminary contract between both parties to the sale. This document describes the property as it is listed in the land registry, and acknowledges that the seller is not aware of any outstanding debts on the house (called a Ipoteca sulla casa), it establishes the terms and conditions of the final contract (Rogito), as well as, purchase price, date for completion, and other relevant legal details. It is during the compromesso that the estate agent will expect to be paid.
You will be expected to pay a deposit at this stage (Caparra) which is usually 1/3 of the purchase price. It is important to note that if you withdraw from the sale after signing the Compromesso, you lose your deposit. However, if the seller withdraws, he must pay you double your deposit.
Since Jan 07 it is a legal requirement to register “Il Compromesso” within the tax authorities, so 0.5% of the paid deposit is used as payment of taxes to the tax office, in addition a registration fees of €168 and 3 stamps of €45 in total must be paid.
L'ato (Rogito):
This is the final contract, after signing it, the property is yours. The “Rogito” is a document that is drawn up by the Notary (Notaio), who represents both parties (buyer and seller).
The buyer, seller and estate agent are all required to be present for the signing of the contract at the Notary's office. You can sign the Rogito in person or we may be able to appoint a Power of Attorney in your absence.
At this point you will be expected to transfer funds to the Notary, this amounts to purchase price, taxes, notary fees - we advise that the best way of transferring funds to your Italian account in time for the “Rogito” is either via Swift from your own bank in the UK or you pay in cash at the Notary’s office.
In addition to the outstanding dues for the purchase of the house, the buyer will pay the land registration tax (see above) and the notary fee of 1-2,5% of the purchase price.
REAL ESTATE AGENCY - Fees
With acquisition of a real estate property, mediation costs at the rate of 4,76% of the purchase price plus 20% of VAT originate to the buyer.
ADImmobilien Intl. - your broker for real estates in Italy, Austria, Germany, in particular in the Adriatic Coast in Lignano, Bibione and Grado, as well as in the Lake Garda, Tuscany, Venice and Trieste.
Whether summer cottage, house, apartment, farms, rustic or land - we will find the suitable property for you.
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