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The real cost of buying a house in Italy as a foreigner

How much does buying a home in Italy really cost? Here's our expert guide to the fees, taxes and charges involved.

The real cost of buying a house in Italy as a foreigner
Are you dreaming of buying your own home in Italy? Photo: D G Design

We’ve all heard about the large number of cheap renovation properties for sale in Italy. And it’s true – you can take your pick of homes for 50,000 euros or less, and many small towns are still selling off houses at a base cost of one euro (though the other costs involved are quite a lot higher).

But even without the major renovation work such properties usually need, the sale price of a house obviously isn’t the total cost of buying a home.

And if you’re a foreigner buying property here you may be understandably wary of hidden costs and charges cropping up.

So to light the way, we’ve got a guide to the real costs of buying a house in Italy as a foreigner from home-buying and renovation expert Gary Edwards from D&G Design, based in Le Marche.

A dream home in Le Marche, Italy. Photo: D&G Design

Taxes

The first point to note is that VAT, or sales tax, is called IVA in Italy and is currently 22 percent. So add this amount onto the prices below.

The bollo

This is a mandatory tax in the form of stamps that is slapped on to most contracts or invoices over the amount of €77.47. And when I say slapped, you literally do have to buy stamps from the tabbachi or post office and attach them to the invoice.

Phone contracts, some utility contracts, any kind of lease over the amount of €77.47, they are all subject to the bollo. However, it is a per-invoice/contract charge, so you don’t have to pay it for every €77.47 you are invoiced for, it’s a one-time payment on the invoice/contract itself.

The amounts of the stamps are either €2, or €16.

  • The €2 tax stamp is applied to invoices and tax receipts with an amount exceeding €77.47.

  • The €16 revenue stamp is applied to the deeds of public administrations, to corporate or notary documents.

However, if the services you are paying for are exempt from IVA (which very few things are in Italy), then only the €2 stamp is added.

As you can probably imagine, there is a long list of rules as to when the bollo should be applied.

As a guideline, expect to pay €16 on any invoice for a contract that is over €77.47 and includes IVA, and €2 on any invoice that does not.

Agent’s commission

If you’re buying a house through a real estate agent, they take a percentage (normally around three percent of the purchase price) from both the seller and the owner.

There are many articles on the internet which view this negatively, as why would an agent negotiate the best price for you if their commission depends on it?

The agents that we work with are always willing to negotiate the best price as reputation amongst many professionals in Italy is more important than quick money. Realtors invest a lot of time and money to become qualified: you cannot become a realtor in Italy without years of study and qualifications.

A renovated house in Monferrato, Piemonte. Photo: Toni Hilton

As with many industries in Italy, word of mouth is still the most effective and important form of marketing and in our experience, there are few professionals who would risk their reputation for a few hundred euros.

If a house has been on the market for a while, offer a price that is your maximum budget, and stick to it.

Stamp duty

Stamp duty is two percent of the cadastral value of the home if you are resident in Italy full time.

The cadastral value is generally an amount lower than you have paid for the house, as it’s based on a valuation of the property from several years ago. So normally this works in the buyer’s favour.

OR it’s nine percent of the cadastral value if this is your second home in Italy, or if you are non-resident. If you are buying as a business rather than as an individual then nine percent is applied.

The minimum payment for stamp duty is €1,000.

So if your house is very low priced, and either two or nine percent of the property’s value falls below this threshold, you will be charged a flat fee of €1,000.

Property expert Gary at work. Photo: D&G Design

Note: You have 18 months to become resident in Italy from the date of your house purchase. If it is your intent to become a resident, you will only be charged two percent stamp duty at this stage. Should you not become resident within 18 months, then the government will require the outstanding seven percent .

READ ALSO: The ultimate guide to getting residency in Italy

Exceptions to stamp duty

If your home is deemed a ‘luxury property’, stamp duty is higher, up to twenty percent, with higher land registry and cadastral taxes.

If it’s what’s classed as an agricultural property, stamp duty will be ten percent.

If you’re buying agricultural land, then stamp duty is fixed at ten percent.

If the house is a new development and it is your first Italian home, there is no stamp duty but instead IVA will be added to the purchase price at four percent. for residents, or ten percent for non residents and second home owners. Land registry and cadastral taxes are higher also.

If you build your own home, this is subject to IVA at four percent. of the value.

Land registry tax

€50 – fixed rate.

Cadastral tax

€50 – fixed rate.

Notary fees

These fees are generally fixed for each part of the sale. The notary will pay the above taxes and check that the property is legally registered.

If buying through an agent, they may be able to take care of the preliminary agreement as part of their service. Have the notary do all of the required checks at this stage, whether or not they are handling the preliminary agreement.

READ ALSO: How to beat (or just survive) bureaucracy in Italy: the essential guide

If this is a private sale, it’s worth having the notary on board from the beginning. This will cost extra as it’s more work for the notary, but you have peace of mind that everything is being done above-board and properly.https://www.thelocal.it/20181204/how-to-beat-or-just-survive-bureaucracy-in-italy-the-essential-pieces-of-italian-paperwork

Notary charges can vary from town to town, and are on a scale related to the declared value of the property, to the difficulties of the deed and of the property (i.e. how much work they have to do). A quote can be obtained from a notary before you begin the process.

The taxes above are not subject to IVA, but the notaries fees will be.

Legal fees

Depending on whether you have a lawyer overseeing the purchase of your property, they will charge you based on a percentage of the value of what you’re paying for the property.

It’s entirely up to you whether or not you feel more comfortable having a lawyer involved, many people prefer to use an English-speaking lawyer to explain each step of the process and assist.

Legal fees are subject to IVA.

Geometra or civil engineer’s fees

If the house is an old property requiring restoration or renovation work, we strongly recommend that either a geometra or civil engineer inspects it before you commit to buying.

These professionals oversee all building work in Italy and are qualified to tell you exactly what work the property will need. They can also recommend a building company and give you an estimated quote for all works required.

A house for sale in Montefortino, Le Marche, Italy. Photo: D&G Design

At D&G Design, we have our trusted geometras inspect every property that our clients show an interest in. The geometra or engineer’s fee for overseeing building work is generally 10 to 12 percent of the total price of the restoration works.

Utility fees

Water, electricity and gas are charged per unit and usually bills are issued every two months.

There are name change fees charged by utility providers, even though there is plenty of competition. Some energy companies also take a deposit.

Buying property in Italy: An illustrated tale

One thing to note is that there are higher unit charges for non-residents or second home owners, so if you’re planning on becoming resident, make sure you have this noted on your contract with your supplier to ensure that you pay the lower rate.

For residents, the TV licence is costed into your electricity bill (two payments per year). Non-residents do not pay a TV licence, but they do pay more for usage.

Local council tax and charges

The IUC (Imposta Unica Comunale – Single Municipal Tax) comprises three different local taxes, all of which are paid to the local comune (council):

  • IMU (Imposta Municipale Unica – local comune tax): similar to council or city tax and not charged if the house is your first home in Italy (unless it’s classed as a luxury property).
  • TARI (Tassa Rifiuti – collection of rubbish & garbage): a minor tax calculated on the size of your property.
  • TASI (Tassa sui Servizi Indivisibili – local tax for municipal services): a tax for services in your local area such as street lighting, road maintenance, etc. This is paid if you own the property or rent for a long period.

The council charges apply whether you are resident or not. Ask your notary or lawyer how much the charges currently are at the property you intend to buy, as they vary from town to town.

Condominium fees

Should you buy an apartment or flat in a shared building, there will be condominium fees to pay each year.

Please note that this list is not comprehensive, but covers most scenarios that foreign buyers may find themselves in.

Are you interested in our articles about property in Italy? Do you have questions or suggestions for topics that we have not yet covered on The Local? Let us know

Member comments

  1. Would it be possible to build an actual example with numbers based on a first Italian home?
    Say a property of 200.000, to get a feel for the approximate additional costs?

  2. It should be taken into account that if you sell your home within 5 years you are subject to a form of capital gains tax on the profit, ie, the cost that you purchased at and the cost you sell at. Particularly relevant if you have done a lot of improvement works to the home and thus increasing the value accordingly.

  3. Now that I’ve learned more about the process and dealt with several scammy agents, working with a reputable agency to represent your interests as a buyer is essential. I feel extremely lucky that I ended up dealing directly with a seller who was honest and easy to work with (and who has become a good friend) when we made our property purchase in the Val di Susa. An incredible stroke of good fortune as deals can quickly sour. Torben, we paid 20k euros for the home, restoration was approximately 50k on top of that. Property is small and simple, very humble but in close proximity to skiing, hiking and mountain biking, so the motivation was to be as close to possible to outdoor recreation and be outside as much as possible.

  4. Hi there. Thanks for this. I’m just embarking on this journey. And it is quite daunting. I’m down in Puglia and think I have found a house. What I can’t work out after two false starts is how you find out who owns a property and if somebody has put a house with an agent if there are other owners. The costs especially since brexit make it all very murky as the house does need some work.

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PROPERTY

PROPERTY: Should you hire a renovation agency for your Italian home?

If you're renovating a home in Italy, will you need to pay a middleman to cut through the red tape and language barriers? Silvia Marchetti looks at the pros and cons.

PROPERTY: Should you hire a renovation agency for your Italian home?

The idea of snapping up a cheap, crumbling house in a picturesque Italian village may sound appealing – but doing so always comes with tedious paperwork and the hassle of renovation.

For this reason, a growing number of professional agencies have sprung up in Italy to cater to foreign buyers snapping up cheap homes amid the property frenzy.

In many of the Italian towns selling one-euro or cheap homes, there are now ‘restyle experts’ and agencies that offer renovation services handling everything that could become a nightmare: from dealing with the paperwork and fiscal issues to finding a notary for the deed, contracting an architect, surveyor, a building team and the right suppliers for the furniture.

They also handle the sometimes tricky task of reactivating utilities in properties that have been abandoned for decades.

I’ve travelled to many of these villages and looked at this side of the business, too. Hiring these ‘middle people’ comes with pros and cons, though the positive aspects can certainly outweigh the negatives – provided you’re careful to pick the right professionals. 

READ ALSO: Why Italians aren’t snatching up their country’s one-euro homes

These intermediaries are usually locals who have expertise in real estate and a good list of suppliers’ contacts. This allows them to deliver turnkey homes that were once just heaps of decaying rubble, sparing buyers time and money – particularly those living abroad, who then aren’t forced to fly over to Italy countless times a year to follow the work in progress.

I’ve met several buyers from abroad who purchased cheap homes sight unseen after merely looking at photos posted online by local authorities, but then had to book many expensive long-haul flights to hire the architect, get the paperwork done, and select the construction team (a few even got stuck here during Covid).

Thanks to their contacts the local agents can ensure fast-track renovations are completed within 2-4 months, which could prove very useful as the ‘superbonus’ frenzy in Italy has caused a builder shortage meaning many people renovating property now face long delays

Photo by TIZIANA FABI / AFP

Their all-inclusive commission usually starts at 5 percent of the total cost of a renovation, or at 2.500 euros per house independently from its cost and dimension. The fee also depends on the type of work being carried out, how tailored it is and whether there are any specific requirements, like installing an indoor elevator or having furniture pieces shipped from the mainland if it happens to be a Sicilian or Sardinian village. 

However, buyers must always be careful. It is highly recommended to make sure the local authorities know who these agents are and how reliable they are in delivering results.

Town halls can often suggest which local companies to contact, and this gives the renovation legitimacy in my view. In a small village, where everyone knows each other, when the town hall recommends an agency there’s always a certain degree of trust involved and agents know that their credibility is at stake (and also future commissions by more clients). 

Word of mouth among foreign buyers is a powerful tool; it can be positive or detrimental for the agency if a restyle isn’t done the right way, or with too many problems.

READ ALSO: How to avoid hidden traps when buying an old property in Italy

So it’s best to avoid agencies from another village, even if nearby, who come to you offering fast and super-cheap services, or local agencies that are not suggested by the mayor’s office. 

Then of course there can be other downsides, which largely depend on how ‘controlling’ and demanding the client is. 

For those not based in Italy full-time, the most important consideration is: how much can you trust these professionals to deliver what you expect, exactly how you want it, without having to be constantly on the ground? 

Photo by Philippe HUGUEN / AFP

Language can be a major obstacle. There are technical building terms that prove difficult to translate, and if the local agency doesn’t have English-speaking renovation professionals with a track record in following foreign clients it’s best to look for an intermediary with a greater language proficiency. 

I remember meeting an American couple once who got lost in translation with a village agent for days, and had to hire a translator just to hire the intermediary.

It’s always useful to ask for a ‘preventivo’ (quote) with VAT indication, considering roughly how much inflation could make the final cost go up. Buyers should also sign a contract with the exact timeframe of the works and delivery date of the new home, including penalties if there are delays on the part of the agency. 

READ ALSO:

But, even when there is complete trust, I think it is impossible to fully restyle an old home from a distance, contacting intermediaries by phone, emails, messages or video calls only. 

Details are key and there’s always something that could be misinterpreted. Buyers based overseas should still follow-up the renovation phases personally, perhaps with one or two flights per year to check all is going well and up to schedule.

Asking to see the costs so far undertaken midway through the restyle is useful to make sure there are no hidden costs or unexpected third parties involved – like buying the most expensive furniture or marble floor when not requested, or hiring a carpenter to build artisan beds.

While there is really no such thing as a hassle-free renovation, these agencies can ease the pressure and do most of the burdensome work – but buyers’ supervision will always be needed.

Read more in The Local’s Italian property section.

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