Aside from the obvious costs of the purchase price and associated financing and mortgage terms, the additional costs involved in purchasing a property in Italy will vary depending on whether you are buying a re-sale property or a new-build, and whether the property will be your primary residence or a holiday home.
For a resale property, you will need to pay Registry Tax on the ‘cadastral’ value – the municipal ‘rateable’ value, which is typically significantly less than the actual purchase price. The cadastral value will usually be 30-50% lower than the purchase price.
If you are buying your home in Italy as your primary residence, your Registry Tax will be 2% of your cadastral value. If your property will be a holiday home, you will pay 9% of the cadastral value as Registry Tax.
Notary fees must always be paid and will be around €2,000- €4,000, depending on the property price. An independent lawyer will generally charge 1% of the selling price of the property for their services, at a minimum of €2,000 + VAT (22%). Estate agent’s fees are also calculated on the actual property price and will generally be around 3%.
The effects of currency exchange rates on the cost of your property and ongoing payments are also a serious consideration that will affect your purchase and ongoing maintenance fees.
There is no Registry Tax on the purchase of new-build properties, but VAT must be paid instead; this is levied at 4% of the purchase price for a primary residence and 10% for a holiday home.
You will also need to think about surveyor/architect (known as a ‘geometra’) fees and utilities suppliers – especially if you are buying a country property without water or anything else connected.
There is also the annual Municipal Tax (IUC) to be taken into account. This consists of three separate taxes:
1. IMU: this tax is paid on the possession of real estate assets. Owners are exempt from paying this on their ‘primary residence’, unless the property has been classified as luxury.
2. TASI: this is similar to Council Tax in the UK, and finances the services provided by local administration. All property owners will have to pay this tax, although in some areas a certain percentage is paid by any tenants. Reductions may be available, depending on circumstance – for example, if the property is a holiday home.
3. TARI: this tax is to fund waste management and must be paid by the person living in a property. Reductions may be available, depending on circumstances.
Please get in touch to let us run through and explain the associated costs of buying and maintaining your dream property in Sicily at every step of the way.