Italy

You can enjoy several financial benefits if you purchase a property in Italy as your primary residence. Firstly, the transfer costs associated with buying a first house are significantly lower than purchasing a secondary property. Instead of a 9% tax rate, you will only be required to pay a tax rate of 2%. This can result in substantial savings, especially for more expensive properties.

Another advantage of buying a first house is that you will be exempt from paying the IMU tax. IMU, or Imposta Municipale Unica, is an annual property tax that is levied by local municipalities in Italy. By purchasing a property as your primary residence, you can avoid this additional financial burden, allowing you to allocate your funds towards other expenses or investments.

On the other hand, if you choose to buy a second house in Italy, you will not be exempt from paying the IMU tax. This means that you will have to factor in the annual IMU payments in addition to the 9% transfer tax. Considering these ongoing expenses when deciding is essential, as they can significantly impact your overall financial obligations.

Furthermore, if you purchase the property without a loan, you can benefit from reduced notary fees. Notary fees are typically calculated based on the property's purchase price and can be a significant expense. However, if you are able to purchase the property outright, you can negotiate lower notary fees, resulting in additional savings.

When deciding between buying a property as your primary residence or a secondary property in Italy, it's crucial to consider the financial implications and long-term tax obligations. By carefully evaluating your options and understanding the associated costs, you can make an informed decision that aligns with your financial goals and circumstances.

When submitting an offer for acquisition, it is necessary to provide a small cash deposit to the agency. Upon signing the contract, you can expect to be charged for the services of the real estate agency (provigione) in addition to the costs of the notary. Furthermore, there will be taxes and expenses related to bank loans and mortgages.

The IMU (property tax) amount depends on your reddito catastale (cadastral income), which can be provided to you.

The underlying principle of Italian real estate legislation is that if you are acquiring a property for personal use, a place that will eventually become your home, then the taxes, contributions, and costs will be similar to those in other European Union member states. However, if you are purchasing a property as an investment, the financial aspects may be less favourable.

To set up an apartment or house as your primary residence, you'll need to register your address at the purchased property within the first 18 months after the transfer is finalized. Subsequently, your income will be subject to the Italian tax system.

This means you will be required to pay income tax in Italy based on your worldwide income. It is very important to consult with a tax advisor to understand your obligations and make sure you comply with Italian tax laws.

In addition to income tax, other ongoing expenses are associated with owning a property in Italy. These include the annual property tax (IMU), which is calculated based on the cadastral income of the property. The cadastral income is an estimate of the property's rental value and is determined by the local authorities. The IMU rate varies depending on the municipality where the property is located.

Furthermore, there are also condominium fees to consider if you are purchasing an apartment or a property within a complex. These fees cover the maintenance and management of common areas and services, such as cleaning, gardening, and security.

If you are financing your property purchase with a bank loan or mortgage, additional costs will be involved. These include bank fees, appraisal fees, and mortgage registration taxes. It is essential to carefully review the terms and conditions of your loan agreement and consult with a financial advisor to understand the full extent of these costs.

Overall, acquiring a property in Italy involves various expenses and taxes that should be considered when budgeting for your purchase. You should seek professional advice from a real estate agent to ensure a smooth and informed transaction.

 

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