Costs of buying in Italy
While Italy is a relatively affordable place to buy property, especially by UK and US standards, there are additional costs that you’ll have to consider on top of your property purchase price.
Some of these fees are unavoidable, like taxes and notary fees. Others can be reduced, if not avoided, by being aware of your options.
Typically, the additional costs in Italy can add between 10-15% on top of the final purchase price of an Italian property.
Property purchase taxes
The costs involved in buying a property in Italy will vary depending on various criteria, including property type. Your lawyer should be able to give general advice on the kind of taxes you will pay, before you buy.
The notary will be collecting the taxes and so will also be able to tell you what you must pay. They can suggest solutions resulting in tax savings, such as the benefits of purchasing a main residence. However, qualified advice from a financial advisor may be sensible too – there may be circumstances individual to you as an overseas buyer. You don’t want to pay too much, after all.
There are four main taxes when buying a property in Italy:
- Stamp duty (imposta di registro)
- Cadastral tax (imposta catastale)
- Land registry tax (imposta ipotecaria)
- VAT and other fees
Stamp duty, cadastral tax and land registry tax are applied on the “cadastral declared value” of the property on the rogito (deed of sale). The cadastral value of a property is often much less than the property price.
What you’ll pay
Stamp duty in Italy varies between 2% and 9% of the cadastral value of the property. However, it depends on who you’re buying it from and if it will be your primary residence or not.
What is a primary residence?
A primary residence is a property that you take up residency in within 18 months of signing the deed and spend more than six months of the year living in.
If you’re buying a primary residence (prima casa) from a private seller, stamp duty will be 2% and land registry and cadastral tax are fixed at €50 each. Total: 2% of purchase price + €100.
If you’re buying a primary residence from a VAT-registered company, you’ll pay €200 each for stamp duty, cadastral tax and land registry tax. Total: €600
Secondary residences
If you’re buying a second home or holiday home from a private seller, the stamp duty will equal 9%. Land registry and cadastral tax are fixed at €50 each. Total: 9% of purchase price + €100
If you’re buying a secondary residence from a VAT-registered company, you’ll pay €200 each for stamp duty, cadastral tax and land registry tax. Total: €600.
Top tip: If you plan to become a resident in Italy, inform the estate agent and Notary before purchasing your chosen property. If you plan to make your Italian home your main residence you will only pay 2% stamp duty when you purchase the property, as opposed to 9% for a second home.
The following table will help you work out what you’ll pay in cadastral tax and land registry fees:
| Buying from a private owner or company not applying VAT | Buying from a company applying VAT | |||
| Primary home | Second home | Primary home | Second home | |
| Stamp duty | 2% | 9% | €200 | €200 |
| Land registry tax | €50 | €50 | €200 | €200 |
| Cadastral tax | €50 | €50 | €200 | €200 |
| VAT | 4% | 10%* | ||
*22% in the case of a luxury home
Professional fees
You will also need to pay fees to the key players who assist you with the purchase of your property, including the notary and estate agent:
- Notary (notaio): Notary fees depend on the specifications of the transaction and the rates applied by the notary. For a standard property purchase, the fee is typically set based on a sliding scale related to the property sale price. Budget for a rough guide price of €1,500–€3,000 or 1–2.5% of the property value.
- Estate agent (agente immobiliare): Both the buyer and the seller pay a commission to the estate agent. They usually charge 3% of the purchase price plus VAT (22%). The commission is usually due to the agent as soon as the purchase offer is accepted. However, you can negotiate on their commission and when it is paid. Most will accept payment on completion.
- Translator (traduttore): Cost of the translator who is present on the day of signing to translate the deeds into your own language before you sign it. This may not be necessary depending on your own and others’ language skills. Approximate costs are between €250 – €350.
- Lawyers (avvocato): There isn’t a flat rate for lawyer services in Italy as costs are usually set by the firm and vary depending on the level of service required and the seniority of the lawyer involved. We recommend you enquire with several firms for a rough quote before settling on who you’d like to use.
Currency costs and risk
If your home currency isn’t the euro, you’ll need to consider foreign exchange to be able to purchase your Italian property in euros.
When budgeting for your Italian property purchase, bear in mind that the headline exchange rate, the “interbank rate”, you see on the news and internet, isn’t available to the general public.
We recommend you use a specialist currency (FX) company.
There are two reasons for that. The first is that with a currency provider you will receive a rate as close to the interbank rate as possible, usually within 2%, and usually with no fees over a certain amount or commission charge.
Secondly, currency specialists can offer services unavailable to high-street banks and app-only services cannot.
Property Guides recommends Smart Currency Exchange. Based in Hammersmith, London, the business specialises in large overseas transactions and has over 20 years of experience assisting overseas buyers.
Plus, they offer a service called a Forward Contract, which allows you to “lock-in” today’s exchange rate for up to 12 months. This can be extremely handy for those who want to ensure the price they’ve agreed to pay in euros won’t fluctuate and cost them more money in three months’ time.
Also, bear in mind that all costs linked to the property price in euros will also increase if the currency rate goes against you. It’s simply not worth the gamble.
Bank charges and mortgage fees
Bank charges and mortgage fees can add up. For a mortgage, this may be rolled up into the mortgage, but either way is likely to add around 1-2% of the loan amount.
There may also be the mortgage opening commission, which can range between 0.5% and 2% of the capital loaned. Remember, these costs can often be negotiated with the bank, so don’t hesitate to discuss these terms.
Utility connection fees
Towards the end of your buying journey, you’ll want to set up the utilities in your new home to ensure everything is in working order when you get there. These will include water, electricity, broadband and perhaps telephone and gas. If they’re already connected, you may only need to pay a small fee to change the name on the registered account.
We advise you shop around for alternative suppliers to see what brand offers the best value for money.