PropertiesHidden costs of buying property in Italy

6 June 20230

Unmasking the hidden costs of buying property in Italy

Do you dream of buying a picturesque villa in Tuscany or a quaint apartment overlooking the canals of Venice? Italy, with its rich history, culture and cuisine, is indeed an interesting case for those considering buying real estate.

But before you pack your bags, it is essential to understand the hidden costs of buying property in Italy.

1. Hidden costs of buying property in Italy: Acquisition costs and taxes

Just as elsewhere, buying property in Italy involves a number of upfront costs. These typically include legal fees, notary fees, and, of course, taxes.

But what some buyers may overlook is that taxes vary depending on whether one intends to become a resident or whether the property is a second home.

Non-residents can expect to pay taxes of up to 9 percent of the cadastral value of the property, a value fortunately much lower than the actual market value. If the property is your first home and you plan to settle within 18 months of purchase, you will enjoy a much lower tax rate of 2%.

2. Hidden costs of buying a property in Italy: renovation

It can happen that you fall in love with a charming, century-old Italian property only to discover that it is in dire need of renovation.

Many historic properties in Italy require considerable work to meet modern housing standards. Renovation costs can range from a few thousand euros for minor cosmetic work to hundreds of thousands for significant structural repairs.

Before purchasing, it is always a good idea to conduct a thorough investigation to avoid unexpected renovation costs.

3. Hidden Costs of ownership

Owning property in Italy is not cheap. Annual property taxes, known as IMU, can range from 0.2 percent to 0.76 percent of the cadastral value of the property, depending on the municipality.

Added to these are the service tax, or TASI, and the garbage collection tax, or TARI. Don’t forget to consider the cost of utilities, condo fees, if applicable, and insurance. Also, if you do not plan to live in Italy year-round, you will likely need to hire a property manager.

4. Buyng a property in Italy: Selling costs

Selling a property in Italy also has its costs, which are often overlooked at the time of purchase.

You may need to pay an agent’s commission, which typically ranges from 3 percent to 8 percent, and various taxes.

Capital gains tax in Italy, if you sell within five years of purchase, can be heavy. However, if you keep the property for more than five years, you are exempt from this tax.

Now that we have taken off our rose-colored glasses, it is clear that buying property in Italy involves hidden costs: much more than just the list price.

But don’t let the hidden costs of  buying property in Italy discourage you from pursuing your dream.

By doing your homework, understanding the costs and seeking professional advice, you will be well prepared to navigate the Italian real estate market.

Do you need help to buy a house in Italy?

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