Buying Abroad with Family. A Guide

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Buying property abroad with family can be a good way to spread the burden

The Overseas Guides Company Ltd. has published a guide to buying abroad with family. As they say, “ a holiday home is perhaps the most life-enhancing thing you will ever buy. It helps you get to know and love another culture. It can be more relaxing than a package holiday to the tourist sites – a holiday whenever you want it, forever, and to pass on to your children. […]”

“A holiday home abroad has the power to keep families together. Siblings might fight like cats and dogs as children, but many find they appreciate each other’s company more as they get older. Every Christmas you promise to see each other more often, but by the summer you’ve drifted apart again. For older children who don’t want to go on the usual family holiday, for students who don’t come home as much anymore, a holiday home can be the glue that holds the family together. […]”

BUT:

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We’ve all heard about families that fall out over money. How can you protect yourself, your investment and your closest relationships?

You need legal protections that will endure down the generations. Read on for some great advice on this, from specialist lawyers. […]

“There are many ways to structure the legal aspects of ownership, and the one you choose will depend on your own family circumstances and preferences. Whoever pays the most might call the shots, for example, or the head of the family might retain control.”

“The crucial thing is that you do put in structures, and that you genuinely intend to follow them. Good fences make good neighbours, so all parties should work on the assumption that in the end you may fall out and end up in court arguing over the letter of the agreement, even if that is the last thing on your mind right now, in the excitement of buying. For example, is a loan really a loan or does one sibling “sort of” think it might be a gift? Is time being shared equally or does one of you really think they own it more than the others”?

“As years go by, memories fade and new family members come onto the scene, so it can save many problems down the line if you get everything in writing, and remember you have done so”.

Buying abroad with family. The three most important considerations from a legal point of view are ownership, payments and inheritance

We asked some trusted overseas lawyers for suggestions on legal structures for the deal. […]”

Giandomenico De Tullio of De Tullio Law Firm in Italy says that, one solution would be for the head of the family to buy the property: “In Italy it would be advisable to structure the investment in the following way: grandma and grandpa would purchase the ‘usufruct’ [lifetime right of use] assigning to their children the bare ownership. When the grandparents pass away, the children will acquire full ownership of the property without the need to manage the Italian succession procedure.”

Finally …

Read the full Guide to buying abroad with family Or get in touch with us at info@detulliolawfirm.com

COPYRIGHT & DISCLAIMER
First published in Great Britain in 2017 by: The Overseas Guides Company Ltd, 26-28 Hammersmith Grove, London, W6 7BA
Copyright © The Overseas Guides Company Ltd, 2017

 

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Preliminary Contract in Italy. Can I Back Out of It?

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You rather rushed into signing a preliminary contract on an Italian property

Now you need to back out of the preliminary contract.

You rushed into signing because you didn’t want to miss out on a great opportunity. It’s long been your dream to own a property in Italy. When you saw this penthouse apartment, you just had to have it.

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In hindsight and after viewing the apartment again, you realise it isn’t as big as you thought. When you first saw the place, you could see the potential to extend into the roof space. However, you now doubt that the municipality will grant permission to convert the space. Besides, you recognise that even if your planning application is accepted, the conversion is going to be prohibitively expensive.

The date for signing the deed of sale is looming. What can you do?

Can you back out of the preliminary contract?

Does the property have a certificate of habitability?

A recent judgment at the Court of Appeal of Milan, stated that if the seller does not deliver a certificate of habitability at the preliminary contract stage, the prospective purchaser may back out of the preliminary contract and, request the return of the deposit.

In other words, there will be no requirement for the prospective purchaser to complete on the sale. In addition, it may also be possible to seek compensation for damages. If, for example, there is proof that the purchaser has incurred expenses or lost out on other property prospects.

Finally …

Never rush into signing any paperwork relating to an Italian property purchase. Always seek independent legal advice before signing anything and, if you’ve already signed a preliminary contract but now want to or need to back out of it, get in touch with us. We have over 55 years expertise in Italian property law.

 

You may also like to read Preliminary Contracts in Italian Property Purchases.

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Buying a House in Italy Can Be A Nightmare

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When buying a house in Italy, before you sign any paperwork, seek professional advice

Buying a house in Italy is a serious investment and often the fulfilment of a dream. Italy’s unique real estate laws and local customs all lead to the recommendation of having the right team of advisors in place to make your experience successful.

A couple from Bristol found a house in the Abruzzo that they wanted to buy. The vendor’s real estate agent got them to sign a Proposta di Acquisto (reservation offer).

The estate agent passed the reservation offer to the vendor. The offer basically stipulated the price the couple was willing to pay for the property. It included the couple’s cheque for a €5000 deposit, made payable to the vendor. The vendor accepted the couple’s offer, took the cheque, and the deal became irrevocable. The estate agency also asked the couple for their brokerage fee of 3% of the purchase price, which they immediately paid.

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The couple then discovered that the charming outbuilding with self-contained accommodation had no planning permission. Getting the building regularised would entail fees for a geometra (surveyor) and tax to the local municipality. The outbuilding would be subject to a demolition order if the permit was not granted. The couple even faced the risk of prosecution for illegal construction. The vendor had no intention of remedying the situation and there was no recourse for the couple. The couple was stuck in a nightmare scenario and yet, the whole thing was easily avoidable.

Teamwork makes the dream work

As a foreigner buying a property in Italy, before you sign any paperwork which may be legally binding, make sure you have the right team of advisors working for you.

Choose your own geometra to assess the integrity of a building’s structure. Check whether planning permission exists and, if necessary, what the costs would be for putting things right. You may also want to ask a geometra about the geology of the location. How prevalent are natural hazards such as landslides or earthquakes?

Engage your own lawyer. Your independent legal advisor will examine titles, zoning matters and review all paperwork associated with buying a property. A lawyer can save you money by helping you negotiate the deal and will ensure your rights are protected.

Italian law requires that all property and land transactions complete through a notary. Notaries work for the Italian State to ensure that transactions happen in accordance with Italian law. They ensure that purchasers pay all the relevant fees and taxes and register the deed of sale. Choose your own notary.

Independence is key when buying property in Italy

We cannot emphasise enough the importance of seeking independent advice. Choose your own professionals. While the estate agent or vendor may recommend professionals with whom they cooperate, you should bear in mind that estate agents and vendors have a vested interest in selling the property to you.

Finally …

At De Tullio Law Firm, in addition to full conveyancing services, we offer a property background check. This is a  pre-purchase service, which identifies and prevents problems such as the ones encountered by the couple from Bristol.

Likewise,  for those looking to sell their Italian property, we can help you prepare a pre-sales package that includes all the paperwork potential buyers will be looking to gather prior to making a purchase decision.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. If you would like to discuss your situation or, if we can be of assistance, please get in touch.

 

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Italian Estate Tax

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Italian estate tax (imposta di successione)

Although the government abolished Italian estate tax in 2001, it subsequently reintroduced it in 2006.

Italian estate tax is therefore applicable to succession cases prior to October 25, 2001 and those from October 3, 2006 onwards.

In order to comply with the fiscal rules of inheritance law, heirs need, in the first instance, to file a statement of succession with the Italian tax authorities.

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Who is liable for Italian estate tax?

If the deceased was resident in Italy at the time of death, Italian Inheritance Tax applies to the deceased’s worldwide assets. However, if the deceased lived outside Italy, Italian estate tax is only payable on assets located in Italy.

Of course, in order to prevent issues with double taxation, Italy has a number of cross border taxation arrangements in place, including with the UK and the USA.

Unity of inheritance

Italian inheritance law is based on the principle of ‘unity of inheritance’. To clarify this, the law of the country of last domicile deals with any movable assets. Movable assets could, for instance be furniture, cars, jewellery, works of art, bank and post office current accounts, money, investments such as shares, bonds, trust and managed funds. For immovable assets the law of the country where they are located is applicable. Examples of immovable assets include houses, shops, buildings, agricultural or building land.

How does Italian estate tax work?

In terms of payments, Italian estate tax appears less onerous compared to some other EU Member States. It is nevertheless complex.

In effect, Italian estate tax applies to the net value of the deceased’s estate. This therefore, includes not only movable but also immovable assets.

In addition, equity in non-family businesses and shareholdings in companies are taxable. However, there are exceptions to this.

Indeed, because the range of taxable assets is so broad, it is important to review the balance of ownership of your assets in the above mentioned categories. Above all, if you have children or you stand to inherit assets from an Italian estate.

It may moreover, also be worthwhile considering property ownership changes to protect your assets. In addition, some careful estate planning for the transfer of assets within the family is crucial.

Italian estate Tax on property

As far as a property is concerned, it is important to bear in mind the income value of Italian real estate property. This is calculated on the capitalised cadastral annuity.

In order to ascertain the cadastral value of a property, re-evaluation coefficients are as follows.

– Agricultural land: €112,50

– Buildings – Cat. C/1 and E: € 42,84

– Buildings – Cat. A/10 and D: €63,00

– Buildings – Cat. B: €147,00

– Other buildings: €126,00

– Habitable buildings, primary residences and relative appurtenances: €115,50

Depending on the relationship to the deceased and the category of assets, tax is applied proportionally to individual heirs or legatees.

The table below summarises quotas and exemptions from inheritance tax relating to Italian real estate property.

BENEFICIARY INHERITANCE TAX ASSET CATEGORY REGISTRATION TAX CADASTRAL TAX
Spouse, civil partner and/or Children Value of assets & rights: 4%

Below €1 million value, tax-exempt.

 Primary Residence

Other property

Other assets

 €200

2%

–

 € 168

1%

–
Siblings Value of assets & rights: 6%

Below €1 million value, tax-exempt.

 Primary Residence

Other property

Other assets

 €200

2%

–

 € 168

1%

–
4th Degree Relative Value of assets & rights: 6% Primary Residence

Other property

Other assets

 €200

2%

–

 € 168

1%

–
Other Value of assets & rights: 8% Primary Residence

Other property

Other assets

 €200

2%

–

 € 168

1%

–

Furthermore, in accordance with the Italian Disabilities Act, the threshold from which disabled beneficiaries are liable for inheritance tax is €1.5 million.

Furthermore, quotas mentioned in the table above also apply to lifetime use (usufruct) of a property title deed.

Are there any exclusions from Italian inheritance tax?

As previously mentioned, according to Italian inheritance tax law, certain categories of assets are exempt from Italian inheritance tax. These include government bonds and unit linked whole of life insurance policies. Additionally, shareholdings in family businesses and certain charitable donations are exempt.

EU regulations 

Choice of law

In addition to Italian inheritance law, it is also worth mentioning EU succession regulations introduced in 2015.  In brief, these regulations provide testators with an opportunity to mitigate the Italian principle of unity of inheritance.

As a result of EU succession regulations, non-Italians who are resident in Italy can make a choice of law in their will. In other words, a testator can stipulate that they want the law of their own country, or nationality, to govern their Italian-based assets.

Furthermore, EU regulations do not restrict the choice of law to EU nationals resident in Italy. For example, a US national could nominate US law to apply to the succession of their property in Italy.

It should however be mentioned, that nominating a country law needs careful consideration. It would be prudent to seek advice before taking action. A testator needs to take in to account certain matters. These include foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights with respect to an estate.

European Certificate of Succession

In order to facilitate cross border successions, an additional benefit of the EU succession regulations is the European Certificate of Succession. While this document is issued by the relevant authority dealing with the succession, heirs, legatees, executors and administrators of an estate can use it to prove their status and thereby exercise their rights or powers in other EU Member States.

Finally …

As can be seen, Italian inheritance is a complex matter. While there are actions that you can take to mitigate the impact of Italian inheritance tax law on estates, because each case is different, you should seek professional support and advice.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you have any estate tax questions or if would like to discuss your situation.

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Your Overseas Home Events

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Your Overseas Home. Regular events that help people buy and move overseas safely

Your Overseas Home Property events help people buy and move abroad safely.

Property Guides and The Overseas Guides Company (OGC) regularly run these free events around the UK.

Kim Brown founded OGC. Kim’s parents had bought a home in Cyprus in 2004. However, without access to the right information and with some contacts who turned out to be untrustworthy, it sadly ended unhappily.

Seeing the impact on her parents, Kim determined not to let this happen to anyone else. She therefore decided to set up OGC to provide high-quality, carefully researched guidance for anyone buying their dream home abroad.

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Buying a property overseas can be stressful and daunting

With this in mind, the Your Overseas Home and Smart Currency Exchange teams have created these exclusive events to reduce the stress and risk for people interested in buying properties abroad. Buyers have the opportunity to :

– browse a selection of properties that might suit requirements.

– ask questions to property experts

– discuss budgets and tactics to reduce risks of purchasing in a foreign country

– attend useful seminars hosted by property, legal and currency experts.

Generally several countries are represented at these events, including Italy.

Your Overseas Home. The Italian team

Your Overseas Home events include leading Italian estate agents, currency, Italian law, finance and removals experts.

De Tullio Law Firm has participated at a number of Your Overseas Home events. Along with other Italian property experts, we respond to a wide range of questions and provide tailored guidance to make the purchase of Italian property as smooth as possible.

As well as seeing plenty of Italian homes, you have the time and opportunity to discuss your personal requirements and get advice on all aspects of buying a property in Italy.

Finally …

If you would like to attend the next Your Overseas Home event, we’ll keep you posted if you follow us on our  on Facebook and our other social media channels.

If you can’t get to a Your Overseas Home event but would like some expert guidance, why not get in touch with us?

 

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The New York Times. Reciprocal Legislation

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The New York Times: Nationals from some countries face restrictions when buying property in Italy

In a recent article about buying property in Italy, The New York Times interviewed De Tullio Law Firm about reciprocal legislation. “Because of reciprocal legislation, citizens of some countries face restrictions when buying real estate in Italy, but those from the United States, Canada, Britain and Australia are not among them”, said Giandomenico De Tullio, a partner at the De Tullio Law Firm.

What is the reciprocal legislation referred to in The New York Times?

Sovereign laws, set by individual countries, have always been applicable when it comes to property purchases. If you buy property in Australia for example, Australian laws are applicable. Likewise in Canada, the USA and elsewhere.

Australia, Canada, the USA and Italy are all members of the World Trade Organisation who have signed up to the General Agreement on Trade in Services (GATS). Commitments made by signatories allow nationals to purchase properties in each others’ countries. This is known as reciprocity. There are, therefore, no barriers regarding market access or treatment of foreign purchasers.

Reciprocal commitments within GATS establish a quid pro quo principle

Essentially, you can invest in Italy so long as your home country allows Italian nationals to invest there. In other words, ownership of real estate, establishment of companies, the acceptance of inheritance or gifts are not conditional on citizenship.

However, purchasing property or setting up a company in Italy does not automatically confer the right to reside in Italy. Nor does it automatically confer the right to work in Italy. To become resident or work in Italy, you will need to obtain an Elective Residence Visa and permits.

Finally …

If you are considering buying a property anywhere in Italy, you might find our property guide useful. You should always seek independent legal advice. At De Tullio Law Firm we are specialists in cross border and Italian property law. If you would like to discuss your situation, please get in touch. We are here to help.

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Holding Accounts in Italy. Property Completion funds

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Keep your property completion money safe

On 29th August 2017, Italian legislation saw the introduction of holding accounts. The legislation governing payment for the purchase of Italian residential and commercial real estate is part of the Italian Law of Competition.

The law aims to provide better protection to both property buyers and sellers.

Holding accounts are applicable to funds for the completion of the purchase of Italian property. Deposits connected with a reservation offer and preliminary contracts are not subject to this legislation.

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The buyer and/ vendor must request their chosen notary to use a holding account. In other words the notary doesn’t automatically use holding accounts.

In addition, the buyer can request the notary to keep funds in a bonded account. Again, the onus is on the buyer to specifically request that the notary use bonded holding accounts. As this may generate problems with the seller, we would recommend that the preliminary contract include a clause that all parties authorise the notary to hold completion funds in bonded holding accounts.

How do holding accounts work?

The buyer acquires legal ownership of the property at the signing of the deed of sale. However, by using a holding account, the notary will delay payment until after registration of the deed.

Following signature by all parties to the transaction, the notary has 30 days to register the deed of sale with the relevant land registry authorities.

Once registration of the deed takes place, the buyer can be certain that the purchase has been completed smoothly. Tranfer of funds to the vendor can then take place.

Keeping funds in holding accounts therefore provides protection to the buyer between signing the deed of sale and its registration.

Between signing and registering the deed, adverse entries pertaining to the property can come to light. Issues might include outstanding debts, mortgages, encumbrances, court applications for seizures and foreclosures.

The Law of Competition states that when purchasing property, all outstanding payments by the buyer to the seller should be kept in dedicated holding accounts belonging to a notary. This sum also includes any amounts the vendor may require to settle liabilities. For instance, the vendor may still be paying off a mortgage on the property. In this case, the buyer would pay the entire balance of payment for the property into the notary’s holding account. However, a part of this will serve to redeem and cancel the vendor’s mortgage lender once the purchase is complete.

Do all notaries have holding accounts?

The Law of Competition stipulates that a notary must have a holding account in which the notary can receive funds from clients for the delayed payment of real estate property.

A notary has no entitlement to any interest accruing to these holding accounts. Nor can a notary use funds for any other purpose than the payment of a particular property.

Furthermore, if a notary has debts, creditors can not foreclose on money deposited in holding accounts. Should the notary die, any funds in holding accounts do not constitute part of the notary’s estate. And in the event of death, funds do not form part of the notary’s matrimonial property regime.

Finally …

If you are looking for further information about the Italian property purchasing process, you might find our comprehensive guide helpful, or if you need independent legal advice,  please get in touch for a free consultation.

 

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Reserved Acceptance – Italian Inheritance

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Debts on an Italian inheritance

Accepting an Italian inheritance also implies taking on responsibility for any debts the decedent leaves. Heirs risk having to paying any debts they inherit from their own pockets. For this reason, Italian law confers a choice of whether to renounce or accept an inheritance. There is however, also a third way to mitigate risks: reserved acceptance. To illustrate the concept of reserved acceptance, below we provide a brief case study on this matter.

Silvia and Eric Jones owned a property in Liguria and were resident in Italy for many years. Sadly, in close succession, Silvia and Eric died.

The Jones’ sons, Larry and Tom, got in touch with De Tullio Law Firm about their parents’ Italian Wills. They had concerns regarding what happens when heirs are unsure exactly what they are inheriting. Larry and Tom believed that their parents had a lot of debts. They worry they will have to pay these debts if they accept the inheritance.

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Because heirs have the possibility to accept an inheritance using reserved acceptance – “beneficio d’inventario”, it means that Larry and Tom will only be liable to pay their parents’ debts on any sum they inherit.

What is reserved acceptance?

If you are an heir, but you are unsure whether the inheritance contains more liabilities than assets, you can use, “beneficio d’inventario” (reserved acceptance). This avoids any merger between your estate and the decedent’s. Thus you will not be liable to pay off the decedent’s debts with your own money.

If, for example, you inherit €10,000, compared to a debt of €20,000, you will only be liable to pay the debt on the sum you have inherited, namely the €10,000.

Reserved acceptance is however not a good idea if an heir is certain that liabilities outweigh inherited assets (unless the heir wishes to pay debts in order to honour the decedent’s memory). Where certainty of debt exists, renouncing the inheritance is a more appropriate solution.

It is worth mentioning that certain people have to accept an inheritance through “beneficio d’inventario”. These people include minors under the age of eighteen, people in care and legal entities, including the State, associations and foundations.

How does reserved acceptance work?

You need a notarial deed for reserved acceptance. Alternatively, you can make a declaration to a clerk of the court in the district where the decdent had their last domicile.

Finally …

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

If you are unsure about any aspect of an Italian inheritance, please contact us. We will be happy to provide you with more detailed information.

What is a Biotestamento (Living Will)?

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A living will, biotestamento, allows a person to make decisions about medical treatment

Biotestamento legislation in Italy is in two parts.

The first, more general part, deals with giving informed consent on medical treatments. The second part of the law specifically provides for a number of DATs (disposizioni anticipate di trattamento).

What are biotestamento (living will) DATs?

DATs allow a person to indicate wishes in relation to medical treatments in the event s/he is no longer conscious due to an accident or illness.

Every adult over the age of 18 years old, of sound mind, who does not expect to be capable of self-determination in the future, may make use of DATs. By filling in the relevant paperwork, a person expresses his/her wishes relating to medical treatments. These include consent or refusal of artificial hydration and feeding.

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DATs are legally binding on medical staff unless they are manifestly inappropriate or non-compliant with the patient’s current medical condition or new therapies have become available since the person signed DATs.

DATs must be in the form of a notarised deed or as a certified private instrument.

Informed consent

The law on Biotestamento protects a person’s right to life, health, dignity and self-determination. It stipulates that no medical treatment may start or continue without the patient’s freely given and informed consent. All patients have the right to know their health conditions. Furthermore, they must receive exhaustive, up to date and comprehensible information about the diagnosis, prognosis, benefits and risks of diagnostic tests and of prescribed medical treatments. In addition patients have a right to understand any alternative treatments available and the consequences connected with refusal of treatment.

Possible interruption of artificial feeding and hydration

Every adult, over the age of 18 years old, of mind, has the right to fully or partially refuse any treatment or to revoke consent for treatment at any time. Feeding and hydration are comparable to medical treatments. It is therefore possible to refuse them or request that they stop.

Refusal of treatment and conscientious objection by doctors

The patient has the right to refuse medical care. Doctors can however conscientiously object to this. Therefore, if a patient refuses medical care and a doctor deems this will cause death, a doctor is under no professional obligation to fulfil the patient’s wishes. The patient, however, may turn to another doctor working in the same hospital or healthcare facility.

Futile medical care and deep sedation

A doctor must endeavour to alleviate a patient’s suffering. Even if the patient has refused to grant or withdrawn his/her consent to medical care. Where there is a short life expectancy or imminent death prognosis, the doctor must, however, abstain from unreasonably persisting in dispensing medical care. In case of illnesses resistant to medical treatments, with the patient’s consent, the doctor may resort to continuous deep palliative sedation associated with pain therapy.

Psychological support

Should the patient decide to revoke or refuse medical care, the doctor must inform the patient of the consequences associated with this decision. The doctor must also inform the patient about any possible alternative treatments. In addition, medical staff should promote all actions to support the patient, including psychological support services.

Minors and disabled persons

In order that they can express their wishes, minors and disabled persons must receive all information in an appropriate manner. Informed consent on medical treatments for minors is contingent on consent or refusal by the parents or legal guardian. However, the patient’s wishes must also be considered.

Fiduciaries

A patient may also appoint someone to represent them in all relations with doctors and medical facilities.

Finally …

At De Tullio Law Firm, we have over 55 years of expertise with managing cross border succession and estate planning matters throughout Italy. In addition, our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

If you need any advice regarding living wills or last wills, we are here to help. Please get in touch with us.

 

 

Italian Tax. Buying A House in Italy

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Local property and service taxes


This article aims to provide an overview of rules pertaining to Italian property tax and legislation. We outline aspects of legislation and certain taxes which are part of the Italian Stability Law. These measures aim to lower tax burdens and bolster the Italian property market. 

While the government has announced the elimination of the local property and service taxes on principal residences in Italy and added the elimination of property and regional taxes on production and fixed machinery in the agricultural sector, those who own second and or holiday homes and real estate in Italy, will still pay local property and service taxes.

We recommend that you check your Italian property tax liabilities. If you need any assistance with your particular case, our legal and tax team are here to help. 

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Italian Tax on Property

Currently, cadastral values of Italian properties are still much lower than market values; appraisals in use date back some years. The declared cadastral value of a property on the deed of sale (Rogito) determines the calculation (base imponibile) of Stamp Duty, Land Registry and Cadastral taxes. VAT will apply to the property purchase price if you buy a property from a developer or a renovation company within 4 years following the end of building or renovation work.

Principal residences

Other than a luxury home or castle, if you purchase an Italian property to use as your principal residence:

– from a private seller or an entity that is not VAT registered and,

– you obtain Italian residency at the property within 18 months of signing the deed of sale and,

– you subsequently spend more than 6 months a year at that address,

stamp duty is 2% of the value of the property with € 1,000 as the minimum payment due. Land registry and Cadastral Taxes are €50 each.

If you buy your Italian property from a VAT Registered company, VAT is 4% of the declared property price. Stamp Duty, Land Registry and Cadastral Taxes are €200 each.

Second homes

If you buy a second home from a private owner or a company that is not VAT registered, Stamp duty will amount to 9% of the property purchase price, with €1,000 as a minimum payment. Land Registry and Cadastral taxes are €50 each.

If you purchase a second home from a VAT registered entity, VAT is set at a standard rate of 10% (22% for properties classed as luxury homes or castles) of the purchase price, and you will pay €200 each for Stamp Duty, Land Registry and Cadastral taxes.

To summarise Italian property taxes:

Italian Capital Gains Tax

There is no Capital Gains Tax liability if you purchased the property more than 5 years prior to resale.

Finally …

Italian property and related tax is quite complex. For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice. We offer services in all the major fields of Italian law with particular expertise in real estate, inheritance and family law matters. If you would like further clarifications regarding your situation, please contact us for a free consultation. We are here to help.

You may also like to watch our info videos about Italian property law.