Taxation

Imposta sul Valore Aggiunto (VAT)
This is charged at 10% on all new property except luxury homes, which bear 20%. It is usually included in the advertised price of the property.

Notary Fees
These vary according to the value of the property, the number of pages in the documents prepared and various other factors. They would normally be about £1,500 for a £70,000 house.

Persone Fisiche (IRPEF)
Residents of Italy are subject to income tax on their worldwide income, whilst non residents are subject to income tax only on income arising in Italy, e.g. Rental income from a property in Italy.

A person not resident in Italy for tax purposes must still make an annual declaration of any Italian income.

You do not need to file a tax declaration if you have no income in Italy. If you are resident in Italy, certain relief is available depending on the composition of the family, and the level of your income.

If you let a property in Italy you will be taxed on (usually) 85% of the rental income received. You cannot deduct any further expenses.

If you do not rent out your property in Italy, you will be liable to pay tax on the notional rental value of your property in Italy. This is based on the official rendita catastrale (rateable value). It is normally small. This notional income does not apply where you are resident in Italy and the property is your main home.

Gains made on the disposal of Italian real estate are taxable as income. However, gains on real estate owned by individuals for more than 5 years (or which was inherited) are exempt from capital gains tax in Italy. The main home is also exempt, provided another main home is bought within one year of sale.