TAXATION OF REAL ESTATE ACQUISITION IN ITALY

Starting from February 24, 2022, from the beginning of the full-scale aggression, our compatriots began to withdraw significant monetary assets from Ukraine. Most of them consider the possibility of investing funds in order to preserve and increase them.

As you know, real estate is one of the most common and traditional types of investments. However, when carrying out such a procedure, questions arise as to how it is taxed.

First of all, it is important to understand that the costs of purchasing a real estate object depend on the criterion of "primary" or "secondary" housing. Let's consider each of the categories in more detail.

1. Primary (main) housing – Prima Casa

In the case of purchasing an object from an individual:

• a) VAT is not charged;
• b) registration tax (imposta di registro) - 2% of the cadastral (estimated) value of the property (but not less than €1,000);
• c) fixed mortgage tax (imposta ipotecaria) – €50;
• d) fixed cadastral tax (imposta catastale) – €50.

In case of purchase of the object from the developer within 5 years from commissioning:

• a) VAT – 4% of the value of the real estate stipulated in the contract;
• b) fixed registration tax – €200;
• c) fixed mortgage tax – €200;
• d) fixed cadastral tax – €200.

It should be noted that when buying a primary residence, you need to register it as the main place of residence within 18 months from the date of purchase. In the event of non-fulfillment of such a requirement of the legislation or as a result of the sale of housing during the first 5 years of ownership, you will have to pay a levy to the Italian budget, which will consist of the difference in taxes (which were not paid as a result of the "primary" property), a fine of 20-30% of this amount, as well as administrative costs for maintenance recovery payment procedures.

2. Secondary housing – Seconda Casa

Purchase of an object from an individual or from a developer after 5 years of commissioning:

• a) VAT is not charged;
• b) registration tax – 9% of the cadastral (appraised) value of the property (but not less than €1,000);
• c) fixed mortgage tax – €50;
• d) fixed cadastral tax – €50.

Purchase of the object from the developer within 5 years after the completion of construction:

• a) VAT – 10% of the real estate value;
• b) fixed registration tax – €200;
• c) fixed mortgage tax – €200;
• d) fixed cadastral tax – €200.

Regardless of the procedures described above, the following payments (fees) apply:

• 1) Stamp fee – €230;
• 2) Mortgage payment – €35;
• 3) Cadastral fee for property re-registration – €55;
• 4) Payment of notary services (about 0.8–1.2% of the real estate value).

Thus, investing in real estate in Italy is a very profitable investment option, since the incoming payments are relatively small and allow you to increase your assets over time. It should be emphasized that the procedure contains a sufficient number of nuances, therefore, for additional information and clarifications, contact the lawyers of JK "Prykhodko and Partners".