Purchase Tax
A one time only purchase tax will be payable at the time of the final contract. The rates vary not only based on the place of residence declared to the Italian State by the purchaser, by also by the type of property being purchased. For a property registered with the local housing authority as residential only, a tax rate of 3% is applied if the house is declared as for use as primary residence and 10% if the house declared as a second home (Also in the case of those wishing to declare non-resident status). In addition, these taxes are subject to the standard Italian sales tax (IVA or VAT) of 20%. This figure is based on the declared price of the property.
If the property will be used in an agricultural capacity (In the case of a farm estate or agriturismo), then the purchase tax is 11% for resident first home buyers, and 18% for second home and non-resident foreign buyers, plus the 20% sales tax applied to the tax figure. It should be noted that in the case of a country house, the main parcel of land containing the house is registered as residential, while the outlying land is registered as agricultural.

Capital Gains tax
If the purchase of the property is listed as a primary residence purchase subject to the lower 3% tax rate and is then consequently sold within 5 years of purchase, the owner is liable to pay the difference between the 3% purchase tax paid and the 10% tax rate levied on second homes, plus a fine of 30% of the profit (the difference between the purchase price and the subsequent sales price), because the purchase is considered by the Italian State to have been speculative. In the case that the house being sold was purchased by a non-resident or as a second home, subject to the higher 10% tax rate, then only the 30% fine on the profit is collected. Land registered agriculturally is subject to the same penalties, and the difference between 10 and 18% will be collected by the State, with a 30% fine due on the sale profit amount.

The fine imposed on primary residence “speculative” buyers amounting to 7% is cancelled in the case that another principal residence is purchased in Italy within one year of the sale.

Annual Council Taxes
1. A tax called I.C.I. (Imposta Comunale Immobili), approx. 0.6% on the declared price of the property, is payableon an annual basis. This tax is paid in two instalment during the course of the year.

2. Local rubbish collection tax. (Rifuti Solidi Urbani)

3. A tax on the use of the local aquaduct system is levied on those properties connected to the mains water supply.

Residency
In order to receive the lower tax rate, the purchaser must declare to the Italian authorities that they will be personally using the property for a significant amount of time during the year. A foreign purchaser will need to obtain a Permit of Stay from the relevant police authority, the Questura. Documentation requirements vary based on the nationality of the applicant. For further information about eligibility and personal income tax implications, please visit the website of your home country’s Italian Embassy.