Lucca Connections

Frequently Asked Questions

How do I go about purchasing property in Italy?

Once the property has been chosen, there are two main parts of the buying process:

  • The execution of a commitment agreement (compromesso)
  • The execution of the final deed of sale (rogito)

Before signing any document, it is strongly advised to verify the chain of title as well as any easements, liens or mortgages that might exist on the property and the compliance of the property in regards to the planning and building regulations. A surveyor or technician (geometra) may be appointed by the purchaser at any stage to carry out the technical surveys on their behalf (and at their own cost).

By signing the commitment agreement, the purchaser is committed to buy and the seller is committed to sell but in some cases at the outcome of the negotiation process the purchaser may be required to sign an irrevocable proposal binding only for the purchaser. The commitment agreement contains, among others, the date for the execution of the deed of sale, such date being subject to postponement if so agreed between the parties.

It is usual practice to pay a deposit (caparra), with the amount being agreed upon between the parties (usually it's 10 to 20% of the sale price) at the signing of the commitment agreement.

The balance of the sale shall be paid at the execution of the deed of sale (the deposit paid at the commitment agreement will be considered as part of the agreed sale price of the property at the time of the execution of the deed of sale).

The public notary performs the execution of the deed of sale.

What costs are involved when buying property?

A variety of fees (also called closing or completion costs) are payable when you buy a property in Italy.

These fees vary considerably according to the purchase price of the property, professionals involved (attorney, surveyor and mediator) and the 'declared' value of a property, which is usually less than the actual purchase price known as its 'market' value.

The fees associated with buying a property can include a mix of the following:

  • Registration tax (imposta di registro) is the main tax on the property and is levied between 0-10% of the declared value(rendita catastale). The amount payable depends on whether it's your first and only home or a second home.
    • Buyers of new properties(not owned by private individuals, but through the contracting company) DO NOT pay registration tax, but must pay VAT (see below). On your first home, purchased by a private individual, you are eligible for a reduced tax of 3%. This property must be your principal home for residential use and be located in your present county (comune) of residence.
    • Buyers non-resident and those buying second homes is 7%
  • Land registry tax (imposta catastale) is payable on all property purchases. First home resident buyers of new or resale properties pay a fixed fee of €168.00. Buyers of second homes and non-residents pay 1 per cent of the declared price.
  • Value added tax-VAT (IVA): Buyers of new properties must pay VAT, which is levied at 4% for first home resident buyers, 10% for second home and non-resident buyers, and 20% on luxury homes.
  • Mortgage Fees (mutuo) are fees associated with mortgages (spese istruttoria). All lenders charge an arrangement fee for establishing a loan, usually around 1-2% of the loan amount. There's a mortgage tax (imposta ipotecaria) of €168.00 for resident first-home buyers and 2% otherwise, and a fee of 25% (imposta sostitutiva) is payable to the notary (notaio) for registering the charge against the property at the land registry (catasto). Most lenders also impose an 'administration' fee of around 1% of the loan value, and it's obligatory to take out insurance cover with the lender against fire, lightning strikes and gas explosions. The insurance is usually a one-time payment of 21% of the property's value and valid for 20 years.
  • Notary Fees (Notaio) depends on the declared value of the property, on the work involved that can be subject to a surcharge known as 'overheads' levied by all professionals in Italy. All fees are itemized in the notary's invoice. At times, if you buy a home through a building contractor or a real estate agency, there may already be an agreement (notaio convenzionato) with a notary whereby all notary expenses are incorporated into a flat fee which is communicated and agreed to with the buyer. The latter is something to check into in advance.
  • Mediator fees ( provvigione) vary considerably depending on the type of property (luxury) and or location (sea front) (e.g. from 4 to 20%) and are usually shared equally between the vendor and buyer. (i.e. 4% is divided as 2% from the vendor and 2% from the buyer)
  • Professional Fees like attorney, surveyor, geologist, inspection fees are usually from 1 to 2% of the declared price of a property or a fixed fee agreed between the parties involved that depends on the amount of work involved. Professional fees are subject to VAT at 20% and professional tax of 4%. Before signing a preliminary contract, check exactly what fees are payable and have them confirmed in writing. If you are a resident, the fees associated with buying a property in Italy can be offset against income tax.
  • Utility Fees are applied when purchasing a new property. Electricity, gas and water connections and the installation of meters is in addition and normally included in the deed of sale. When buying a resale property, additional costs are applied for new contracts(voltura) normally done after the signing of the deed of sale on a property.

How do I go about doing any work whether renovation or enhancement on the property I just purchased?

When you are dealing with foreign currencies, exchange rates, unfamiliar legal and banking systems, and possibly the rebuilding of a derelict property (and thus with local tradesmen), you need to know where every penny is going ... and how many euros you are getting for your dollar or pound. Lucca Connections can coordinate with getting the finances in place, provide step by step understanding of the legal process from putting in your offer to completion and registering of deeds, assist with settling into your new home, organize the move, employ tradespeople to do work on the house and much more.

How do I go about letting my property?

Lucca Connections meets with the client to view the property to let and to go over the letting process. As a follow-up, a written proposal in the form of a guideline is emailed to the client for approval. The proposal lists in detail the following 3 main points when letting:

  • essential items that make the rental home comfortable and memorable
  • marketing strategy that includes house management services, photo shoot/selection and publication ads to highlight the best asset of the property whether it's the pool, fireplace in the living room, 20 square meter terrace overlooking the city centre etc...
  • targeted services made available to guests to add that certain touch to a vacation.

Once the client has approved the proposal the letting process begins and can be modified before the start of every rental season which is normally from April thru mid-September.

How much does it cost to manage my property all year round?

Because each home is different, Lucca Connections can tailor management services to match the client's specifications. Whether you choose to let the property or to use it for personal use, Lucca Connections can customize a mix of services that best fit client and property needs. Lucca Connections realizes that each client need and property requirement are different and has made available a summarized list of the most requested Property Services those not listed does not mean that it is not provided, BUT can be available upon request and made part of a custom package.

When owning property in Italy, what taxes am I responsible for?

Local Taxes

There are two local property taxes in Italy which are both based on the property's theoretical rental value according to the local land registry, and is adjusted in line with inflation. The rates of tax will vary from region to region due to the varying rates of tax imposed by the regional and local governments.

  • There is a local municipal property tax called Imposta Comunale surgli Immobili (ICI), and is paid by anyone who owns property or land in Italy, whether they are a resident or non-resident. The amount of the tax is calculated by reference to the "rendita catastrale" (official value of the property) registered in respect of all properties in Italy. The official values were, until recently, very very low. They are now rapidly rising, pursuant to a policy of the Italian Government that will result in the official values approaching the real value of the property. It is approximately 0.4% - 0.7% of the official value of the property. The actual rate being decided by the local authority depending on the size of the property, location, class and category. If a property is unfit for habitation it could qualify for a 50% reduction. ICI is paid in two installments in June and December.
  • Some Municipalities raise additional taxation in relation to the services that they supply to people in the area. These may include rubbish collection, cleaning of the streets and beaches etc. Municipalities also have the right to raise a charge for the use of a vehicle in their area. Not all do so. The amounts of these charges are not generally high, and should be between €200 and €250 per year.

Personal Taxes

As a non-resident property owner in Italy, you may be liable for income tax, value added tax wealth tax, capital gains tax and inheritance tax. Individual situations vary considerably and it is best to seek specialist advice from a tax consultant who has knowledge of the Italian tax system.

  • Income tax (Imposta sul Reddito delle Persone Fisiche (IRPEF))
    • A person not resident in Italy for tax purposes must still make an annual declaration for income tax. The Italian Authorities are only concerned with the income you derive from activities in Italy, not your world-wide income. Typical examples of this will be interest on any money you have on deposit with a Italian bank or income you derive from letting your Italian property. If you let your Italian property you will have to declare the income received. You will be able to set off certain expenses against that income - repairs, management expenses, local taxes etc. The residue is taxed at between 19% and 46%, depending on the amount. For most people it will be about 30%. As this income is part of your world wide income it will have to be declared to the country where you live, but double taxation relief does exist as a result of a Treaty between the two countries. You do not need to file a tax declaration if you have no income in Italy.
  • Notional Income Tax
    • There is also a tax to pay upon the notional rental value of your house, even if you do not actually rent it out. This is based on the official rendita catastrale (rateable value). It is normally small.
  • Capital gains tax (imposta sostitutiva sulle plusvaenze)
    • As from January 1st 1993 capital gains tax on the sale of property or land no longer exists, and has been replaced with an annual tax on property called ICI (Imposta Comunale sugli Immobili) which is defined above.
  • Wealth tax
    • Unlike most of the other European countries, there is no wealth tax in Italy.
  • Inheritance tax
    • Both residents and non-resident property owners are subject to Italian inheritance law, with the amount of tax paid varying depending on the relationship between the deceased and the heirs.

Who do I call when I need answers to questions on my property in Italy?

Answers to questions whether simple or complex are researched and confirmed prior to delivering a concise and clear response. Lucca Connections is a one stop business, read About Us and Contact Us for all questions concerning your property.

On Web snc
Home | Contact Us | Privacy Act