Changes In Rules For Purchasing Property In Italy

From the first of January 2006 new finance laws are in operation concerning the buying and selling of residential property between private individuals. According to the new rules the buyer can now declare the actual sales price in the notary act of sale but pay taxes only on the revalued cadastral value. The notary fees will be calculated on the real sales price but a discount of 20% will be given. As the cadastral value is invariably much lower than the market value this system provides a sensible way of making the property market more transparent and will be invaluable in combatting money laundering.

Where a vendor is selling within five years of purchase and will therefore have to pay capital gains tax on the profit made, there is an incentive to encourage declaration of the real price. Anyone in this position will pay 12.5% on the gain instead of the usual average of 30%. This is to discourage vendors from underdeclaring the price received.

Where a property has been purchased with the ‘prima casa’ discount a sale within five years will still bring about repayment of the saving plus a fine.

The actual rules are complex and this is by nature a superficial summary. We will be happy to discuss the matter in greater detail with interested parties.

See also: La Dolce Vita