26 ottobre 2007

paolini

Tax benefits, such as in the case of a persons ‘first residential property’.

In order to simplify and encourage the purchase of a person’s first residential property, the Italian law decreases the taxes liable for those who make such a purchase. This is done in a number of ways. Specifically, at the time of purchase, the purchaser pays 3% (registry tax) if they buy from a private party, or 4% (VAT) if they buy from a business or company (with certain exceptions), plus mortgage tax and cadastral duties for a fixed amount (currently equal to a total of €336.00). Foreigners are also allowed to take advantage of the ‘first residential property’ benefits if they meet the same requirements as those for Italian citizens.Foreigners who are legally resident and who are registered in the unemployment office, or who are employed or self-employed, have the right to benefit, under conditions equal to those of Italian citizens, from council residential property and concessional credit loans for construction work, restoration work, purchase and rental if it is their ‘first residential property’.
Other tax relief related to the purchase of the ‘first residential property’ regards rebate (up to a certain amount) on income tax owing on the interest paid on mortgages raised for the purchase of a person’s first residential property.
Finally, revenue produced by a person’s ‘first residential property’ is not subject to income tax.

COSTS EXAMPLE  

We’ve put together an example of the total cost of buying a £350,000 home in Italy, so you’ll get a better idea of how much you can afford. 

The typical cost of buying a £350,000 home with a 70% mortgage of £245,000

Estate Agent’s fees at 2.5% £8,250
Plus, VAT at 20% £3,500
Notaio’s fees £3,500
Lawyer’s fee £5,000
Mortgage registration fee at 2% £4,900
Mortgage arrangement fee at 1% £2,450
Total fees £42,300

These figures should give you an idea how much you need to find on top of the purchase price. They vary according to the type of property you’re buying and whether agent’s fees are split or already included.

For calculating your costs and getting legal advice on purchase procedure please contact us

OFFICIAL ITALIAN TAXATION GUIDE

If you want a complete Italian taxation guide see

It is an useful document from the official web-site of Agenzia delle Entrate (the correspondent office of Inland Revenue Office) which provides an exaustive guide for foreigners in Italy.