In Part Four of Buying in Italy, we’re looking at how to buy in Italy. You’ll find out the key players to involve, plus what to consider on the financial side. This can seem complicated, but, with a clear understanding of the process in your head, it should all go smoothly.

How to buy in Italy: raising finance

A crucial element of how to buy in Italy is the financial aspect. You need to work out how much you can spend and what your sources of finances are. Do you have savings, will you have money from the sale or re-mortgage of your UK property? You’ll also need to factor in the costs.

Available funds

Calculate how much money you have in total to make the purchase. This could be from cash, savings, assets you sell, pension drawdown or investments that you can cash in.

Additional finance

If you’re considering buying with a mortgage, have a talk to an IFA and a bank or other lender to get pre-approval. Work out how much deposit you’ll have, and how you’ll service the monthly repayments. Make sure to have a contingency plan for emergencies like illness or unemployment. Working out how to buy also means considering your assets; could you use equity release or remortgaging?

Continuing finance

Remember that you’ll have costs to cover after the purchase, like property taxes, travelling expenses and maintenance. Plan how you’ll cover them.

Factor in, too, the constantly changing exchange rates. A pension or investments paid in pounds won’t necessarily come out at the same value each month in euros unless you use a forward contract to lock in an exchange rate.


For anyone permanently relocating to Italy, it could be beneficial to move your pension overseas into another scheme. This could be a self-invested personal pension (SIPP), or a Qualifying Recognised Overseas Pension Scheme (QROPS). There will be conditions, but, generally, you could get greater control over your pension and cut down your tax bill. Remember that the UK will only let you make the transfer itno thse schemes if you meet particular criteria.

Just as crucially, do remember that you need ten years of being non-resident and having moved the pension for a QROPS to show any real benefits.

Getting a mortgage

With interest rates so low, it’s no wonder that many buyers choose to borrow to invest in Italy’s property market. To apply, have the following to hand:

  • Income tax declaration for the past two years
  • Bank statements from the past year
  • Payroll or other proof of income for the past six months
  • A list of mortgage loans already held
  • A statement of your assets and liabilities, confirmed by an accountant
  • A copy of your passport

How to buy in Italy: costs

The costs involved in buying a property in Italy will vary depending on various criteria and you should seek qualified advice as to which apply to your circumstances, to ensure you pay the correct taxes.

The following situations all affect the costs:

  1. Whether the property is bought from a construction/renovation company or is a resale from a private individual.
  2. If the actual purchase price or the cadastral value are to be used in calculations.
  3. Whether you are buying with a mortgage.
  4. If you intend to become a resident or use the property as a second home.
  5. If it is a luxury property or currently uninhabitable.
  6. If you have a mortgage.

The four most common scenarios:

1. Registration tax (imposta di registro)

You pay 2% of the cadastral value of the property, if you are buying a resale that is not a luxury property (Catasto registration category A1, A8 or A9), from a private individual and are going to use the property as your main residence and apply for residency. (Minimum €1000).

The cadastral value (valore catastale) is the property value on record, rather than the purchase price actually paid. This is can be around 50% lower than the purchase price and so by applying the tax on this amount it saves you money on registration tax.

  • VAT (IVA): 0%
  • Mortgage Tax (imposta ipotecaria) : €50
  • Cadastral Tax (imposta catastale): €50 (Land registry tax)

To get this “First Home Tax Reduction” you must declared it in the title deeds and on completion you are required to declare that you are either already registered as a resident or will become a registered resident within 18 months after the purchase (The property will be your “Prima casa”).

2. Registration tax

You pay 9% of the *cadastral value if you are buying a used home that is not a luxury property, from a private individual, to be used as a second home. (Minimum €1000)

  • VAT: 0%
  • Mortgage Tax: €50
  • Cadastral Tax: €50

3. Registration Tax

You pay €200 if you buy a non-luxury property from a building contractor or renovator and are going to use the property as your main residence and apply for residency.

  • VAT: 4% of the purchase price
  • Mortgage Tax: €200
  • Cadastral Tax: €200

4. Registration Tax

You pay €200 if you buy a non-luxury property from a building contractor or renovator and are going to use the property as a second home.

  • VAT: 10% of the purchase price
  • Mortgage Tax: €200
  • Cadastral Tax: €200

Tax on land

Registration tax: 12% for the purchase of agricultural land by persons who are not farmers or professional agricultural operators registered with the relevant pension and welfare funds. Registration tax on non-agricultural land is 9% of the price of the property declared by the parties in the deed of conveyance.

  • Mortgage Tax: €50
  • Land registry tax: €50

How to buy in Italy: key players

Notary (notaio)

The Notary fees depend on the specifications of the transaction and the rates applied by the notary. For a standard property purchase the fee is typically set based on a sliding scale related to the property sale price. Budget for a rough guide price of €1500 – €3000 or 1-2.5% of the property value.

Discover the key players who will help you buy. How to buy in Italy.

Discover the key players who will help you buy.

Translator (traduttore)

Cost of the translator who is present on the day of signing to translate the deeds into your own language before you sign it. Approximate cost between €250 – €350.

Estate agent (agente immobiliare)

Both the buyer and the seller pay a commission to the Estate agent. They usually charge 3% of the purchase price plus VAT (22%). The commission is usually due to the agent as soon as the purchase offer is accepted. However, you can negotiate with the agent on his commission and when it is paid. Most will accept payment on completion.

Capital gains tax on resale (plusvalenza)

In general, if you sell a residential property more than 5 year after purchase, there is no Capital Gains Tax to be paid in Italy. If you sell within 5 years of purchase, 20% capital gains tax is due on your net profit. However, if you purchase a property under the “First Home Tax Reduction” agreement, and use it as your permanent home, there is no Italian capital gains tax if you sell it within 5 years as long as you buy another Italian property under FHTR within a year, or pay the tax difference.

Download the Italy Buying Guide today

The Italy Buying Guide walks you through each stage involved in buying property in Italy, and offers invaluable insights from expats and experts who understand the process. The guide will help you to:

  Ask the right questions
  Avoid losing money
  Avoid the legal pitfalls
  Move in successfully

Download your free guide to buying in Italy

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