Purchasing a second home in Italy represents a significant investment, accompanied by unique financial responsibilities, particularly related to taxes. For individuals considering this venture, understanding the tax implications of owning a non-primary residence is essential. This guide outlines the various taxes involved, ensuring you are well-prepared
for this commitment.
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.
Tax obligations when buying a second home
Buyers acquiring a property that will not serve as their main residence should be aware
of the applicable tax rates. Generally, taxes on a second home are higher than those for primary residences. Specific rates may vary depending on whether the purchase is made from a private seller or a company, and whether the seller is subject to VAT.
Taxes when purchasing from a private seller or a VAT-exempt company
If you opt to buy a property from a private individual or a VAT-exempt company, you will be liable for
the following taxes:
- Registration tax:9% of the cadastral value (with a minimum fee of €1,000)
- Mortgage tax:€50
- Cadastral tax:€50
In this scenario, the registration tax constitutes the most significant expense, calculated based on the cadastral value rather than the sale price.
Taxes when purchasing from a VAT-subject company
If you purchase from a construction company subject to VAT, the tax structure differs:
- VAT:10% (or 22% for luxury properties)
- Registration tax:€200
- Mortgage tax:€200
- Cadastral tax:€200
Here, both the registration and cadastral taxes are fixed amounts rather than percentages.
Calculating cadastral value and taxes
The cadastral value plays a crucial role in determining the taxes applicable to your second home purchase. This value is derived through several steps:
- Determine thecadastral income
- Increase the income by 5% for valuation purposes
- Apply a multiplication coefficient
For second homes, the coefficient used is 126, applicable to properties classified in categories A (excluding A/10) and C (excluding C/1).
Example of cadastral value calculation
To illustrate, consider a property with a cadastral income of €1,000. The calculations would proceed as follows:
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.0
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.1
Ongoing taxes for non-resident owners
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.2
- IMU:always due, even if the property is unoccupied
- TARI:municipal tax for waste collection services
- IRPEF or flat tax:applicable if the property is rented out
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.3
Understanding cadastral taxes on second homes
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.4
When acquiring a second property, tax rates differ markedly from those applied to primary homes. Familiarizing yourself with these distinctions can help prevent unexpected expenses and facilitate informed decisions. Below, we explore the key taxes associated with purchasing a second home in Italy.5