Purchasing a home represents a significant milestone, particularly in a picturesque location like Sardinia. This enchanting island is renowned for its breathtaking landscapes, vibrant culture, and lively coastal towns. However, prospective buyers must first understand the financial implications, especially the various taxes and fees associated with property acquisition.
This article examines the key factors involved in purchasing real estate in Sardinia, with a specific focus on Alghero, a town that attracts numerous buyers. It will outline the costs related to home buying and offer insights into the fiscal responsibilities linked to property ownership.
Understanding property taxes in Sardinia
When considering a property purchase, such as a 90 square meter apartment in the Lido neighborhood of Alghero priced at €210,000, buyers should be aware of the applicable taxes. The tax regime depends on whether the seller is a private individual or a construction company, as well as whether the property will serve as a primary residence or a second home.
First home versus second home considerations
For those buying from a private seller intending to use the property as a primary residence, the registration tax is set at just 2% of the cadastral value. If the cadastral value is around €90,000, this results in a registration tax of €1,800, in addition to approximately €100 for mortgage and land registry fees, totaling around €1,900.
In contrast, if the property is classified as a second home, the registration tax rises to 9%, leading to a total cost of approximately €8,200, including the same fixed fees.
When purchasing from a construction company, VAT applies. The rate for a first home is 4%, while for a second home it can range from 10% to 22%, depending on various factors. For the aforementioned example, the VAT on a first home would amount to €8,400 (4% of €210,000), plus an additional €600 in fixed taxes.
Ongoing property costs after purchase
After acquiring the property, it is essential to consider the annual taxes tied to homeownership, even if the property is not occupied. Generally, property taxes for a primary residence are not applicable unless classified as a luxury property. However, owners of a second home must account for the IMU tax.
Calculating annual IMU taxes
For example, if the reassessed cadastral value of your second home is €100,000 and the standard rate in Alghero is 1.06%, the annual IMU tax would be approximately €1,060. Additionally, the average annual maintenance costs for a 90 square meter apartment occupied by two individuals can range from €280 to €350, resulting in total annual expenses of approximately €1,300 to €1,500 for a second home.
Investment opportunities and taxation on rental income
Owning property can also serve as a lucrative investment opportunity. If you plan to rent your apartment as a vacation rental during the summer months, be prepared for taxation on the generated income. You can choose between the IRPEF tax regime or a flat tax rate of 21% known as the cedolare secca. For instance, if your summer rental generates €10,000 in income, you would owe €2,100 in taxes under the cedolare secca option.
Additionally, if you sell the property within five years of acquisition, you may incur a capital gains tax on the profit from the sale, set at 26%. For example, if you buy for €210,000 and later sell for €240,000, this results in a profit of €30,000, leading to a tax of €7,800, unless exemptions for primary residences apply.
This article examines the key factors involved in purchasing real estate in Sardinia, with a specific focus on Alghero, a town that attracts numerous buyers. It will outline the costs related to home buying and offer insights into the fiscal responsibilities linked to property ownership.0
This article examines the key factors involved in purchasing real estate in Sardinia, with a specific focus on Alghero, a town that attracts numerous buyers. It will outline the costs related to home buying and offer insights into the fiscal responsibilities linked to property ownership.1