Information On Purchasing


The steps for purchasing a house in Italy through PAI are as follows:

Stage 1: Commitment.

The client will take this step when he has a firm interest in the property. When you find a property you like, you will have a meeting with us, and we will go through the entire process and clarify your understanding of all the procedures and costs. During this step the client will pay a down payment of 20% with a minimum of 10'000.00Euro. This deposit will be discounted from the final invoice. This deposit has 2 functions: firstly to put the chosen property 'under offer,' which means that other clients will not be able to visit the property, or to put an offer in for it; and secondly, this deposit allows us to commence the legal transaction of purchase.

If you withdraw from the purchase before the “Preliminare” (see step 3 below) for any reason the sum of 5’000.00 Euro will be not returnable.

If, however, there is an irreconcilable problem with the documentation or the seller withdraws you will get the deposit back in its entirety. During this meeting we shall take a copy of your passport and ask you to sign the necessary documentation to obtain your Codice Fiscale (a legal requirement to purchasing a property in Italy). “Power of Attorney signed in Italy". Power of Attorney (“procura”) is required when the purchaser does not speak fluent Italian, and would therefore not be aware of what they were signing.  To sign a document that you cannot read, or in fact understand is not permitted under the Italian law and thus would make the documentation invalid.

The Power of Attorney enables us to attend and sign the relevant documentation on your behalf. This must be in the Italian form and signed in front of an Italian Notary. This enables PAI to act on your behalf and purchase the property in your name.

Optional: “Power of Attorney signed abroad". If you can’t /don’t wish to sign the Power of Attorney (“procura”) in front of an Italian Notary we can arrange for it to be drawn up and sent to you. You can then print it off and sign it in the presence of a Notary Public in your country. We have contacts with Notaries Public in England, Scotland and Ireland who work closely with us, and so assist our clients to purchase their dream home in Italy.

Stage 2: "Compromesso" or Preliminare di Compravendita (preliminary agreement).

This is the first legally-binding document which states the agreed sale price, the completion date (Rogito-see stage 3) and any information and rights the property has. We arrange for the 'Compromesso' to be drawn up and usually is signed 1-3 months later. Once this contract is signed and the deposit (caparra) of 10% of the purchase price paid, the seller may only withdraw if he pays double the caparra (deposit) amount to the buyer. Should the buyer wish to withdraw, he will lose his deposit in its entirety. It is perfectly normal and legal here in Italy for this stage to be omitted in its entirety, in the event that the purchaser and seller wish the transaction settled faster.    As long as the solicitor and Notary are happy with the documentation available then we can go directly to the Rogito stage.

Stage 3: "Rogito" (Deed of purchase).

The deed of purchase, final contract or 'l'atto notarile': Rogito is signed after the compromesso, and only when all the documentation is available. It is signed by both parties, the balance is paid and the property is officially transferred. We will sign the Rogito on your behalf at the notary's office by way of Power of Attorney (“procura”). When the final contract (Rogito) is signed in front of the Notary and the purchase formalities have been completed, the final balance is due. To enable this sum to be paid, PAI have to be in receipt of clear funds prior to this date. The Rogito will then be presented by the Notary to the appropriate Land Registry for registration.


A break down of costs will be given to you at the onset of your purchase. These figures, however, are for guidance purposes only, and form no part of your contract to purchase through PAI.

Land Registration Tax

The main cost in buying a property is represented by the Land Registration Tax (Italian registration/Stamp Tax). This is the main tax on real property, which is levied at 4% to 19% of the declared value of the property. Usually if you are not resident in Italy you have to allow 11% for urban dwellings, and between 4-19% for rural dwellings. You must be aware of an Italian idiosyncrasy where the declared value of the property, which is the value lodged in the Land Registry, is different from the purchase price. Usually, the declared value for properties of high value is less than the purchase price, and vice versa.

Notary’s Fee

A fee is paid to the Notary for the preparation of the Rogito. This fee varies from town to town and is on a scale related to the declared value of the property. It is approximately 2 - 5% of the value of the property.

IVA/ Value Added Tax (VAT)

This applies only to properties bought from a company or business and replaces the Land Registration Tax. It is 10% of the declared purchase price of the property (for non-luxury properties) and 20% (on luxury homes with a rating A1 in the property register). Usually it is possible apply 10% IVA. This has to be added to the purchase price, as it is not included in the price charged by the builder or developer. If you build your own home you pay a reduced rate of IVA at 4%. When you pay the VAT for properties bought from a company or business, you will not pay the Land Registration Tax which is also 10%. You will pay either Land Registration Tax or VAT (IVA), but not both.

Agency Fee

Our agency fees are available upon request. Services included are: - Preparing the necessary documentation to obtaining the Codice Fiscale; - Completing the necessary paper work and obtain the Codice Fiscale; - Preparing the Power of Attorney to be signed in Italy or emailed to you for signature; - Obtaining the necessary documentation, and delivering this to the solicitor, in order for him to check the title on your behalf; - Referral to a Geometra who are well known to us and can be trusted for their reliability and the thoroughness of their work for checking of parcelization; - Attending the Notaio on your behalf to witness the signing of the Power of Attorney in Italy; - Attending the Notaio on your behalf to sign the Rogito on your behalf; - Arranging and attending the survey on the property (if desired); - Supervision of the entire process and ensuring timely completion of all documents; - Arranging and attending the ownership for the ICI (see running cost of your property below); - Arranging for all existing utility contracts to be transferred to your name.


Annual Taxes.

The “ICI” (Imposta Comunale sugli Immobili) is an annual council tax determined by the size and quality of the property. It is not very high, about 100 - 400 euros, about 0.5 – 0.6% of the Declared Value, and establish by the council (payable once or twice a year).

Refuse/ Garbage Tax. S

mall, about 100-300 euro.


Electricity, water, gas/oil etc for heating, phone, a small fixed fee every two months, plus payment for utilities used.

Condominium expenses.

If you buy a property which is part of a group of properties which share some communal areas – gardens, driveway, swimming pool, tennis court etc. then you will be required to pay condominium expenses. They vary as to the type and size of communal areas on the property.



Real Estate Taxes

How real estate is identified

Real estate is identified using the land registry categories assigned by the provincial offices of the Inland Revenue (previously offices of the Department of the territory or Technical Tax Offices) that are normally reported in the legal documents with which the same real estate is transferred.

Each urban real estate unit belonging to groups ‘A’, ‘B’ and ‘C’ is assigned a category and class according to its internal and external characteristics, and its intended use. After that the official value of the property is determined, by applying the valuation rate defined for each category and class and published in the Official Journal. The real estate units belonging to groups ‘D’ and ‘E’ are assigned the relative category and value by carrying out a direct estimation.


How the official value of property is determined

The official value of property is obtained by multiplying the size of the real estate unit (rooms, square metres or cubic metres) times the valuation rate.

For example, for an apartment belonging to the land registry category A/2, class 5, situated in an average municipality with only one census area, it is possible to identify in the Official Journal a rate that, multiplied by the number of rooms, provides the official value of the real estate property. So, if the rate is of 300 euros and there are 4 rooms then the value will be 1,200 euros.

In order to take account of the cost of living, an established official property value can be ‘re-evaluated’, that is it can be increased by a certain percentage, thus incrementing also the base for the application of taxes.

The official value of property must be increased by 5 per cent.

In the example set out above, the revised official value would therefore be 1,260 euros (1,200 + 5 per cent).

The revised official value also represents the taxable income for the purposes of Irpef (Italian Income Tax on Legal Persons).

The same value, multiplied by 100 in the case of houses (in the example, for a total of 126,000 euros), represents the ‘fiscal’ value of reference for the purposes of applying ICI (Italian tax on Real Estate - falling within the competence of the council).


Enrolment in the Land Registry

Owners must report new buildings to the provincial office of the Inland Revenue within 30 days from the time the building become habitable or in any case suitable for their intended use.

Currently, by using the electronic procedure named DOCFA (Documenti Catasto Fabbricati), the taxpayer suggests the official property value, with the help of a qualified expert.

In case the Inland Revenue amends the official property value already assigned or suggested by the taxpayer, it must notify the interested person of the new value established. It is possible to lodge an appeal against this decision to the competent tax commission, within 60 days of its notification.


Variations and transfers

Whoever must register a document for the transfer property rights of real property or submit a declaration of inheritance (usually a notary or the heir) is also required to lodge a request for transfer to the provincial office of the Inland Revenue, within 30 days of the registration.

The request allows the registration of the land registry documents and the transfer of full ownership or of any other property right.

This obligation can be absolved by public notaries requesting the ‘automatic transfer as per the transcription note’, on the basis of which the adjournment of the land registry documents is directly carried out, with the help of the information provided for the transcription, in the land registry offices.

Should there be variations of an objective character, meaning variations that have concerned, in a permanent way, the type, consistency or intended use of the real estate; the interested parties are required to submit a specific request to the provincial office of the Inland Revenue. This must be done by 31st January of the year following the one in which the works were terminated.

Currently, variations and transfers can be handed in on magnetic storage support, thus allowing the immediate updating of the documents.


Buildings taxation

Real estate – land and buildings – are subject to taxes that affect their income (Irpef and its supplements), their possession as assets (Ici) and their transfer, carried out either by deed between living persons – such as endowment or acquisition – or by inheritance, as well as by usucaption.

In case of transfer on the basis of acquisition, the taxes applied are the registration fee (or alternatively VAT), and the mortgage and cadastral tax. In case of transfer on the basis of endowment (or inheritance), as well as the mortgage and cadastral taxes, the inheritance and endowment duties are owed. The latter varies according to the beneficiaries involved (see “Inheritance and Endowments”).

Please note that, according to the principle of alternativity, for acts subject to VAT the proportional registration fee is not applied. The fixed registration fee, the mortgage and cadastral taxes are in any case owed.

As regards Irpef, the income deriving from real estate is cumulated with the other forms of income of the owner and taxed according to the rates foreseen for this tax (see “Irpef”).

Since Irpef rates are progressive, the same income deriving from real estate can therefore be taxed to a greater or lesser extend depending on the amount of the overall income in which it is included.


Acquisition of real estate

In the event of acquisition of real estate, registration fee is applied or alternatively VAT (depending on the seller) as well as the mortgage and cadastral taxes.

Please note that, according to the principle of alternativity, for acts subject to VAT the proportional registration fee is not applied. The fixed registration fee, the mortgage and cadastral taxes are in any case owed.

Real estate transfers: the taxes owed by the buyer
Private individual VAT No
Register 7%
Mortgage 2%
Cadastral 1%
"non building"company that has not carried out any restoration, improvement or refurbish works

"building" (or refurbishing) company that sells after 4 years from the date of ending the works
VAT Exempt
Register 7%
Mortgage 2%
Cadastral 1%
"building" (or refurbishing) company that sells after 4 years from the date of ending the works or after, in the event that within this deadline the buildings have been rented out for a period no shorter than 4 years, implementing programmes of residential subsidized building; VAT 10%*
Register 168 euros
Mortgage 168 euros
Cadastral 168 euros

* 20 per cent if the building is listed as luxury

For the purchase of the first home special rates are envisaged if certain conditions occur. For further details reference should be made to the specific paragraph that follows.

For purchases of real estate that have taken place after 4th July 2006, even if subject to VAT; the parties must include in the deed a ‘declaration substituting the notoriety act’ in which the following must be indicated:

Any omission, false or incomplete information entails (as well as the application of penal sanctions) a verification procedure for the value of the goods transferred, for the purposes of the registration fee. In short, the Inland Revenue will apply the taxes to the market value of the real estate, even if the parties have requested taxation on the basis of the cadastral value. Moreover, an administrative penalty amounting to between 500 and 10,000 euros is applied. Should the listing in the register of agents on mediation affairs be missing, the notary is also obliged to make a special notification to the Inland Revenue.

How taxes are calculated

Registration, mortgage and cadastral taxes

These taxes (registration fee, mortgage and cadastral taxes) are paid by the notary at the moment of registration.

For the sale of real estate for living (and relative outbuildings) carried out with regard to individuals who do not have commercial, craft or professional activities, the taxable base for the purposes of registration fee, mortgage and cadastral taxes can be provided by the cadastral value of the real estate, instead of the price paid.

It is possible to pay the taxes on the basis of the cadastral value as subsequently determined, on condition that the actual amount agreed for the transfer is indicated in the documents.

In fact the concealment of the price, even only partially, or the declaration of an amount inferior to the one agreed in the deed of sale, envisages the loss of the benefit with the following consequences:

  1. the registration fee and the mortgage and cadastral taxes will be calculated on the basis of the price actually paid;

  2. an additional sanction will be owed, amounting to from fifty to one-hundred per cent of the difference between the tax owed and the tax already paid.

In order to benefit from the application of the registration fee and mortgage and cadastral taxes on the cadastral value of the real estate, the buyer must lodge an explicit request to the notary. The new taxation system also envisages a reduction of 30% of the notary’s fee that, as has been noted, is calculated on the value of the real estate indicated in the document.

This estimate does not include the transfer of all real estate for which the intended use is different from habitation and their outbuildings (land, businesses, offices, etc.).

For those who decide not to avail themselves of the new system, the taxation will continue to apply with the rules previously established which is the application of the taxes on the commercial value of the property (normally represented by the agreed price).

In this case, it is necessary to remember that if the Inland Revenue considers the value of the transferred property to be higher than the one indicated in the document, it will see to its correction and to the liquidation of the larger tax owed (as well as the penalties and interest possibly owed) and will inform the taxpayer with a special notice, within two years from the payment of the proportional tax.

How the cadastral value is determined

The cadastral value is determined by multiplying the cadastral revenue (revalued by 5 per cent) times the following coefficients:

The taxable base for VAT

When the sale of the house is subject to VAT, the taxable base is not given by the cadastral value but by the price agreed and declared in the document by the interested parties.

If however the purchaser has taken a loan or asked for financial assistance from the bank for the purchase of the house, the taxable base cannot be inferior to the amount of the loan or funding supplied.

With regard to these transfers, the rules in force allow the Inland Revenue to directly amend the annual VAT declaration of the seller if the price declared is inferior to the ‘normal value’ of the property.

If there is a loan or bank funding the Inland Revenue is obliged to consider as ‘normal value’ an amount equal to the amount supplied.

Usually, the normal value of the real estate is determined by the product between the surface in square metres resulting from the cadastral certificate (or in the absence of this, calculated specifically) and the unitary value determined on the basis of the real estate quotes of the real estate market observatory and the merit coefficients relative to the characteristics of the real estate.

The quotes of the real estate market observatory are referred to the relative area or, in the absence of this, to the neighbouring or a similar area assessed, at the time of the deed of sale or the moment before the price was agreed with a dated document, and in ‘normal’ conditions of conservation. The merit coefficients relative to the characteristics of the real estate concern in particular the cadastral category, the floor level and the size.

For real estate different from houses the normal value is determined by the average between the minimum value and the maximum value expressed by the real estate market observatory referring to the period of the deed of sale and to the ‘normal’ conservation status for the specific intended use of the real estate assessed therein, in particular ‘shops’, ‘warehouses’, ‘offices’, ‘industrial sheds’, ‘typical sheds’, ‘workshops’, ‘garages’, ‘outdoor car parks’, ‘indoor car parks’, ‘lock up garages’.

For real estate finished or refurbished no longer than four years before, the normal value is determined on the basis of the ‘optimal’ conservation status established by the real estate market observatory or, in its absence, by applying a multiplier of 1.3 to the value determined on the basis of the rules explained above.


The purchase of the first home

For the purchase of the "first home" and its outbuildings special favourable rates are envisaged.

Purchase of the "first home": the taxes owed by the buyer
Private individual NO 3% 168 euros 168 euros
"non building" company that has not carried out any restoration, renovation or refurbish works

"building" (or refurbishing) company that sells after 4 years from the date of finishing the works
EXEMPT 3% 168 euros 168 euros
"building" (or refurbishing) company that sells within 4 years from the date of finishing the works or subsequently in the event that within this deadline the buildings have been rented out for a period no shorter than 4 years according to programmes of residential building 4% 168 euros 168 euros 168 euros

Reductions for the first home are equally entitled for the purchase of its outbuildings, even if this is done with a separate deed, but only limited to one pertinence for each of the following cadastral categories:

Requirements for the benefits

The requirements necessary to benefit from the concessions envisaged for the first home are the following:

For personnel belonging to the Armed Forces and Police Force, the condition of residing in the municipality where the purchased real estate is located is not required in order to benefit from the concession for the first home.

Moreover in the purchase deed the buyer must declare:

If, by mistake, in the deed of sale these declarations have been omitted, it is possible to remedy by way of a specific supplementary deed, written following the same legal formalities required for the previous one, in which it is declared that the subjective and objective conditions required to benefit from the fiscal concessions exist.

Tax credit for buying another first house

The regulations in force envisage the application of a tax credit for persons who have sold their house, previously purchased, enjoying the benefits envisaged for the first house for the purposes of registration fee and VAT, and within one year since the sale, buy another house that is not classified as luxury and that will represent the first house (even if building has not yet terminated).

The tax credit is owed to taxpayers who have not forfeited their benefits concerning the first house, and amounts to the same sum of the registration fee, or VAT, paid in relation to the first facilitated purchase; in any case it cannot be higher than the registration fee or VAT owed in relation to the second purchase.

The tax credit is also owed to those who have purchased the house on the basis of a document subject to VAT before the 22nd May 1993 (and who therefore have not formally benefited from the so called ‘first house’ concessions).

The tax credit can be used:

To benefit from the tax credit the taxpayer has to show his intention to do so with the appropriate declaration in the deed of purchase of the new property, specifying where he/she intends to use it in deduction from the register fee due for the same deed. If, by mistake, the above mentioned declaration has been omitted, it is in any case possible to add said declaration to the original deed. In this case a tax credit is possible, provided that the taxpayer is in possession of the documentation proving the effective existence of the requisites.

When it is not due

As well as the case in which the taxpayer has forfeited the ‘first house’ concession in relation to the previous purchase, the tax credit for buying a new property is not due in the following circumstances:


Sale of a real estate

From the transfer of real estate it is possible that appreciation is generated, that is a positive difference between the payment received in the tax period and the purchase price or construction cost of the property transferred, increased by the costs inherent to the property itself. This value, if deriving from a transfer on a payment basis of real estate purchased or built no longer than 5 years ago, or of building land, is considered as one of the sources of income falling within the category of ‘different incomes’ and, as such, is subject to ordinary taxation with the application of the normal rates for irpef, or in the case of transfer of building land to separate taxation.

The following exceptions are made to this rule:

As regards the taxation of this appreciation, starting from 2006 a substitute system to the one in force has been introduced. The seller, by presenting a declaration to the notary, now has the option of asking at the moment of the deed of transfer, that a tax substituting income tax is applied to the appreciation produced. More specifically, this system envisages that:

The notary him/herself will see to the application and payment of the substitute tax, immediately receiving from the seller the relevant payment, and will communicate to the Inland Revenue the details of the sale.

The taxation system described above (substitute taxation) cannot be requested by the seller when the object of the transfer is a piece of land that has been divided into plots or on which a building has been constructed. Starting from 1st January 2007, taxation applying the substitute rate can no longer be requested when building land is transferred.


Transfer of real estate acquired by endowment

Regarding transfers carried out since 4th July 2006, when the object of the sale is a house acquired by endowment, the appreciation possibly achieved is subjected to taxation if no more than 5 years have passed since when the donor purchased the real estate to the moment it is transferred.

The appreciation subject to taxation amounts to the difference between the price of the transfer and the cost for the construction or purchase sustained by the donor.

This possibility has been introduced in order to avoid evasive manoeuvres on behalf of owners of real estate purchased (or built) for less than 5 years. Previously in fact, they could donate the real estate to a third party who, subsequently, sold it without paying taxes on the appreciation produced.


Deeds to register

Depending on the deadline prescribed for their registration, deeds can be distinguished as follows:

In particular contracts subject to VAT must be registered in case of use (if drawn up in a private deed), provided all the agreements included in the contract are subject to such tax.

Deadlines for the registration of documents
sales of real estate 20 days (from the date of the document)
preliminary contracts
bank guarantee agreements
loading of debts
company transfers
leases of real estate 30 days (form the date of the document)


The registration of lease and rent contracts of real estate

All lease and rent contracts of real estate (including those relating to farms or agreed by individuals subject to VAT) must be registered, whatever their amount, provided their duration is longer than 30 days over the whole year.

The deadline for registration is 30 days from the date of the deed.

The registration fee is calculated and paid by the taxpayer, using the F23 form, within 30 days from the date of the deed and, in any case, before the request for registration. Only in the event that the interested person is required or prefers to have the registration done via the internet, the payment of the fee is made at the same time as the registration of the contract.

How much is paid for the registration
Buildings for habitation use 2% of the annual rent fee multiplied by each annuity
Buildings that can only be used for company activities 1% of the annual rent fee if the lease is agreed by individuals subject to VAT
2% of the annual rent fee, in all other cases
Farms 0,50% of the annual payment multiplied by each annuity
Other real estate 2% of the annual payment multiplied by each annuity

For the registration of lease and rent contracts of real estate, the registration fee cannot be less than 67 euros.

The retainer handed over by the tenant is not subject to registration tax, while the deposit and other forms of guarantee are subject to registration tax (to the amount of 0.50 per cent) if lent by a third party external to the tenancy agreement.

Both the landlord and the tenant are entitled to the payment in equal shares, but they are jointly liable for the payment of the whole amount owed for the registration.

For lease contracts (and sub-lets) of urban real estate of a long term nature, the option to pay the registration fee at the moment of registering is envisaged, measured in relation to the entire duration of the contract, that is calculating 2% of the price owed for the whole duration of the contract, or by annual instalments, applying a 2% increase on the rent relating to each year and taking into account the national statistic increases, within 30 days of the expiry of the previous annuity.

Those who choose to pay the registration fee for the whole duration of the contract can benefit from a discount, which consists in a tax deduction, in a percentage measure, equal to half the legal interest rate (equivalent to 3% starting from 1st January 2008) multiplied by the number of annuities.

6 3%
5 2,5%
4 2%
3 1,5%
2 1%

Should the person concerned choose to pay on a yearly basis, the tax for the subsequent years can even be lower than 67 euros.

If the contract is terminated before the initial time agreed and payment has been made in relation to the whole duration, the payer has the right to be reimbursed for the annuities following the one in progress.

It should be specified however that the reimbursement does not apply to the amount of 67 euros of the fixed fee, which is owed in any case.

For terminations (early cancellations) and transfers without payment of lease contracts and sublets of urban real estate of a long term nature, the fee is paid to the fixed amount of 67 euros.

In all other cases (for example, leases of non urban real estate), the fee is applied (to the measure of 2 per cent) to the amount of rent still owed.

How lease contracts of urban real estate are registered

(in case online registration is not used)


Within 30 days of the date of the deed (or from the starting date, if earlier)


At the offices of the Inland Revenue.


Completing form 69 (available at offices of the Inland Revenue); this needs to be cross-referenced with the press releases and the internet web site of the Inland Revenue.

Submitting at least two copies of the lease contract to be registered with original signatures. Applying a duty stamp of 14.62 euros every 4 pages (100 lines per page) on each copy.


Receipt of payment of the tax

Paying to tax collection agents, banks or post offices an amount equal to 2% of the yearly rent using the F23 form. The tax code to quote when paying for the first annuity is 115T; when paying for the whole period it is 107T.


The receipt of the submission made can be obtained at the counters of the Inland Revenue, while registered copies are available within the time communicated at the moment of submission.