Italy is a popular destination for many foreigners who want to buy a home, either as a primary residence or as a vacation retreat. However, the purchasing process involves several tax implications and opportunities for benefits that are good to know to optimize costs.
In this article, we will explore the main taxes and benefits available to foreigners who buy a first home or a vacation home in Italy.
Buying a First Home in Italy
The purchase of a first home in Italy, both by Italian and foreign citizens, benefits from important tax breaks, provided that certain requirements are met.
Requirements for first home benefits
To obtain the tax breaks, the foreigner must:
Declare that they will establish residency in the municipality where the property is located within 18 months of purchase.
Not own other homes in the same municipality purchased with first home benefits.
Not have already benefited from the benefits for the first home in Italy (or commit to selling another home purchased with these benefits within 12 months).
Reduced taxes for first homes
If you meet the requirements, the taxes on the purchase are significantly reduced:
Registration tax: 2% of the cadastral value (instead of 9%).
Mortgage and cadastral taxes: 50 euros each.
VAT (if you buy from a construction company): 4% (instead of 10%).
These benefits also apply to foreigners, provided that their country has a reciprocity treaty with Italy (for non-EU citizens).
Buying a Holiday Home in Italy
Holiday homes are a popular choice for those who want to enjoy the beauty of Italy throughout the year or as an investment for short-term rentals. However, the first home benefits do not apply to this type of purchase, and the taxation is generally higher.
Taxes on the purchase of a holiday home
Registration tax: 9% of the cadastral value.
Mortgage and land registry taxes: 50 euros each if purchased from a private individual.
VAT only if purchased from a construction company: 10% and 22% for luxury properties.
Annual taxation on holiday homes
IMU (Single Municipal Tax):
IMU is mandatory for second homes. The rate varies from 7.6‰ to 10.6‰ of the cadastral value, depending on the municipality.
TARI (Waste Tax): calculated based on the surface area of the property and the number of occupants.
Tax Deductions and Bonuses for Foreigners
Regardless of whether it is a first home or a holiday home, foreign buyers can access the tax bonuses available in Italy.
Renovation Bonus
50% deduction of expenses incurred for renovation work, up to a maximum of 96,000 euros per property unit.
Ideal for those who buy properties to renovate, especially in historic centers or villages.
Ecobonus
Deduction of up to 65% for energy efficiency interventions, such as replacing windows, installing solar panels or improving thermal insulation.
Superbonus 110% (until 2025 with limitations)
For energy requalification or anti-seismic works, the Superbonus allows you to deduct 110% of the expenses incurred, transforming them into a transferable tax credit.
Incentives for villages and rural areas
In some Italian regions, buyers of properties in historic villages or rural areas can access regional or municipal contributions. Some municipalities even offer houses for 1 euro, requiring a commitment to renovation.
How to manage taxes if you are a foreigner
To simplify tax management, it is advisable to:
Obtain the Italian tax code, essential for any real estate transaction.
Open a current account in Italy to facilitate payments.
Rely on a notary and, if necessary, an official translator, to ensure full understanding of contracts and regulations.
Conclusion
Buying a home in Italy, whether as a first home or a holiday home, offers numerous opportunities for foreigners. Tax breaks, combined with bonuses for renovations and energy improvements, make the Italian real estate market an interesting investment.
To maximize the benefits, it is essential to rely on expert professionals who can guide you in managing Italian taxes, bureaucracy and regulations. Whether it is an apartment in the city, a villa by the sea or a rustic house in the countryside, Italy awaits you with its unparalleled charm and unparalleled hospitality.
Contact me marzia@grifalconi.com and I will help you realize the dream of living in Italy!
