“Buyers are often pleasantly surprised by the purchase taxes due on resale property when calculated on the cadastral values which remain low.” says Gemma Bruce, Italy consultant to Aylesford International. “We should point out that cadastral values are continually being revised so this may not remain the case”.
Second home purchase tax
- New build property or restored property being sold by a company under 5 years from completion of works – tax is a VAT of 10% of purchase price
- If the new build/restored property is classified as a luxury property then the vat is increased to the rate of 22% of purchase price (to define what makes a ‘luxury property’ there are a number of definitions but principally to consider are properties exceeding 240 sqm of floor area, properties with a swimming pool exceeding 80sqm and properties located in area which have been identified or designated as areas of luxury properties)
- If you purchase as a company tax is calculated on purchase price – 9% on a resale, 10% on new build
- If purchasing as a private individual on a resale property the tax is 9% of the cadastral value. The cadastral value is an effective book value calculated calculated from the official registration documents for the property held by the Land Registry. The cadastral value from one property to another can vary considerably so probably best to give a couple of examples:-
- Farmhouse in Chianti countryside – cadastral value of €360,000 therefore 9% calculated on 360k. Actual purchase price €1.2m
- Villa in central Florence – cadastral value of €1m, actual purchase price €7.5m
- Coastal villa – cadastral value €780,000, actual purchase price €1.9m
- First home purchase tax:
- 2% of cadastral value of the property if a resale
- 4% of purchase price if new build/restored property purchased from a company.
Stamp Duty Land Tax
“I think the comparative percentage paid in SDLT makes very interesting reading particularly when looking at the 1980s and then today.” says Brendan Roberts, Director and Head of Sales at Aylesford. “The burden on the purchaser is excessive and with such huge costs the result is pressure to reduce prices and a far less mobility and less liquidity in the market”.”