PROPERTY TAXES TO ITALY
How real estate is identified
The Property are identified using the land registry categories assigned by the provincial offices of the Inland Revenue 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. The real estate units belonging to groups ‘D’ and ‘E’ are assigned the relative category and value by carrying out a direct estimation.
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.
Real estate – land and buildings – are subject to taxes that affect their income (Irpef and its supplements), their possession as assets 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.
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
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.
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