The real estate Agent Piemonte Houses will collect all documents concerning the contracting parties and the properties and necessary for the conclusion of the sale (cadaster and mortgage information, maps and floor plans, acts of purchase, building permits and other certificates) and will transmit them to the Notary who, after effecting further checks on his own behalf (absence of mortgages, claims, covenants etc), will establish a deed by which the title to the property is officially transferred from one party to another. At the signing of the deed the Buyer pays the balance of the agreed purchase price to the Seller; the Buyer also pays, directly to the Notary, the Notary’s fees and all taxes and duties. In the Italian legal system, a real property can be legally sold and bought in two ways only:
- Notary Deed;
- A Private Authenticated Contract.
A Notary Deed is a public contract established by a Notary who thus takes responsibility for its contents. A Notary will let the contracting parties sign the contract only after having read it aloud in their presence and made sure that all parties concerned have fully understood it. Should one or both paries experience any problems understanding the Italian text, they may request that the deed be translated into a languague of their choice by a sworn tanslator registered with an Italian court. The additional cost is borne by the party which has requested the translation.
Some non-resident buyers who do not speak Italian and who prefer to avoid the additional cost of a sworn translation, resort to the Private Authenticated Contract as a form of transferring title to real property. In this type of contract the role performed by a Notary is theoretically limited to ascertaining the identity of the contracting parties and authenticating their signatures, whilst it is left to the contracting parties’ will to freely agree on and to take full resposnibility for the contents of the contract. In practice it is usually still the Notary who drafts the contract and who performs all necessary factual checks, applying the same procedure that is followed when preparing a public deed. Notaries with whom our Agency cooperates will supply a draft of a Private Contract which can then be translated by one or both contrating parties by their own means.
Real Estate Taxes
All tax obligations arising from a real estate transaction are on the Buyer’s account. Based on current legislation, the tax burden on real property transactions varies according to the legal status of the contracting parties and the applicability of tax reductions.
- Residential Property Transfer between Inidividuals (Natural Persons)
- if the tax reduction for “First Home” owners applies: a registry tax of 2% of the cadaster value of the property with a minimum tax of 1000 euros (which in most cases is considerably lower than the agreed sales price) + € 100 of fixed duties (50 euros of mortgage duty and 50 euros of cadastral duty);
- if the tax reduction for “First Home” owners does not apply: a registry tax of 9% of the cadaster value of the property (with a minimum tax of 1000 euros, as above) and fixed duties of 100 euros (50 euros mortgage duty and 50 euros cadastral duty);
- Residential Property Purchase from a Corporation (Legal Entity)
- if the tax reduction for “First Home” owners applies: VAT amounting to 4% of the agreed sales price of the property plus registry tax, mortgage duty and cadastral duty of 200 euros each, 600 euros in total.
- if the tax reduction for “First Home” owners does not apply: 9% of the agreed sales price of the property (22% VAT on properties belonging to the A/1, A/8 and A/9 caadastral categgories, so called “luxury properties” like villas, castles etc). And additional fixed amounts of 200 euros for registry, mortgage and cadatsral duties, 600 euros in total;
For the purchase of agricultural land holdings:
- buyers who do not qualify as farmers or professional agricultural entrepreneur pay a 15% registry tax on the value of the holding, plus fixed amounts of 50 euros for transcription and cadastral duties, for a total of 100 euros. Stamp duty does not apply.
- Buyers who are farmers enrolled in the farmer social security scheme or professional agricultural entrepreneurs pay a regsitry tax of 200 euros, a transcritpion duty of 200 euros and 1% of cadastral duty, Stamp duty does not apply.