Taxes and costs when buying a property in Italy.

Buying a property in Italy involves a number of taxes and transaction costs that sit alongside the agreed purchase price. While the framework is well established, it can feel unfamiliar to international buyers, particularly when purchasing rural properties or buildings in need of restoration.

This article provides a clear overview of how purchase taxes work, when they are paid, and why, in many cases, the effective tax burden may be lower than expected.

A brief overview of the purchase process

From a practical perspective, a property purchase in Italy typically unfolds in three main stages:

• Agreement on price, often followed by a written offer

• A preliminary contract (preliminare), usually accompanied by a deposit

• The final deed (atto di compravendita), signed before a notary, at which point ownership is transferred

Purchase taxes and most transaction costs are settled at the time of the final deed. Understanding how they are calculated in advance helps buyers budget accurately and proceed with confidence.

How purchase taxes are calculated

In Italy, purchase taxes are not always calculated on the declared purchase price.

For many private residential transactions, the law allows registration tax to be calculated on the cadastral value of the property rather than on the contractual price. This system is known as “prezzo–valore” and is applied by the notary when the relevant conditions are met.

The cadastral value is a fiscal value derived from the property’s cadastral classification and registered income. In many cases, particularly with older rural buildings, it is significantly lower than the market price.

Why this is particularly relevant for rural properties and ruins

All properties curated by Green Heart Restorations are rural in nature and typically require restoration.

In these contexts, cadastral values are often modest, reflecting the age, condition, and historic classification of the buildings. When the prezzo–valore mechanism applies, registration tax calculated on this basis can be considerably lower than if it were applied to the full purchase price.

This is not an exception or a loophole, but an established part of the Italian tax system, routinely applied by notaries in qualifying transactions.

When the prezzo–valore mechanism applies

The application of prezzo–valore depends on the nature of the transaction and is confirmed by the notary at the time of purchase.

In practice, the rural properties and ruins typically curated by Green Heart Restorations are most often acquired from private owners and are therefore subject to registration tax rather than VAT. In these cases, the prezzo–valore mechanism is generally applicable.

Transactions involving VAT (such as purchases from certain developers or corporate sellers) are far less common in this segment of the market. In all cases, the notary determines the correct tax basis and applies the appropriate rules as part of the deed process.

A note on “Prima casa” benefits

Italian law also provides reduced purchase taxes for buyers who qualify for prima casa (primary residence) benefits. These depend on personal circumstances and residency requirements and are assessed on a case-by-case basis by the notary.

For many international buyers, these benefits may not apply. However, even outside the prima casa regime, the standard tax framework (including prezzo–valore where applicable) already provides a structured and often favourable basis for calculating purchase taxes.

Topics such as visas and residency are addressed separately in our Insights section; where required, Green Heart Restorations can provide initial guidance and introduce clients to experienced international professionals for specialised tax or immigration advice.

What taxes and costs should buyers expect?

From a buyer’s perspective, purchase-related taxes and costs typically include:

• Registration tax
  This is the principal tax and, for non–primary residences, is generally applied at 9%.
  In most private residential transactions, the taxable base is the cadastral value of the property (prezzo–valore) rather than the declared purchase price, resulting in a lower effective tax burden. Where prezzo–valore does not apply, the tax is calculated on the contractual value.

• Cadastral taxes and administrative charges
  These are fixed, low-value charges and usually represent a negligible portion of the overall purchase costs.

• Notary fees
  These vary depending on the transaction but are clearly itemised and agreed in advance.

In practice, the registration tax represents the only materially significant tax component, with the remaining items having a marginal financial impact.

How Green Heart Restorations supports clients

As part of our Property Scouting Package, Green Heart Restorations coordinates early technical and cadastral checks on selected properties, allowing key issues to be identified before a purchase decision is finalised.

Throughout the acquisition process, we work closely with the appointed notary to help clients understand how taxes and costs are calculated and when they are payable, ensuring clarity from the outset.