Why it’s Thirteen Percent Cheaper to Buy Property in Italy

Published on 25 March 2008
Category: International Property & Living » Property Abroad » Property in Italy

Oh hooray – at last some good news for would-be property buyers everywhere!  There has been a major taxation review in Italy that has resulted in significant and positive changes for the nation’s property market.

As from now it is up to thirteen percent cheaper to buy property in Italy as purchase costs have been slashed, related taxes have been cut and a massive and significant boost has been handed to Italy’s flagging real estate market.

There is of course literally NO denying the appeal of Italy from a property buyer’s perspective.  The nation is stunningly beautiful, it is blessed with a fabulous climate, it is home to some of the best cuisine and finest wine in the world, it is rich in culture and history and the properties available for sale in the likes of Tuscany and Umbria are picture postcard perfect.

Until earlier this month there was of course also no denying that the cost of acquiring such a picture postcard perfect property in Italy was seriously expensive too.  With buying costs reaching a heady height of 17% of the purchase price in some cases and only ever dipping as low as 15%, buying a second home, investment property or retirement pad in Italy was not for the faint hearted.

It seems that the government of the nation was aware of this fact and that the high costs associated with buying Italian real estate were not exactly helping the property based economy in a global environment where buyers are fewer and have less disposable cash to play with.

It’s a fact that the Italian property industry has long been lobbying for a taxation review – and finally their prayers have been answered and their pleas have been heard.  In the latest round of taxation reviews and financial reforms in Italy, stamp duty has been slashed, capital gains tax has been abolished after five years, and even inheritance tax has been cut down to size.

What this can mean for a buyer is that instead of adding around 17% to the purchase cost, stamp duty etc., can be as low as 4% (a saving of up to 13%) - and instead of investors and home owners having to pay as much as 12% capital gains tax upon the resale and realisation of profit on property, if a home is held for five or more years, this tax will no longer have to be paid.

This is fabulous news for anyone thinking about buying a home in Italy or moving to live or work in Italy.  With the cost of buying real estate slashed so dramatically, the news is also likely to bode exceptionally well for the ongoing health of Italy’s property market.

I wonder if the tax cuts were also a factor when Arkady Novikov recently offered three million dollars over the asking price for Gianni Versace’s former Lake Como based Villa Fontanelle?!!

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