Tax Implications of Selling a House in Italy: A Guide for Italian Tax Residents
Selling property in Italy as a tax resident involves several important tax considerations that can significantly impact your financial planning. Whether you’re selling your primary residence or a second home, understanding the tax implications can help you avoid unexpected liabilities. Here’s a comprehensive guide that explains the key tax aspects you need to know.
1. Capital Gains Tax on Property Sales
- Primary Residence: If you sell your primary residence (where you have lived for the majority of your ownership period) after five years, you are exempt from capital gains tax. However, if the sale takes place within five years of purchase, capital gains tax may apply unless the property was used as your main residence during that period
- Second Homes or Investment Properties: For second homes or investment properties, the capital gains tax rate is 26% if the property is sold within five years of purchase. This tax applies to the profit made from the sale. After five years, no capital gains tax is owed
2. Additional Costs Associated with Property Sales
- Notary Fees: In Italy, both the buyer and seller typically share the cost of notary services, which can vary depending on the property value and region.
- Energy Performance Certificate (EPC): Selling property requires a valid Energy Performance Certificate (EPC), which costs around €200, depending on the property size
- Registration Tax for First-Time Home Sales: If you sell a property purchased with first-home tax incentives (like the "prima casa" tax exemption) within five years, you may lose these benefits and be required to pay the difference in taxes
3. Tax on Inherited Properties
If you sell an inherited property within five years of receiving it, you may be subject to capital gains tax, calculated based on the market value or the value declared in the inheritance documents. After five years, no capital gains tax is owed, regardless of how the property was acquired
4. Tax Benefits for Selling After Five Years
A key benefit for Italian tax residents is that, once you have owned a property for more than five years, no capital gains tax applies, regardless of whether it is a primary residence or second home
Why Choose Move to Dolce Vita?
Navigating Italy's complex tax system can be challenging, especially when dealing with property sales and capital gains taxes. Move to Dolce Vita is here to simplify the process for you. As experts in Italian tax and legal matters, we provide personalized advice to help you maximize your tax benefits when selling property in Italy. Whether you're selling a primary residence, second home, or inherited property, our team will ensure you comply with the latest regulations while minimizing your tax burden.
At Move to Dolce Vita, we specialize in assisting expats, high-net-worth individuals, and global citizens with their Italian tax and legal needs. Our tailored services are designed to provide peace of mind, ensuring that you make the most of Italy's tax advantages.
