If you are thinking of buying property in Venice, you can be assured that Venice Sotheby’s Realty will show you only the best and most discreet properties on the market, full of character yet meeting the needs of the international buyer in terms of size, position and quality, in a city that continues to be one of the world’s most desirable and luxurious locations.
Italy is well-known for its red tape and this of course can include property transactions, but in fact the system of purchase is quite straightforward and safe. For example, “gazumping” is not possible, as the deal is formally agreed at an early stage.
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Generally, there are three steps to buying a property:
The buyer acknowledges that he sees the property and makes an offer. The buyer then gives the agent a deposit cheque for 1% of the price offered. If the seller accepts the offer, he shall notify the purchaser. It is at this stage that the offer of the buyer becomes effective and binding for both parties.
Buyer and seller sign a contract to restate their commitment to complete the transaction. Buyer pays 20% to 30% of the value of the transaction. Buyer and Seller pay mediation fees. The agency fee on both sides is usually 3% plus VAT (I.V.A.).
Buyer and Seller sign the act in the office of a public notary, usually within three months of the preliminary contract. Buyer pays the balance of the purchase price. If the property is listed for its historical and architectural value (which is the case for most prestigious properties in Venice) the sale will be suspended for 60 days as standard for the right to legal pre-emption of the Italian State. In this case, the balance will remain in escrow with the notary. After the elapsing of the pre-emption period a final deed (“atto di avveramento”) is executed between the parties also in the office of the public notary, where the balance of the price is given to the seller and ownership passes from seller to buyer.
The whole process involves the assistance of Venice Sotheby’s International Realty’s real estate professionals, but also a notary and in many cases also a lawyer, a tax advisor and surveyors.
Property tax is very favourable in Italy compared to that of most other countries, contrary to what is sometimes supposed. There are no restrictions on foreign ownership in Italy. Property in Italy has two completely independent value measurements. The “tax value” (also known as the “cadastral value”) is the value recorded in the Official Land Registry, which is generally well below the “transaction value” (the value recorded in the purchase deed).
A non-resident private person buying a residential property by another private person pays 9% of the tax value of the property. Other rules apply to the purchase of land, commercial properties and whenever a company is involved.
Notary and legal fees depend on several parameters, including location, quality and value of the property.
Annual property tax ranges from 0.4% to 0.7% of the tax value, depending on location and type of property. In the case of properties officially listed for their historical and architectural value, annual property tax is reduced by 50%. There is no wealth tax in Italy.
Individuals are exempt from tax on capital gains in Italy if they resell their property five years or more after purchase. If the property is sold within five years after the purchase, capital gains are taxed at 20%. In the case of corporations or trusts, capital gains are part of the income of the company and are taxed at the rate applicable to the company.
The tax value of each part of the inherited property is exempt from tax up to €1 million for the direct heirs of the deceased, and up to €100,000 for siblings. Beyond the exemption threshold, the tax rate is 4% for the direct line, 6% up to the fourth degree of kinship, 8% for all others.
If you are the owner of a property in Venice which you feel may be of interest to Venice Sothebys International Realty clients and to the worldwide luxury real estate market, please do not hesitate to contact us. We will be pleased to explain how Venice Sotheby’s Realty can work for you, whether in a direct way or via a more discreet soft approach, and working within standard financial parameters.
With over 1000 offices globally, and with our local knowledge and experience, Venice Sothebys Realty offers international marketing worldwide at the highest level.