How to buy a property in Venice
Buying in Italy is more straightforward than you might think. With deals formally and legally agreed at an early stage on acceptance of a written offer, gazumping just doesn't happen here.
Generally, there are three steps to buying a property:
Step 1: La Proposta - Proposal
A written offer from the buyer and accepted in writing by the seller with a deposit is enough to secure a sale - the offer becomes effective and binding for both parties.
Step 2: Preliminary contract
The process in Italy is quite flexible in that the buyer will either sign a more detailed preliminary contract at this stage or proceed straight to final contract. At this prelim stage the buyer pays between 20% -30% of the price. Buyer and Seller both pay mediation agency fees in Italy, usually 3% plus iva.
Step 3: Final Purchase contract (Rogito)
Buyer and Seller must sign the act in the office of a public Notary, chosen by the buyer. If this isnt possible the buyer can give a Power of Attorney to an Italian speaking person (usually their laywer). The balance of the purchase price is paid in full. If the property is historically listed (as with most properties in Venice) the sale is suspended for 60 days as standard for the right to legal pre-emption by the Italian State and the monies 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.
Venice Sotheby's Realty
The whole process is monitored throughout by Venice Sotheby’s International Realty’s real estate professionals, in liaison with the Notary, lawyers and other professionals We aim to give full support to our buyers at all times to ensure the smooth running of the sale.
Estate Tax
Property tax is very favourable in Italy compared to that of most other countries, contrary to what is sometimes supposed. There are generally no restrictions on foreign ownership in Italy but this should always be checked with the country governance concerned. 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).
Sales Tax on the purchase
A non-resident private person buying a residential property from another private person pays 9% of the (low) tax value of the property. Other rules apply if a company is involved. More information on request
Annual taxation
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.
Tax on capital gains
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.
Succession tax
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.