Property tax
Income
tax (IRPEF) is high in Italy and ranges from 10%-60%. Non-residents must
submit a tax return stating the details of their Italian property, even
though there's no tax to pay if no income is derived from rental
etc. The standard rate of VAT is 19%, with reduced rates to a minimum
4%. VAT is payable on new properties at 9% for non-luxury property and
19% for luxury property. The local community tax or rates, ICI, ('Ichy')
is paid by anyone who owns property or land in Italy, whether they are a
resident or non-resident. It's levied at between 0.4% - 0.7% of a
property's value, the actual rate being decided by the local authority
depending on the size of the property, location, class and category. If
a property is unfit for habitation it could qualify for a 50% reduction.
ICI is paid in two instalments in June and December.
Mortgages
These
are available from Italian banks but can be lengthy to approve, and
usually you can obtain better terms from foreign financial institutes
with borrowed amounts against purchase price of up to 80%. Remember to
declare any funds brought in to your Italian bank. Maximum loans from
Italian banks on property are usually 50-60% of buying price for second
homes and nearer 75% for your main residence, usually up to 15 years.
This guide is not meant to represent a full guide on buying property in
Italy but it will give you an insight to the procedures to follow.
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