Sito internet Agenzia Entrate versione inglese

Web Services
You are in: HomeItalian taxation - Real Estate Taxes

Real Estate Taxes

How real estate is identified

Real estate is identified using the land registry categories assigned by the provincial offices of the Inland Revenue (previously offices of the Department of the territory or Technical Tax Offices) that are normally reported in the legal documents with which the same real estate is transferred.

Each urban real estate unit belonging to groups ‘A’, ‘B’ and ‘C’ is assigned a category and class according to its internal and external characteristics, and its intended use. After that the official value of the property is determined, by applying the valuation rate defined for each category and class and published in the Official Journal. The real estate units belonging to groups ‘D’ and ‘E’ are assigned the relative category and value by carrying out a direct estimation.

top

How the official value of property is determined

The official value of property is obtained by multiplying the size of the real estate unit (rooms, square metres or cubic metres) times the valuation rate.

For example, for an apartment belonging to the land registry category A/2, class 5, situated in an average municipality with only one census area, it is possible to identify in the Official Journal a rate that, multiplied by the number of rooms, provides the official value of the real estate property. So, if the rate is of 300 euros and there are 4 rooms then the value will be 1,200 euros.

In order to take account of the cost of living, an established official property value can be ‘re-evaluated’, that is it can be increased by a certain percentage, thus incrementing also the base for the application of taxes.

top

Enrolment in the Land Registry

Owners must report new buildings to the provincial office of the Inland Revenue within 30 days from the time the building become habitable or in any case suitable for their intended use.

Currently, by using the electronic procedure named DOCFA (Documenti Catasto Fabbricati), the taxpayer suggests the official property value, with the help of a qualified expert.

In case the Inland Revenue amends the official property value already assigned or suggested by the taxpayer, it must notify the interested person of the new value established. It is possible to lodge an appeal against this decision to the competent tax commission, within 60 days of its notification.

top

Variations and transfers

Whoever must register a document for the transfer property rights of real property or submit a declaration of inheritance (usually a notary or the heir) is also required to lodge a request for transfer to the provincial office of the Inland Revenue, within 30 days of the registration.

The request allows the registration of the land registry documents and the transfer of full ownership or of any other property right.

This obligation can be absolved by public notaries requesting the ‘automatic transfer as per the transcription note’, on the basis of which the adjournment of the land registry documents is directly carried out, with the help of the information provided for the transcription, in the land registry offices.

Should there be variations of an objective character, meaning variations that have concerned, in a permanent way, the type, consistency or intended use of the real estate; the interested parties are required to submit a specific request to the provincial office of the Inland Revenue. This must be done by 31st January of the year following the one in which the works were terminated.

Currently, variations and transfers can be handed in on magnetic storage support, thus allowing the immediate updating of the documents.

top

Buildings taxation

Real estate – land and buildings – are subject to taxes that affect their income (Irpef and its supplements), their possession as assets and their transfer, carried out either by deed between living persons – such as endowment or acquisition – or by inheritance, as well as by usucaption.

In case of transfer on the basis of acquisition, the taxes applied are the registration fee (or alternatively VAT), and the mortgage and cadastral tax. In case of transfer on the basis of endowment (or inheritance), as well as the mortgage and cadastral taxes, the inheritance and endowment duties are owed. The latter varies according to the beneficiaries involved (see “Inheritance and Endowments”).

Please note that, according to the principle of alternativity, for acts subject to VAT the proportional registration fee is not applied. The fixed registration fee, the mortgage and cadastral taxes are in any case owed.

As regards Irpef, the income deriving from real estate is cumulated with the other forms of income of the owner and taxed according to the rates foreseen for this tax (see “Irpef”).

Since Irpef rates are progressive, the same income deriving from real estate can therefore be taxed to a greater or lesser extend depending on the amount of the overall income in which it is included.

top

Acquisition of real estate

In the event of acquisition of real estate, registration fee is applied or alternatively VAT (depending on the seller) as well as the mortgage and cadastral taxes.

Please note that, according to the principle of alternativity, for acts subject to VAT the proportional registration fee is not applied. The fixed registration fee, the mortgage and cadastral taxes are in any case owed.

How taxes are calculated

Registration, mortgage and cadastral taxes

These taxes (registration fee, mortgage and cadastral taxes) are paid by the notary at the moment of registration.

For the sale of real estate for living (and relative outbuildings) carried out with regard to individuals who do not have commercial, craft or professional activities, the taxable base for the purposes of registration fee, mortgage and cadastral taxes can be provided by the cadastral value of the real estate, instead of the price paid.

top