9097 "New" beneficial property tax laws?

Are these laws actually new? I was always under the impression that this had been the case for a while now. The 5 year rule about capital gains tax I heard about at least 2 years ago. I may be wrong so I'll let one of the property experts here correct me if that's the case.

alan

could you post a link into it as i am stupid enough not to be able to find what has been said

thanks

I think this is it:

[url=http://www.italymag.co.uk/italy/property/new-tax-laws-italy-provide-significant-benefits-private-buyers]New tax laws in Italy provide significant benefits for private buyers | Italy Magazine[/url]

I think that the 5 year rule only applied if the home was your permanent residence. It looks as if now it has been extended to holiday homes. Correct me if I am wrong, please.

you are right , it is seemingly saying there is something new but basically i cannot see it

the purchase costs quoted sort of suggest that they have gone down from 17% ...well this was never a tax cost it was a combined fees and tax paid cost
with agents fees and notary fees making up almost the major part of it...

i doubt anyone has manged to purchase a property in Italy at the lower prices quoted if they have dealt through an agency and paid a notary let alone the tax

as far as i can work out there is now some flexibility in notaries fees but the other purchase costs ..especially taxes remain unchanged and the article sort of confuses the two issues in my mind..

to suggest that you can buy as a first home at the lower rate of tax and then generate rental income from it i think is illusionary because the two are directly conflicting

that's my opinion...

tax was raised under the prodi government... so in that sense the only thing i have seen is that there has been a raise in tax on properties if you sell either if its a second home or if a first home and you do not purchase another home and it is being sold within five years

anyway that's how i perceive it

am sure i will get put right on everything above

Pardon me for being a dolt- where is the article? I can't find it on the main page.

noma,
Scroll up to permalink 4 of this thread (from Nicola) and click on the link she has posted
alanj

it reads more like a shameless puff for a business than a genuine article

[quote=gradese;85781]it reads more like a shameless puff for a business than a genuine article[/quote]

Whatever you may think about the motives of the report's authors it doesn't alter the fact that if the information is correct then the new laws have significant benefits for all those of us who are considering investing in or selling property in Italy.
I would like to hear from anyone who can confirm or otherwise these details and also, relating to my original reason for posting the thread, what is the timing for the implementation.
Alanj

Hi Alan

My point was that there is no timing for the implementation because in my opinion they're not new laws - ie they're already in practice. The rule about the 5 years for capital gains tax has been in force for some time because I know of people selling second homes in the last few years and they have had this law applied to them. Maybe there's some nuance or other that is new that someone better qualified could explain.

[quote=alanj;85801]Whatever you may think about the motives of the report's authors it doesn't alter the fact that if the information is correct then the new laws have significant benefits for all those of us who are considering investing in or selling property in Italy.
I would like to hear from anyone who can confirm or otherwise these details and also, relating to my original reason for posting the thread, what is the timing for the implementation.
Alanj[/quote]

Look, there has been no recent change in the capital gains tax regime. If you read the article it says that since the tax has been increased to 20% from 12%, then holding a house for five years (which has resulted in exemption from CGT for at least the last five years, probably longer) somehow makes you more money today.This is clearly rubbish.

As to the 'tax' payable on a house. Yes, it can be as little as 4% of the purchase cost of a new build, but only of a new build - (esente mediazione and wth the notaio thrown in, as adriatica has explained). Otherwise it is calculated on the catastal value (a fixed sum), and this is generally more favourable than the previous (2 year old) regime of paying a percentage of a fictional purchase price. Land is a different matter. Inheritance tax [B]was introduced [/B]a year or so ago, after a long period when it didn't exist (although the threshold is still quite high) with Prodi.

It is pure 'puff', this article. Ignore it. Find out from a notaio what your personal position is.

Thanks to everyone who replied. Having listened to your comments, and having re-read the article, I must now agree with both Charles and Gradese that it is little more than puff.
Alanj

AlanJ, to clarify, the article is not dealing with anything new to people on this forum - however, it is new to many people out there, which was the purpose of the press release, which was a generic one sent out to the media in general by the PR company I use. Had I known it would be used by this site I would have updated it for more informed readers.

Things are not particularly positive at the moment in the Italian property market but this is one positive thing which can make a difference in the affordability of a property for many people. Believe me there are many people [I]who do not know[/I] about the changes in the law over the past couple of years, and who are still ruling out the possibility of buying some properties marketed at a certain price because they think that with the notoriously high purchase costs (and by that I mean the overall costs, not just the taxes) it is out of their price range. In the example in the release in question, the reduction in taxes is so significant (the taxes based on the cadastral value) that the overall cost of the property falls dramatically. Obviously, every situation is different!

The result is that yes, private buyers can get far favourable treatment in some cases.

Going through the piece:

Point 1. "Purchase costs that in Italy used to be as high as 15-17%, can now decrease to approx 4% - 5%, which is a huge gain in some cases." [B]This means overall costs, not taxes[/B]. This is based on the specific example given, which has such a low cadastral value even though the property is fairly new, that that the overall costs, including notary, agent etc, comes to just 4 or 5% of the purchase price, [U]even buying as a second home[/U] (the example is a 2 bedroom apartment in a gated, managed complex with pool built 4 or 5 years ago). The example is also fully furnished so the total costs really are as low as that. (before you all rain blows on me I am not trying to promote it, just prove my point!)

Point 2: concerning capital gains. Yes, capital gains is not payable after 5 years even if the property is a second/holiday home. This issue is entirely separate from the prima case issue where you have to buy another prima casa home after selling. The confusion on the issue in this thread highlights the fact that people still do not understand how the laws work. Again not new but many people still don't know about it. Unfortunately missing from my original notes the release was based on is my warning that capital gains may still be payable in the UK. I will add a comment at the bottom of the piece.

Point 3: inheritance taxes - definitely not new but still a point in favour for people looking to retire here.

I agree that the title is really misleading, especially for more informed readers such as those on this forum. The changes are not particularly new. Dropping the word "new" from the title would be better and I will ask Ronald to do that.

Adriatica I was not suggesting for a minute that you could rent out a home and still claim prima casa benefit. The figures I quoted, apart from the one where I say that if you become a resident the figure drops still further, refer to second home taxes.

I appreciate the reply and explanation from Gardahomes and agree that omitting the'new' reference from the article's title will be less misleading.
It would certainly have stopped me jumping to the conclusion, as I did, that there would be a surge of interest in the second home market to the benefit to people like us who are trying to sell.
Alanj

garda homes... sorry it still does not make sense to me... cadastral value and the tax paid on it really has changed the tax liability very little... declared prices that you paid tax on were generally somewhere in line with that anyway... i would say very little is being saved in that sense...but it matters little

now your figure quotes 4-5 %

an estate agents fee is based on the actual selling price and that is equivalent to that amount alone... if you include the IVA/VAT they charge

which is why i wonder ...had heard that agent fees up there ran from 4-6 % ...

you also judge a fee for a notary again based on actual selling price.... at around the 2% mark although this is not fully infallible just as a guide...

the other point is that the whole housing stock is being re evaluated as we speak and cadastral values are being increased to fall in line more with a percentage of the actual retail value of the property ... so i can only see this going up....

sorry maybe i am just being thick...but with two of the professionals involved basing their fees on the actual selling price...it does not add up to me ...

...in fact if you add in legal advice for a non italian buyer plus translation costs ...then even leaving out the cadastal value taxation benefit which i regard as debatable you arrive at almost 8-10 % of the property value.. a constant figure from the last several years...

and if anything with the tightening up on regulations regarding cash payments, and money laundering i would say that this figure is more secure now than ever before as the risks of attempting to avoid taxation is that much higher

I think that I mentioned this before in another thread, when we bought our watermill, last November, we had a very pleasant surprise as the cadastal value of our property was a third of the selling price. So we got a nice refund. I imagine that, should we decide to sell our property in the future (Heaven forbids!) the buyers will not be that lucky as the cadastal value would have been altered to reflect the new sale price. But in our case, it really worked.

[quote=adriatica;85974]garda homes... sorry it still does not make sense to me... cadastral value and the tax paid on it really has changed the tax liability very little... declared prices that you paid tax on were generally somewhere in line with that anyway... i would say very little is being saved in that sense...but it matters little

now your figure quotes 4-5 %

an estate agents fee is based on the actual selling price and that is equivalent to that amount alone... if you include the IVA/VAT they charge

which is why i wonder ...had heard that agent fees up there ran from 4-6 % ...

you also judge a fee for a notary again based on actual selling price.... at around the 2% mark although this is not fully infallible just as a guide...

the other point is that the whole housing stock is being re evaluated as we speak and cadastral values are being increased to fall in line more with a percentage of the actual retail value of the property ... so i can only see this going up....

sorry maybe i am just being thick...but with two of the professionals involved basing their fees on the actual selling price...it does not add up to me ...

...in fact if you add in legal advice for a non italian buyer plus translation costs ...then even leaving out the cadastal value taxation benefit which i regard as debatable you arrive at almost 8-10 % of the property value.. a constant figure from the last several years...

and if anything with the tightening up on regulations regarding cash payments, and money laundering i would say that this figure is more secure now than ever before as the risks of attempting to avoid taxation is that much higher[/quote]

Hi adriatica
If you look at the "article" and take it as a piece of "news" that can be applied across the board, you are right, it doesn't make sense. But it wasn't supposed to be that. It was a press release promoting a particular property on behalf of the estate agent I work with, and has been picked up, stripped of the property it was promoting and used as an article.
In the example in question, the total costs come in at 5% overall for a second home buyer, including agent fee at 3% (which is what the agent is charging), notary fee and taxes. The cadastral value is so low that even under the old system it would have been difficult if not impossible to have paid such a low purchase tax. Take into account that not every buyer was willing, even in the old days, to pay large amounts of cash under the table. Many buyers preferred to pay the taxes and be done with it.

Who told you the notary fee is around 2%? This is absolutely not true. According to the tariffe notarili, the notary fee payable on this particular property comes to about 1% including VAT, based on the purchase price and taking into account the notary discount provided when declaring the full purchase price (not that a percentage is relevant when calculating the notary fees).

Yes, the cadastral values will go up over time. But they haven't yet, not here anyway. There is a remaining window of opportunity now to pay lower taxes, legally.

As regards estate agent fees "up here" - generally 3% or 2% if you can haggle, but they can get higher, to 4 or 5% for very low value properties (for example if you buy a garage at 20,000 euros, the agent will likely charge 5%). The usi e consuetudini at the Chamber of Commerce state 3% so generally the agents stick to that fee. Some have tried raising to 4% but it hasn't been popular as you can imagine. :smile: