What buying a home costs beyond the price

From a private seller: registration tax

This is the commonest case. The rate is 2% where the purchase meets the “first home” requirements, with a minimum of 1,000 euro, and 9% otherwise. On top come the mortgage and cadastral taxes, 50 euro each. The rates are set by the Tariff attached to DPR 131/1986.

The gap between 2% and 9% is the heaviest item in the whole purchase after the price itself, and it depends on requirements that can still be lost after the deed. Worth reading through with the notary beforehand rather than discovering afterwards.

From a developer: VAT instead of registration tax

If a construction company sells within the statutory time limits, the deed carries VAT: 4% with the first-home requirements, 10% otherwise, with a separate rate for luxury dwellings. Registration, mortgage and cadastral taxes are then paid at a fixed 200 euro each.

VAT is always calculated on the declared price: the “prezzo-valore” mechanism described below applies only to purchases subject to registration tax. That is why, at the same price, buying from a developer and buying from a private seller do not cost the same.

Prezzo-valore: the rule that saves you money

Buying a dwelling from a private seller, you can ask for the taxes to be calculated not on the price paid but on the cadastral value: the rendita uplifted by 5% and multiplied by 110 for a first home, by 120 otherwise. This is article 1, paragraph 497 of law 266/2005.

Because the cadastral value is normally far below the market price, the difference is substantial. Two things to know: the request has to be made to the notary, in the deed, not afterwards; and the price must still be declared in full — the rule reduces the tax, it does not allow a figure other than the one paid to be written down.

The notary and the commission

The buyer chooses the notary and the buyer pays. The fee no longer follows a compulsory scale — those were abolished — so it varies between practices, and asking two or three for a written quote before deciding is entirely normal. Compare them on the same basis: much of what a notary collects is tax paid on to the state on your behalf, not fee income.

The agency's commission falls due when the deal is concluded as a result of the introduction (article 1755 of the civil code), and it is owed by both parties. Here too there are no compulsory scales: what applies is what was agreed in writing beforehand, and asking for it in writing before the offer is a right, not a discourtesy.

What comes back

Two deductions apply to almost every buyer and almost nobody claims both. Interest on the mortgage taken to buy the main home is deductible at 19% on a maximum of 4,000 euro a year; the commission paid to the agency is deductible at 19% on a maximum of 1,000 euro, once.

For either to work you need an invoice in the name of the person claiming and a traceable payment: bank transfer, not cash. Which is why it is worth keeping the receipts in order from day one, and why the invoice for the commission should always be asked for, even when nobody offers it.