Esprit Rock

Property taxes

Property taxes (The tax System) in Italy
The amount of tax and Liability
Any contract or legal deed transferring or assigning the right of a real estate property is exposed to a nominal stamp duty tax and a registration tax. These laws are regulated by the Unified Registration Act in Italy. On the one hand, a “stamp duty” is a tax that is imposed on documents and it is applied on a fixed base and relies on the number of standardized pages forming the contract. On the other hand, “registration tax” is applied on a percentage base, it is dependent on the value of transaction while relying on other various circumstances. The standard rates differ from 2% to 9% of the property cost. When the transaction is subjected to the VAT, the registration tax will be applied on a fixed nominal base. The registration fees are payable to the court in the same country. “VAT” is an abbreviation of Value added tax. It is defined as the tax that is added to the price of goods or services. In addition, this tax is also used for house property, as it consists of the transfer of ownership rights from the seller to the buyer. With regards to the mortgage system, it has a standard tax ranging from 2%to 3% of the property cost. The standard rate of Cadastral tax is 1%. A “cadastral” is a comprehensive land recording of the real property’s metes-and-bounds of a country. In many countries, the Cadastral Survey System maintains records of all public lands. The “mortgage” is a loan in which real estate is adopted as collateral. The borrower enters into an agreement with the lender (mostly a bank) where the borrower receives cash upfront then provides and gives the money over a certain time of period until he pays back the lender the full amount of money.
Transferring of real estate and income tax
The capital gain on disposal is totally taxable unless the assets were primary houses or were acquired for above five years before the disposal. “Real estate assets” can be defined as an investment of properties by a Company or the working associations in unenhanced and enhanced real estate property straightforwardly through one or more subsidiaries.
Transfer tax
Transfer tax is a tax that is levied by counties, or municipalities on the privilege of transferring real property within the jurisdiction and authority. The transfer tax must be paid within 30 days of the transfer. VAT is payable subject to an option by the seller for all purchases and sales in real estate especially when the transaction is in the framework of business. If VAT is applicable, the seller charges VAT to the buyer and then the seller pays this VAT to the tax authorities existed in the same country. The standard rate of the VAT is 22% of the property cost. This percentage changes in other circumstances. 12% of the VAT is applied to some residential and instrumental buildings and 8% of the VAT is applied in selling a residential property which will become as the primary house of the buyer.
Taxation and shared deals
Taxation of a shared company or entity when transferring is different and in general it is lower than other situations.
Tax issues that a buyer and seller should take into considerations
The buyer is always accordingly liable with the seller and notary for the payment of transfer taxes. “Notary” is known as a legitimate officer who is assigned by governments and he works mainly in affirming and attesting deeds, authorizing contracts, taking legal declarations and complaining of negotiable papers. If the seller failed to pay any property taxes or transfer taxes, the tax authority will impose a lien on the related property which prevails over a mortgage. A “lien” is the legal claim of one person upon the property of another person to secure and ensure the payment of a debt or the achievement of a legal obligation