buying a ski property in Italy
Buying a property in Italy is an exciting step and there is a lot to learn, so we want to make sure that you get the best out of your experience. All of our ski property for sale in Italy comes with our specialist advice and expert knowledge. We will walk through every transaction with you, step by step, ensuring that the process of buying in Italy is as hand-tailored to you as your bespoke chalet.
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We’ve created a comprehensive online Buyers’ Guide that will tell you everything that you need to know about buying your dream ski property in Italy…
Introduction to ItalyItaly is a Southern European country characterised by its traditional villages, diverse and beautiful landscapes, gourmet cuisine as well as rugged Alpine terrain.
Italy is a beautiful country located in the heart of the Mediterranean Sea, bordering France, Switzerland, Austria, Slovenia, San Marino and the Vatican City. With all these neighbouring countries it makes Italy a great base from which to explore the whole of Europe. It is home to some of the best food in the world, incredible landscapes, gorgeous coastlines and the perfect Mediterranean climate. Not only does Italy has some of the best ski and summer resorts. Property is available to buy for both EU and non-EU buyers in Italy with no restrictions.
Italy is divided into 20 regions with 40% of the country boasting a mountainous landscape ranging from the Alps to the Dolomites. Due to the perfect altitude of Italian mountains, Italy has true dual-seasonality with sunny chilly winters that hover around 0ºC and warm summer days with temperatures around 25ºC to 35ºC. The mountains are snow-covered in winter but warm and green in summer. Italy has some of the world’s most breath-taking coastlines surrounded by four different Mediterranean Seas: the Adriatic Sea in the east, the Ionian Sea and the Ligurian Sea in the south, as well as the Tyrrhenian Sea in the west
who can buy in Italy?Anybody can buy property in Italy, as there are no restrictions. It is also possible to buy in the name of a company. All buyers need to apply for a codice fiscale and an Italian tax number. These are easily obtained through the Italian tax offices.
Purchase Process of Ski Property for Sale in ItalyThe process of buying a property in Italy is straightforward. We recommend our clients should appoint an independent bilingual Italian lawyer to oversee the buying process. The Italian lawyer will prepare in both English and Italian all documents and contracts associated with purchase. We also recommend appointing by a Power of Attorney the lawyer, to entrust the appointed lawyer with the duty of ensuring that all the legal formalities are respected, particularly the registration of the deed in the Land Register and releasing the acquired property from any previous mortgage.
You will need to take the Power of Attorney to a Notary Public (not a solicitor) in your country of residence to have your signature witnessed and the Notary Public will send the document off to the foreign office to have it ‘legalised’. This process usually takes several weeks but can be fast-tracked for a small fee.
All stage payments will be paid to the escrow account and only be transferred to the developer/vendor upon receipt of a bond, issued by the seller, guaranteeing such stage payments.
Upon completion by the developer of your property a final purchase deed will have to be signed by both parties to legalise the exchange of title deed. In Italy the final purchase, deed is overseen and legalised by a Notary, who is a semi-public official and will act on behalf of both the purchaser and the vendor. The notary will finalise the purchase deed and all the documents required to transfer the legal ownership and he has a duty to protect the interests of both parties. (Unless you have appointed a Power of Attorney you will have to be present at the Notary and accompanied by an official translator unless you speaks and understand Italian.)
The notary will register the sale at the relevant local public registry. Until the sale is registered at the registry, the contract, though binding upon seller and buyer, does not exclude the possibility of third-party claims. After the final deed is signed, the balance of the purchase price is then paid to the seller, normally by bank drafts and the notary fees must be paid.
As the notary is an independent state advisor, it is recommended the buyer appoints his own legal advisor. An Italian bilingual lawyer will represent your interests and oversee the full purchase procedures. Normally a lawyer would charge a minimum fee of 2000 euros or 1% of the purchase price. The costs of the Italian bilingual lawyer are payable by the buyer and are not included in the purchase cost of the property.
Purchase CostsThe purchase of a property becomes valid once the owner is registered in the Land Registry. All of the following purchase costs are payable by the purchaser. When you come to sell, no Notary fees are payable .Purchase cost for buying this property are approx. 12% of the gross purchase price. Fees must be paid to the notary immediately after the final purchase deed has been signed. Fees are calculated as follows:
• Registration Tax – 168 euros
• Mortgage Tax – 168 euros (even if no mortgage)
• Cadastral Tax – 168 euros
• Notary’s fees – 1.5-2.0% or 2000 euros of gross purchase price
• Notary Taxes – 500 euros
• VAT on purchase price – 10% VAT
Purchase costs can vary depending whether it is an individual or company selling the property and on the residential status of the buyer. Some luxury properties can be subject to a 20% VAT rate.
No Buyers Fees!Our services are free! Alpine Marketing does not charge any fees to the buyer. Buyer’s fees can be as much 3%, so there is an instant saving when you buy through us. We are also completely independent sales agents working with all the top developers in the Italian Alps. As we do not develop any property ourselves we can offer unbiased, independent advice.
Purchasing in stage paymentsNew build properties are paid for in stages and all payments are made through the lawyer. Payments are made into a client/escrow account and payments for each stage are only released to the developer upon receipt of the developer’s bank guarantee bond. Giving security to everyone. Purchase payments will differ but look something like this:
• 10% upon signature of PPI
• 25% upon start of building works
• 25% on completion of shell and roof and 1st fix plumbing & electrics
• 15% on completion of façade and the 2nd fix plumbing and electrical
• 25% on completion of property and upon signing final purchase deed
MortgagesItalian banks will fund up to 70% of the purchase price and usually the loan period will be between 10 and 25 years. Some banks charge a set-up fee and this is usually around 1.5% – 2% of the value of the loan. They will also charge an appraisal fee of 0.5% and the fee to register the mortgage in the land register is between 1.5% and 2% of the amount of the mortgage. It is possible to add all these mortgage related costs into your mortgage. Variable interest rates are currently around 3%, and brokers can also offer a 1-year fixed rate or 5-years fixed rate mortgages at very competitive rates. We can recommend mortgage brokers to our clients.
International Money TransfersWhen you are buying a ski property in Italy and making international money transfers, fluctuating exchange rates can make a huge difference to the final amount you receive in your bank account.
We work closely with a leading currency exchange experts for all of our clients money transfers, international payments & foreign exchange dealing’s. Our contacts here provide the quickest and easiest way to transfer money internationally. They also consistently provide bank-beating exchange rates to help both companies and private individuals achieve significant savings. To find out more click here
Construction ScheduleConstruction in the Alps only takes place in the summer months. This is because during the winter months the ground is frozen and covered in snow. As a result, Alpine developers optimise their build schedule and usually build and complete an apartment building or several chalets in one summer season. The advantage to buyers is that during the winter they can sign their purchase contract to secure their property but they will not have to start making stage payments until construction starts in the spring.
Construction GuaranteesAll new build Italian property are covered by a 10 year building guarantee against all building defects.
FurnitureSome properties have all the furnishings included in the price. Developers in these projects offer a ‘turn key’ service which means they provide every comfort for owners so their property is completely ready to occupy.
Where furnishings are not already included in the purchase price it is possible to purchase optional furniture collections to enable buyers to move into their chalet with everything complete. We work closely with developers and interior designers to provide an extensive choice to suit every taste.
These furniture options are flexible, affordable and include everything you will need such as sofas, beds, and linen etc. For more information on which properties already include the cost of furniture collections please contact us or see individual property brochures.
Please note that although the cost of the furniture might be included in some properties, for mortgage purposes this cost must be deducted as banks will not lend on furniture.
Most of our properties are built either ‘to-order’ or ‘unfitted’ enabling you to personalise your property with a tailor-made finish included in the price. You can choose from an extensive range of kitchens, bathroom fittings, flooring, and wall tiles etc.
Rental requirementsIn Italy owners have no restrictions or rental obligations. Therefore, you are free to rent or not rent your Chalet as you wish. Italian ski property has great rental potential if you are interested in renting your property when you are not using it.
Rental can easily be arranged through a local agent, or a larger agency. Renting out your property when you are not using it, can provide great income to cover the annual running costs. Generally, tour operators do not like to give rent guarantees and usually only do so if the property is part of a large development with a reception and other facilities.
Any rental income would be liable for taxation in Italy, but you would receive a credit for this in your home country if there is a dual taxation treaty. If the property is not rented and is not your primary residence an annual tax is due on the cadastral value of the property.
Italian property offers superb rental income potential for buyers, and most owners are keen to rent their property.
The running costs of a development are usually divided up between the owners, according to the size of their property. As a rough guide the basic running costs usually work out around 3-5 euros per m2/month and this would cover the cost of snow clearance, rubbish removal, water rates, building insurance, and local property taxes. It would also include the cost of cleaning and lighting for any communal areas, and maintenance of the gardens etc. These expenses would not include your own personal usage of heating and electricity as this varies depending on how much you use the property.
These are payable quarterly, half yearly or yearly. As a rule of thumb annual expenses for an apartment in a typical ski resort, including all local property taxes and service charges, are somewhere in the region of 1500 euros per annum.
Each apartment is ‘freehold’ and the owner of that apartment has a share of the whole building and its integral and communal parts and an exclusive right to use their own apartment.
According to the Italian law, when multiple exclusive properties share some private common facilities for a better use of the single private units, the owners must use the common facilities so that everyone can potentially get the highest individual benefit without limiting other owners’ right of use and potential utility of the same common areas. This concept is called “condominio” and it can be either (i) regulated by a formal contract between the single owners and can be managed by a person appointed for this purpose, or (ii) can be managed informally by the owners according to the default Italian laws applicable when there is no private agreement to regulate the condominio
Management ServiceLocal agents can handle the administration and management of your property including checking, clearing and maintaining the property, stocking refrigerators with necessary basics before arrival, restaurant and ticket bookings, payments of bills, insurance for household contents, baby-sitting and even car delivery to the airport.
If you will declare in the final purchase deed that you will move your main domicile to Italy within in 18 months, to the same Municipality where the property is, you will be entitled to apply for tax benefits and be subject to a lower VAT rate. The tax benefit related to such statement would imply a reduced VAT rate, currently 4%, instead of the standard rate, currently 10%.
INCOME TAX AND VAT
Income tax is currently known in Italy as IRPEF. To purchase a property in Italy you must register for an Italian tax code codice fiscale and thus you become part of the Italian tax system. Italian rental income must be declared in your Italian tax return. Most Italians use an accountant commercialista to manage their tax affairs as there are frequent changes to the fiscal laws. We can advise bilingual accountants. The Italian tax year is the same as the calendar year finishing on the 31st December and tax returns must be completed by April of the following year. There are certain allowable expenses which can reduce your taxable income. Any profit after deduction of the allowable expenses and tax exemption will be taxed at the following rates:
• First 15,000 euros taxed at 23%
• Further income from 15,000 – 28,000 euros taxed at 27%
• Further income from 28000 – 55,000 euros taxed at 38%
• Further income from 55000 – 75000 euros taxed at 41%
• All income above 75000 euros taxed at 43%
Depending on your owner status you may need to register for VAT, if so, you will also need to charge VAT of 20% on your rentals. VAT quarterly returns are due. We always recommend a choice of local tax advisors to help with your tax returns. The tax advisor will charge a one off fee to set up your registration (please contact advisors directly for prices) and annual tax returns will cost in the region of 300 – 500 euros per year.
If the house is not being rented and nor is it a primary residence, taxes can be due on the cadastral virtual rental. This is typically a nominal amount but still a legal obligation.
AUSTRIAN INCOME TAX RATES
Profit Percentage Income Tax payable
0 euros – 11,000 euros 0%
11,001 euros – 18,000 euros 25%
18,001 euros – 31,000 euros 35%
31,001 euros – 60,000 euros 42%
60,001 euros – 90,000 euros 48%
90,001 euros – 50%
In case of property transfer due to succession, the transfer is subject to three taxes: inheritance tax, mortgage tax and cadastral tax, applicable with different rates to different subjects. Generally if the property is bequeathed to your spouse or children then inheritance tax at 4% is due for values over 1 million euros. A mortgage tax of 2% and a cadastral tax of 1% are calculated on the property value.
LOCAL PROPERTY TAX
A local property tax called ICI is paid to the Municipality in which the property is located. All Italian property owners whether residents or not must pay this tax which is due annually and is divided into two payments: the first in June and the second in December. The ICI annual rate is generally between 0.2% and 0.9% of the property value as listed on record. The typical rate for properties not registered as permanent home is 0.7%. Rates depend on the type of property, location, use, etc. Only a few situations exempt one from ICI such as when the property is in ruins and cannot be used or when the property is registered as permanent home
As is always the case (in whatever country you may own property) where there is a dual taxation treaty, you would be liable to pay tax in the country in which you reside and be given credit for any tax paid to the foreign (Italian) government.
CAPITAL GAINS TAX
As a general rule, if a property is sold within 5 years of purchase, 20% capital gains tax is due. If the property is sold more than 5 years after purchase, there is no tax to pay in Italy. Some exceptions can apply. For instance, if the property is sold before 5 years, but has been used as the owner’s main home for the majority of the time, no capital gains tax is due
RUBBISH GARBAGE TAX
The garbage tax is calculated in accordance with the size of the property and the local rate. Usually from €1.50 to €2.50 per m2
You are not required to register for Italian residency if you own a property in Italy. If you decide that your property becomes your main residency there may be tax advantages if you choose to become resident.
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Disclaimer: Whilst we make every attempt to ensure the accuracy and reliability of the information we provide, we are not tax advisors or lawyers. We are reliant upon information provided by third parties and therefore, the company, its employees and agents will not be responsible for any loss however arising, from the use of, or reliance upon this information. Legal advice or tax advice must be received by a professional Lawyer or tax advisor and we are happy to put you in touch with companies if you would like further information. These particulars and the company website do not form part of any offer or contract and must not be relied upon as statements or representations of fact. Registered Office: Bentinck House, 12 Bulstrode Street, London W1U 2JF, Registered in England. No. 06423236.