Registration tax or VAT: what you pay at the notary's table

Giulia is buying a three-room flat for €200,000 and does not qualify for the first-home relief. If a private owner sells it to her and she asks the notary to tax the cadastral value of €120,000, her taxes come to €10,900. If the builder who has just finished the block sells her the very same flat, the bill climbs to €20,600. Same price, same walls: only the person signing on the other side has changed.

The seller decides which tax applies

Italy has no single tax on buying a home. There are two alternative routes, and the buyer does not choose between them: the nature of the seller does. The Agenzia delle Entrate page on purchase taxes makes the point in its first line: what you owe depends on whether you buy from a private individual or from a business.

The first route runs through registration tax, the imposta di registro. It applies when the seller is an individual who is not acting as a trader, which covers the ordinary resale of a family home. It also applies when a company sells but the transfer is exempt from VAT.

The second route runs through VAT. Only businesses can put a sale on this route, and not every business sale qualifies. The tax agency lists two precise situations in which selling a dwelling is subject to VAT, and they are worth learning before you even book a viewing.

• The company that built the property, or carried out restoration work on it, sells within five years of completing the works
• The same builder or restorer sells after five years but elects, in the deed itself, to charge VAT
• A dwelling intended as social housing is sold and the seller opts for VAT in the deed

Outside those cases a sale by a company is VAT-exempt, and the buyer is treated exactly as if the seller were a private person: proportional registration tax plus flat mortgage and cadastral taxes. A property company reselling a flat it bought years ago, without renovating it, is the textbook example.

The registration route: 9% and two flat taxes

When a private owner sells, the transfer bears 9% registration tax, while the mortgage and cadastral taxes are €50 each. Those are the figures the agency gives for a buyer who does not meet the first-home conditions; the second module deals with that relief on its own.

The new consolidated registration tax act, Legislative Decree no. 123 of 1 August 2025, sets out the same rates in its annexed tariff and adds something the explanatory pages leave out. However low the rate, proportional registration tax can never come to less than €1,000.

The tariff also says that deeds bearing proportional registration tax, and the land-registry and property-register formalities that flow from them, are exempt from stamp duty and from the fees for mortgage and cadastral services. In other words, the buyer does not face a long list of small separate charges.

The floor mostly bites on cheap properties: a small country cottage, a studio in a village, a ruin to be restored. If 9% of the taxable value falls short of €1,000, you still pay €1,000. Run that check before you sign rather than hearing about it from the notary on completion day.

The VAT route: 10%, 22% and three flat taxes

When the sale is subject to VAT and the buyer does not qualify for the first-home relief, the rate is 10%. It rises to 22% for homes classified, or classifiable, in cadastral categories A/1, A/8 and A/9: upper-class dwellings, villas, and castles or palaces of notable artistic or historic merit.

Registration, mortgage and cadastral taxes do not disappear alongside VAT. They become fixed at €200 each, so the three together cost €600 on top of the VAT charged on the price.

One practical difference is easy to overlook: timing. VAT does not reach the Treasury through the notary the way registration tax does. The selling company collects it, shows it on its invoice and accounts for it in its own returns. Buyers of off-plan homes often pay it in instalments alongside each advance on the price.

Economically nothing changes for the buyer, since a private person cannot recover VAT and it is a final cost. Cash flow does change, though, so it pays to ask the developer for a payment schedule that shows the price and the tax on it as separate lines.

The tax base: price or cadastral value

Which figure does the 9% apply to? The general rule looks at the agreed price, but homes benefit from a mechanism that changes the arithmetic completely. Italians call it prezzo-valore, and the agency describes it precisely on the same page about purchase taxes.

When a residential building and its appurtenances are sold to individuals who are not acting in the course of a business, art or profession, the buyer may ask the notary to calculate registration tax on the property's cadastral value rather than on the price actually paid.

Cadastral value is almost always far below market value. It is derived from the cadastral income, the rendita shown among the classification data of the land-registry extract, using statutory coefficients. This course does not quote them because the pages read do not; the notary applies them and tells you the result.

An extract for a property you own, the visura catastale, is free from the agency's online services. For a home you have not bought yet, ask the seller or the notary. Reading it before you make an offer tells you the category, class and cadastral income, and therefore what the purchase will really cost in tax.

The limit is sharp. On a sale subject to VAT the taxable base is the sale price, and cadastral value plays no part. That is why, for the same price, buying from a developer usually costs far more in tax than buying from a private owner.

The option does not allow anyone to write a lower price into the deed. The full price actually paid must still be stated; the only thing that changes is the amount on which the tax is computed. Hiding part of the price remains a violation, and its consequences dwarf any saving the buyer had in mind.

According to the agency's page, the option also covers appurtenances sold together with the home, such as a garage or a cellar, which carry their own cadastral income. Make sure the deed lists each unit transferred, its land-registry details and the overall price, so the notary can apply the rule to the whole package.

Before you sign the preliminary contract

Everything you need to estimate the taxes can be gathered before the preliminary agreement: who is selling, whether a company built or restored the property and when the works ended, the cadastral category and the cadastral income. A written statement from the seller on whether VAT will apply avoids surprises at completion.

Taxes are not the only cost of buying. Notary fees, mortgage costs and the estate agent's commission sit outside this course, but they belong in the same budget if the figure you plan around is to mean anything.

Faced with a developer's offer, three questions settle almost everything. Did this company build or renovate the property? How long ago were the works completed? If more than five years have passed, does it intend to opt for VAT? Written into the preliminary contract, the answers tell you which route completion will follow.