Property Taxes in Italy for an Israeli Buyer: Registration Tax, IVA, IMU and Tax on the Gain When Selling

1Which taxes do you pay when buying property in Italy?

The answer depends on two questions: whom you are buying from, a private individual or a building company, and whether you meet the conditions of the first-home benefit (prima casa). According to the guide of the Italian Revenue Agency (Agenzia delle Entrate, October 2025 edition), a buyer who purchases an apartment from a private seller without the benefit pays a registration tax (imposta di registro) of 9%, together with a fixed ipotecaria tax of EUR 50 and a fixed catastale tax of EUR 50.

The proportional registration tax cannot be lower than EUR 1,000. The notaio collects all these taxes and pays them to the Revenue Agency when the deed is registered, so the money must be available on the day of signing. A deed subject to proportional registration tax is exempt from stamp duty and from the related land registry and cadastre fees.

Source: Agenzia delle Entrate, home purchase guide, October 2025. The rates are correct as of October 2026, but Italy's annual budget law may change them.

2What is prezzo-valore and why does it matter to you?

prezzo-valore is a system under which the registration tax is calculated on the cadastral value of the apartment rather than on the price you actually paid. It applies when the buyer is a private individual not acting in the course of a business or profession, the property is residential (including appurtenances such as a storeroom or parking space), and the sale is not subject to IVA. This is the usual situation when an Israeli buys an apartment from an Italian.

The cadastral value is calculated as follows: the rendita catastale, the income recorded in the cadastre, multiplied by 1.05 and by 120. In the Revenue Agency's example, an apartment with a rendita of EUR 900 is bought for EUR 200,000. The prezzo-valore base is EUR 113,400 and the registration tax is EUR 10,206. Without the system, the tax would have been EUR 18,000.

• It must be requested expressly from the notaio, in the deed itself. The request cannot be added later in a supplementary document.
• The real price must be stated in the deed. If part of the price was concealed, the tax is calculated on the full agreed price, and a penalty of 50% to 100% of the tax difference is imposed.
• Protection against reassessment: the Italian Revenue Agency cannot determine a different market value for registration tax purposes, except where the price was concealed.
• A 30% reduction in the notaio's fees, by law.

3What changes when you buy a new apartment from a builder?

When a building company sells an apartment within five years of completing construction or renovation, the sale is subject to IVA, the Italian VAT, and not to proportional registration tax. The rate is 10% of the price, and 22% for properties in the luxury categories A/1, A/8 and A/9. Instead of EUR 50, you pay EUR 200 for each of the three fixed taxes: registro, ipotecaria and catastale.

After five years, a builder's sale is generally exempt from IVA, unless the builder elects in the deed or in the preliminary agreement to apply IVA. On an exempt sale you pay 9% registration tax, as on a purchase from a private individual.

Two important differences: first, with IVA the base is the full price, and the prezzo-valore system does not apply. On an apartment of EUR 300,000, for example, the IVA alone is EUR 30,000. Second, if the price recorded in the deed and the invoice is lower than the real price, even a private buyer is jointly liable with the builder for the IVA on the difference and for the penalty. A private Israeli buyer is not registered for VAT in Italy and therefore cannot recover the IVA, so it is a final cost for that buyer.

4Can an Israeli benefit from prima casa?

Usually not. The benefit reduces the registration tax from 9% to 2% (and IVA from 10% to 4%), but it depends on where the property is located: in the municipality (comune) where you are registered as residents, or one to which you will move your residence within 18 months of the purchase. The intention to move must be stated in the deed itself, otherwise the benefit is lost.

The alternatives to the residence condition, and the additional threshold conditions, are limited:

• The municipality where you work or carry on an activity, including unpaid activity such as studies, volunteering or sport.
• A person who moved abroad for work reasons and previously lived or worked in Italy for at least five years: the municipality of birth, or the one where the person lived or worked before moving (Article 2 of Decree-Law 69/2023). This is relevant to some dual citizens who lived in Italy in the past.
• The property must be in an ordinary cadastral category. Properties in categories A/1, A/8 and A/9 are not eligible.
• You must not own another home in the same municipality, or another home in Italy bought with the benefit, unless you sell it within two years (for deeds from 1 January 2025).

An Israeli investor who buys an apartment for holidays or for rent, and does not intend to register residence in Italy, does not meet the conditions. A false declaration, or failure to move within 18 months, leads to loss of the benefit: payment of the tax saved, interest and a 30% penalty. It is therefore important to build the calculation on 9% from day one, and not to rely on a declaration that will not be fulfilled.

5How much do the notaio, the agent and the preliminary agreement cost?

The notaio's fees and the agent's commission are not taxes, and there is no uniform tariff that can be stated here. Both depend on the price, the complexity of the transaction and negotiation, so it is worth asking for a written quote in advance. Two points are fixed by law: under the prezzo-valore system the notaio's fees are reduced by 30%, and the deed must state the agent's details, the commission paid and the means of payment.

The preliminary agreement also has a cost. According to the Italian Revenue Agency guide, registering the compromesso involves a fixed registration tax of EUR 200 and stamp duty. On a deposit (caparra) or an advance on the price, in a sale not subject to IVA, a tax of 0.5% applies (for preliminary agreements from 2025), and it is credited against the tax payable on the final deed.

6What is IMU and how much does it cost per year?

IMU is the annual municipal property tax, and an Israeli who is not resident in Italy pays it in full. The exemption applies only to the main home, which according to the Department of Finance of the Italian Ministry of Economy (MEF) is a home where the owner is registered as resident and actually lives. Since 2020, a home of non-resident Italians registered with AIRE is also no longer treated as a main home.

The calculation: rendita catastale multiplied by 1.05 and by 160, for homes in group A (except A/10) and for storerooms and parking spaces in categories C/2, C/6 and C/7. A base rate of 0.86% applies to this base. Each municipality sets its own rate, from 0% up to 1.06%, and some municipalities may add a surcharge replacing the former TASI tax, up to 1.14% (as of October 2026).

The tax is paid in two instalments, by 16 June and by 16 December, or in a single payment by 16 June, using form F24 or a postal payment slip. Responsibility for calculating and paying on time lies with the owner, so owners living abroad usually rely on an accountant (commercialista) or on the property manager in Italy. Check the exact rate in the municipal council's resolution for that year.

7What else do you pay while holding the property?

TARI is the municipal waste collection tax. It applies to whoever holds premises capable of producing waste, even when the apartment stands empty: according to the MEF, a furnished home or one with a single utility connection is treated as taxable. The municipal council sets the tariff, and its regulation may grant a reduction for homes used seasonally or for people who live abroad for more than six months a year. It is worth checking whether the reduction exists and applying for it.

Beyond taxes there are running costs that are not taxes, such as condominium fees (condominio), insurance and maintenance. If you rent out the property, the income is taxed in Italy and reported in Israel. We cover this in our guide on rental income tax in Italy.

8How much tax do you pay in Italy when selling the property?

If you sell within five years of the purchase, the gain is taxable in Italy. After five years, a private individual is not liable to Italian tax on the gain. Even within the five years there are exceptions: a home used for most of the holding period as the main residence of the seller or of family members, and property received by inheritance. For property received as a gift, the five years run from the date on which the donor acquired it.

On a sale within five years there are two ways to pay. The first: ask the notaio, in the deed of sale, to apply a substitute tax (imposta sostitutiva) of 26% on the gain, which the notaio pays to the Revenue Agency. The second: include the gain in the annual Italian return and pay according to the income tax (IRPEF) brackets. The gain is the difference between the sale price and the purchase cost as defined by Italian law, and a local accountant will calculate which route is cheaper in your case.

9What does the Israel-Italy tax treaty provide?

The convention for the avoidance of double taxation was signed in Rome on 8 September 1995, ratified in Italy by Law 371 of 9 October 1997, and entered into force in 1998. Three articles matter to property owners:

• Article 6: income from immovable property, including rent, may be taxed in the state where the property is located.
• Article 13(1): gains from the alienation of immovable property are taxable in the state where it is located. The wording is not “only in that state”, so Israel may also tax its residents on the gain, and double taxation is relieved by a credit. Under Article 13(4), a gain from selling shares in a company whose assets consist mainly of immovable property in Italy is also taxable in Italy.
• Article 24(3): Italian tax paid on income or gains arising in Italy is credited against the Israeli tax on that income, up to the amount of Israeli tax attributable to it.

10What do you report and pay in Israel?

An Israeli resident is taxable on worldwide income, including a gain from selling property in Italy. According to a professional review by the accounting firm Ben Shushan, an apartment abroad is not a “right in land” under the Land Taxation Law, so land appreciation tax does not apply to it. It is an “asset” under section 88 of the Income Tax Ordinance, and the gain is taxed as a capital gain: up to 20% on the part accrued until the end of 2011 and up to 25% on the rest, on a linear calculation.

The tax paid in Italy is credited against the Israeli tax. If the Italian tax is higher, no additional tax is paid in Israel, but the excess is not refunded. The sale is reported to the assessing officer within 30 days (section 91 of the Ordinance), and also in the annual return.

• Sale within five years: you pay 26% or IRPEF in Italy, and in Israel the tax is calculated and the Italian tax is credited against it. There may be no difference left to pay, but the reporting obligation exists in any case.
• Sale after five years: there is no tax on the gain in Italy, so there is nothing to credit. In Israel the gain is fully taxable. This point surprises many investors.
• Keep all the documents: the purchase deed, invoices, proof of payment of the purchase taxes and the notaio's confirmation of the tax paid on the sale. Without them it is hard to prove the cost of the property and to obtain a credit.

One more note: owning an apartment abroad may affect “single apartment” status for purchase tax in Israel. If you also plan to buy an apartment in Israel, check this in advance with your tax adviser.

11Tax checklist before signing

1. Ask for the visura catastale and calculate the registration tax under prezzo-valore: rendita × 1.05 × 120 × 9%.
2. Find out whom you are buying from: a private individual, a builder within five years of completion (IVA), or a builder after five years.
3. Check the cadastral category. A/1, A/8 or A/9 means 22% IVA on a purchase from a builder, and no eligibility for prima casa.
4. Do not declare prima casa without a real plan to register residence in the municipality within 18 months.
5. Check the IMU rate in the municipal resolution and the TARI reductions in the regulation, and calculate the annual holding cost.
6. Transfer the money by a documented bank transfer. The deed states the means of payment, and the same documents will also serve you to prove the source of funds and to calculate the tax in Israel.
7. If you will not attend the signing, prepare a power of attorney in Israel with an apostille and translation, according to the notaio's requirements.
8. Plan the sale now: the five-year date, the choice of 26% through the notaio, and reporting in Israel within 30 days.

12What to do before signing the compromesso, and how we accompany you

Most of the taxes in Italy are determined already at the compromesso stage: whom you buy from, which tax route applies, what the cadastral value is and what will happen when you sell. The local acts, the deed, the collection of taxes and reporting to the authorities, are performed by a notaio and by licensed lawyers and accountants in Italy. We coordinate the work from Israel: we review the documents and the tax calculations before signing, look at the transaction from the perspective of an Israeli buyer, including the treaty and reporting in Israel, and make sure you know the full cost in advance, on purchase, while holding and on sale.

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