New build or resale in Italy: VAT against registration tax

Two regimes, one test

The Agenzia delle Entrate (the tax agency) separates the cases by the seller. A private seller, or a company selling exempt from VAT, gives the resale regime: proportional registration tax with €50 mortgage tax and €50 cadastral tax. A builder or restorer selling within five years of completion, or later if the seller opts for VAT, gives the VAT regime: VAT on the price and €200 each of registration, mortgage and cadastral tax. The tests are explained in VAT on a new build and registration tax.

So a flat completed three years ago and sold by the builder is a VAT sale, while a flat completed three years ago and sold by its first owner is a resale. A home sold by the builder after five years can go either way, depending on whether the builder chooses VAT; that choice has to be stated in the preliminary contract or the deed.

Side by side on one price

Calculation with official rates on a price of €350,000 for a home in a category that qualifies for prima casa (A/2 to A/7, A/11). The price is the same in every column to isolate the tax; in practice new and resale homes are priced differently.

The prima casa gap here is €7,500 in favour of the resale; the ordinary gap is €4,000. These are calculations, not quotes, and they exclude the notary’s fee. For a luxury category (A/1, A/8, A/9) neither relief exists: 9% on a resale, 22% VAT in a builder’s sale.

What the table hides

Price. Builders and private sellers do not price alike, and a tax difference of a few thousand euros can be smaller than a price difference of one or two per cent. Compare the total, not the tax line.

Base of the tax. In a VAT sale the base is always the price. In a resale to an individual the buyer can ask for taxation on the cadastral value (prezzo-valore), which can make the resale far cheaper; the Agenzia’s example with a €900 cadastral income and a €200,000 price gives €10,206 against €18,000 at the ordinary rate. The mechanism is in prezzo-valore. It is unavailable on a VAT sale.

Deposits. In a resale, the Agenzia says the registration tax already paid on a deposit when the preliminary contract is registered reduces the tax payable at the deed. That is a feature of the proportional-tax regime.

Re-purchase credit. If you are selling a home bought with prima casa and buying another within a year, the tax credit equals the registration tax or VAT paid on the first purchase, in either regime, and is capped at the tax due on the second purchase (selling before buying).

Questions to ask the seller

1. Is the sale subject to VAT, and why? The answer should be in the preliminary contract.
2. If VAT applies, at which rate, and is the prima casa declaration made in the preliminary contract?
3. Is the home’s cadastral category A/1, A/8 or A/9?
4. For a resale, would the buyer qualify for prezzo-valore, and does the notary agree to apply it?

A seller’s agent can answer the first and second; the notary should confirm them.

Non-tax differences you should not ignore

The sources read for this guide cover tax only. A home still under construction raises questions of completion, planning conformity and guarantees that are outside this page; see due diligence and urban-planning compliance for the checks that apply to any purchase.

What varies locally

None of the rates above varies by region. The annual IMU depends on the municipality, and the prima casa residence test is applied by municipality. Land-book areas (Trento, Bolzano, Trieste, Gorizia and part of Udine) were not covered in the sources read for the registration-tax rules, so ask the notary there.

Which professional to consult

The notary tells you which regime a given sale falls under, and an accountant can compare the two on your own tax position. For a home still to be built or just completed, a surveyor or an architect can read the plans and completion papers.