Prezzo-valore: taxing a home on its cadastral value

The formula

The Agenzia delle Entrate (the tax agency) gives two formulas, one for each regime:

• Ordinary purchase: cadastral value = rendita catastale × 1.05 × 120.
• Prima casa purchase: cadastral value = rendita catastale × 1.05 × 110.

The registration tax rate (9% or 2%) is then applied to that value, not to the price. The 1.05 is the 5% revaluation of the cadastral income. The rendita itself is the figure on the cadastral record of the property; ask for the record before you rely on any estimate (see cadastral income and value and cadastral searches).

The Agenzia’s worked example

The Agenzia’s own example uses a cadastral income of €900 and a price of €200,000:

The difference in that example is €7,794 at the ordinary rate and €1,921 with prima casa. The figures belong to the example; your cadastral income will differ. The rule is a formula, and a low rendita gives a low base.

Who can use it

The Agenzia sets four conditions, which all have to be met:

1. The sale is subject to proportional registration tax, so a sale with VAT is excluded.
2. The buyer is an individual not acting in a commercial, artistic or professional capacity. A professional buying a studio cannot use it.
3. The building is a dwelling (with its pertinences). It works with or without the prima casa relief.
4. The buyer expressly asks the notary, in the deed of purchase. A later supplementary deed cannot contain the request.

The rule therefore covers sales between two private persons, sales to individuals by sellers who are not subject to VAT (associations, foundations), and sales to individuals by companies that sell exempt from VAT. It extends to bare ownership and usufruct, and to purchases at a forced sale or a public auction, again only for dwellings and pertinences. For pertinences, the Agenzia requires an own cadastral income, a clear accessory link to the dwelling, and the link stated in the deed.

You must still declare the real price

Prezzo-valore changes the tax base, not the price on paper. The parties must state the agreed price in the deed. If the price is hidden, even in part, the taxes are computed on what was actually agreed, and a penalty of 50% to 100% of the difference between the tax due and the tax already applied is added. If the deed states a cadastral value lower than the legal formula produces, the rule is not disapplied: the Agenzia asks for the extra tax that the correct value implies.

What else you gain

Two advantages, again according to the Agenzia:

• Limits on valuation checks. The Agenzia cannot make a value assessment for registration tax, except where the price was hidden, and the rules on income-tax assessment based on simple presumptions do not apply to buyers who use the rule.
• A 30% reduction in the notary’s fees. The reduction is a percentage of the fee; it is not a fee figure, and Italian law sets no notary tariff (a notary must give a written estimate in advance under D.L. 1/2012). Ask your notary what the reduction comes to on the quote.

The declarations that go with it

In any sale of real estate, even with VAT, the deed must carry a sworn substitute declaration on how the price was paid, whether an agent took part (with the agent’s identification and registration data), and the agent’s fee and how it was paid. The Agenzia states a sanction of €500 to €10,000 for a missing, incomplete or untrue declaration, and says that in that case the sale is open to a value assessment even if the buyer asked for cadastral taxation. The deed must also state the cadastral data and the plans on file, with a declaration that the home matches them, on pain of nullity. This is why a mismatch between the property and the cadastral plan has to be settled before the signing.

Why it matters for foreign buyers

A buyer relying on a price in a listing may expect a tax of 9% or 2% of that price. With prezzo-valore, the bill can be far lower, but only if the notary is asked at the right moment. Raise it when you instruct the notary, and before the preliminary contract is signed. See registration tax for the base case.

Which professional to consult

The notary applies the rule at the deed. A surveyor (geometra) can check that the cadastral record and plans match the real home before you sign.