Authored by the expert who managed and guided the team behind the Italy Property Pack
Yes, the analysis of Milan's property market is included in our pack
Thinking about investing in property in Milan? It's a city rich in culture, history, and style, making it an attractive option for many.
But before you dive in, it's crucial to understand the taxes and fees involved. What are the costs you should anticipate? Are there any hidden charges? How do these expenses compare to other cities?
In this article, we'll break down everything you need to know about property taxes and fees in Milan.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Italy Property Pack
Property Taxes and Fees in Milan
In Milan, property taxes and fees are essential considerations for property owners and investors. Below is a detailed table outlining the various taxes and fees associated with property ownership in Milan, including their rates and descriptions.
| Tax/Fee | Description | Rate/Amount |
|---|---|---|
| IMU (Imposta Municipale Unica) | Municipal property tax applicable to second homes and luxury properties. | 0.4% to 1.06% of cadastral value |
| TASI (Tassa sui Servizi Indivisibili) | Tax for indivisible services provided by the municipality, such as street lighting and road maintenance. | 0.1% to 0.33% of cadastral value |
| TARI (Tassa sui Rifiuti) | Waste management tax based on the size of the property and number of occupants. | Varies by property size and usage |
| Registration Tax | Tax paid upon the purchase of a property, applicable to both new and existing properties. | 2% to 9% of purchase price |
| Notary Fees | Fees paid to the notary for handling the legal aspects of property transactions. | 1% to 2.5% of property value |
| Land Registry Tax | Tax for registering the property in the land registry. | Fixed fee of €50 to €200 |
| Mortgage Registration Tax | Tax applicable if a mortgage is taken out on the property. | 0.25% of mortgage amount |
| VAT (Value Added Tax) | Applicable to new properties purchased from a developer. | 4% to 22% of purchase price |
| Condominium Fees | Fees for maintenance and services in shared residential buildings. | Varies by building and services |
| Capital Gains Tax | Tax on the profit made from selling a property. | 20% of capital gain |
| Inheritance Tax | Tax on property inherited from a deceased person. | 4% to 8% of property value |
| Gift Tax | Tax on property received as a gift. | 4% to 8% of property value |
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What You Need to Know Before Buying Property in Milan
What is the IMU tax rate for properties in Milan?
The IMU (Imposta Municipale Unica) is a municipal property tax applicable to second homes and luxury properties in Milan.
The standard IMU tax rate in Milan is approximately 0.76% of the cadastral value of the property.
However, this rate can vary depending on the specific characteristics and location of the property.
Are there any exemptions from the IMU tax?
Primary residences in Milan are generally exempt from the IMU tax, except for luxury properties classified in certain cadastral categories.
Properties owned by certain non-profit organizations or used for specific purposes may also qualify for exemptions.
It is important to verify the specific conditions and requirements for exemptions with the local tax authorities.
What is the TASI tax and how is it calculated?
The TASI (Tassa sui Servizi Indivisibili) is a tax that covers the cost of indivisible services provided by the municipality, such as street lighting and road maintenance.
In Milan, the TASI rate is typically set at 0.1% to 0.25% of the cadastral value of the property.
The exact rate can vary based on the type of property and its use, so it's advisable to check with the local municipality for precise calculations.
How much are the notary fees when purchasing a property in Milan?
Notary fees in Milan are generally calculated as a percentage of the property's purchase price.
These fees typically range from 1% to 2% of the purchase price, depending on the complexity of the transaction.
It is important to budget for these costs as they are a mandatory part of the property purchase process.
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What are the registration fees for property transactions in Milan?
Registration fees are required to officially record the property transaction with the Italian land registry.
For residential properties, the registration fee is usually 2% of the cadastral value for first-time homebuyers and 9% for others.
These fees are typically paid by the buyer and are an essential part of the property acquisition process.
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Are there any additional taxes for non-resident property owners in Milan?
Non-resident property owners in Milan are subject to the same property taxes as residents, including IMU and TASI.
However, non-residents may face additional tax obligations in their home country, depending on international tax treaties.
It is advisable for non-residents to consult with a tax advisor to understand their full tax liabilities.
What is the cost of property insurance in Milan?
Property insurance in Milan is not mandatory but is highly recommended to protect against potential risks such as fire, theft, and natural disasters.
The cost of property insurance typically ranges from €200 to €500 per year, depending on the coverage and value of the property.
Insurance premiums can vary based on factors such as location, property type, and the insurer's policies.
How are property taxes paid in Milan?
Property taxes in Milan are usually paid in two installments, with deadlines typically set in June and December.
Payments can be made through various methods, including online banking, postal services, or directly at authorized banks.
It is crucial to adhere to the payment deadlines to avoid penalties and interest charges.
What are the consequences of late payment of property taxes in Milan?
Late payment of property taxes in Milan can result in penalties and interest charges, which increase the overall tax liability.
The penalty rate is generally 0.2% per day of delay, up to a maximum of 30% of the unpaid tax amount.
To avoid these additional costs, it is important to ensure timely payment of all property-related taxes.
Are there any tax incentives for energy-efficient properties in Milan?
The Italian government offers tax incentives for property owners who invest in energy-efficient upgrades, such as solar panels or improved insulation.
These incentives can include tax deductions of up to 65% of the cost of the improvements.
Property owners should consult with a tax professional to determine eligibility and the application process for these incentives.
What is the role of a real estate agent in the property tax process in Milan?
A real estate agent in Milan can provide valuable assistance in understanding and navigating the property tax obligations associated with a purchase.
They can help estimate the taxes and fees involved and ensure that all necessary paperwork is completed accurately.
While not mandatory, engaging a knowledgeable real estate agent can simplify the property acquisition process and help avoid potential pitfalls.
How does the cadastral value affect property taxes in Milan?
The cadastral value is a key factor in determining property taxes in Milan, as it serves as the basis for calculating IMU and TASI.
This value is assigned by the local land registry and may not reflect the current market value of the property.
Property owners should verify the cadastral value and consider any potential discrepancies when budgeting for taxes.