Italian Mortgage Costs
Every Fee and Tax Explained
The total cost of buying in Italy surprises most foreign buyers — not because of the mortgage itself, but because of the one-time closing costs. This guide lists everything, with a worked example on a €400k property.
Overview
Two categories of costs:
purchase costs and mortgage costs
Purchase costs — tied to the property
These are costs you pay regardless of whether you take a mortgage. They are linked to the act of buying the property: registration tax (or VAT), notary fees, and the real estate agent commission. These represent the largest share of the total and vary significantly based on whether the property is your primary residence (prima casa) or not.
For most expats buying as non-residents, these costs are higher — the prima casa reduced rate requires establishing Italian residency, which changes the calculation entirely.
Mortgage costs — tied to the loan
These are costs generated specifically by the mortgage: the imposta sostitutiva (a substitute tax on the mortgage amount), the bank's origination fee, the property appraisal, and mandatory insurance. These costs apply to all mortgages — prima casa and non-prima casa alike. The one significant difference is the imposta sostitutiva rate: 0.25% for primary residences vs 2% for all others.
Part 1
Purchase costs
Buying from a private seller
| Tax / Fee | Prima casa rate | Non-prima casa rate | Basis |
|---|---|---|---|
| Imposta di registro (registration tax) | 2% (min. €1,000) | 9% | Cadastral value |
| Imposta ipotecaria (mortgage tax) | €50 fixed | €200 fixed | Fixed amount |
| Imposta catastale (cadastral tax) | €50 fixed | €200 fixed | Fixed amount |
| Notary fees | ~1–2% | ~1–2% | Purchase price |
| Real estate agent commission | 3–4% | 3–4% | Purchase price (each side) |
Buying from a developer (VAT applies)
| Tax / Fee | Prima casa rate | Non-prima casa rate | Basis |
|---|---|---|---|
| IVA (VAT) | 4% | 10% (or 22% for luxury) | Sale price |
| Imposta di registro (registration tax) | €200 fixed | €200 fixed | Fixed amount |
| Imposta ipotecaria (mortgage tax) | €200 fixed | €200 fixed | Fixed amount |
| Imposta catastale (cadastral tax) | €200 fixed | €200 fixed | Fixed amount |
| Notary fees | ~1–2% | ~1–2% | Purchase price |
Part 2
Mortgage costs
| Fee | Prima casa | Non-prima casa / Non-resident | Notes |
|---|---|---|---|
| Imposta sostitutiva (substitute tax) | 0.25% of loan | 2% of loan | Applied to the mortgage capital — not the property value |
| Bank origination fee (istruttoria) | €500 – €1,500 | €500 – €1,500 | Applies to all mortgages; varies by bank, sometimes waived |
| Property appraisal (perizia) | €200 – €400 | €200 – €400 | Required by the bank before approval — applies to all mortgages |
| Fire & structural insurance (scoppio e incendio) | €150 – €400 / year | €150 – €400 / year | Mandatory for the life of the mortgage — applies to all mortgages |
Worked example
€400k property · €240k mortgage
Non-resident buyer, private seller
Purchase costs
| Registration tax (9% on cadastral value ~€180k) | ~€16,200 |
| Imposta ipotecaria + catastale | €400 |
| Notary (~1.2%) | ~€4,800 |
| Real estate agent (3.5% each side) | ~€14,000 |
| Total purchase costs | ~€35,400 |
Mortgage costs
| Imposta sostitutiva (2% of €240k) | €4,800 |
| Bank origination fee | ~€1,200 |
| Property appraisal | ~€350 |
| Total mortgage costs | ~€6,350 |
Can expats access prima casa rates?
Yes — under specific conditions. To qualify for prima casa tax treatment, you must either already have your residency registered in the municipality where the property is located, or commit to establishing it within 18 months of purchase.
For relocating expats using the Impatriati regime, this creates a direct link between the mortgage process and the fiscal residency deadline. The property must be purchased and registered before the end of the fiscal year in which you want the tax benefit to apply.
For non-residents buying a vacation or investment property, prima casa is typically not available — and the 9% registration tax and 2% imposta sostitutiva apply.
What "cadastral value" means in practice
Italian property registration tax is calculated on the valore catastale — the cadastral value assigned by the tax authority — not on the agreed purchase price. For most residential properties, the cadastral value is meaningfully lower than the market price.
As an example: a property purchased for €400,000 in central Milan might carry a cadastral value of €150,000–€200,000. The 9% registration tax is applied to the cadastral value, not the purchase price — which reduces the actual liability compared to a simple percentage of purchase price.
New-build properties purchased directly from developers do not benefit from the cadastral value system — VAT is applied to the full sale price.
FAQ
Common questions about costs
Italian notary fees (onorario notarile) typically range from 1% to 2% of the purchase price, decreasing as a percentage for higher-value transactions. On a €400,000 property, expect approximately €3,500–€5,000. Notaries are regulated professionals — their fees follow a professional scale but are not fixed by law, and can vary between notaries.
The imposta sostitutiva is a substitute tax on the mortgage amount — 0.25% for a primary residence (prima casa), 2% for all other cases. On a €240,000 mortgage: €600 as prima casa, €4,800 as non-prima casa. It is paid at the time of mortgage signing through the notary.
VAT (IVA) applies only when buying from a developer — typically for new-build properties or properties sold within 5 years of construction. For prima casa, IVA is 4%; for non-prima casa, 10% (or 22% for luxury properties A/1, A/8, A/9). When buying from a private individual, registration tax applies instead of VAT.
Yes — unlike some markets, Italian real estate agents typically charge commission from both the buyer and the seller. Rates vary by agent, location, and property type, but 3–4% per side is common in major cities. This is negotiable. On a €400,000 property, a 3.5% commission represents €14,000 — one of the largest single closing costs.
As a general rule, budget 8–12% of the purchase price in closing costs, on top of your down payment. The exact figure depends on whether you qualify for prima casa rates, the seller type (private or developer), and the real estate agent commission. Non-resident buyers without prima casa access typically land toward the higher end of this range.
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