How much do you have to pay to register a rental contract in Italy? What are the costs involved? Let's have a look at everything you need to know, according to the Italian Inland Revenue.
For the registration of a rental contract in Italy you have to pay the registration tax and stamp duty. If specific requirements are met, you can opt for the dry coupon, an optional tax regime in Italy.
Lease registration fee
The amount of registration tax payable for the registration of a lease in Italy varies according to the property rented or leased. For buildings for residential use the percentage is equal to 2% of the annual rent multiplied by the number of years; for industrial buildings by nature the percentage is equal to 1% of the annual rent if the lease is carried out by VAT taxable persons, while it is equal to 2% of the rent in other cases; for rustic buildings the percentage is equal to 0.50% of the annual fee multiplied by the number of years; for other buildings the percentage is equal to 2% of the annual fee.
Registration tax for the agreed rental contract
In the case of rental agreements with agreed rent, which relate to properties located in one of the municipalities with high residential tension, there is a 30% reduction in the tax base on which the registration tax is calculated. As a result, 70% of the annual fee that must be taken into account for the calculation of the tax must ne charged.
As explained by Inland Revenue in Italy, the payment for the first year cannot be less than 67 euros. In addition, the lessor and the tenant are jointly liable for the payment of the full amount due for the registration of the contract. No registration tax is due on the security deposit paid by the tenant, but if the deposit is paid by a third party unrelated to the rental relationship, the tax must be paid at the rate of 0.50%.
Registration tax for subsequent years of the lease
For a lease that lasts several years, you can decide to pay the tax due for the entire duration of the contract (2% of the total consideration) at the time of registration; or to pay the tax year by year (2% of the rent for each year, taking into account Istat increases), within 30 days after the expiry of the previous year. By opting for the latter option, the tax for subsequent years may also be less than 67 euros.
If you choose to pay for the entire duration of the contract, you are entitled to a deduction from the tax due equal to half of the legal interest rate (0.5% for 2015 and 0.2% from 1 January 2016) multiplied by the number of annuities.
If the contract is terminated prematurely and the registration tax has already been paid for the entire duration, the amount paid for the years following the year in which the contract is prematurely terminated will be refunded.
For the extension of the rental contract for residential property, the tax can be paid as a lump sum or year by year. For terminations and transfers without consideration of rental and subletting of urban property with a duration of several years, the tax must be paid at a fixed rate of 67 euros. In other cases, the tax applies to rentals still due at the rate of 2% or 0.5% in the case of rustic funds.
Stamp duty on the lease contract
The stamp duty for a lease is 16 euros for every 4 written sides of the contract and, in any case, every 100 lines. The stamp duty is paid for each copy to be registered.