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Do you have a property you want to get rid of? In this Casavo article you will find all the necessary information on how to sell a second home: strategies to speed up the negotiation, the taxes to be paid and the activities to be carried out once the sale is concluded. The sale of a second home in Italy involves a 26% tax on the capital gain, if sold within 5 years of purchase. For those who sell after 5 years, capital gains tax does not apply.
Selling a second home: how to best manage it
Managing an additional property in addition to your primary residence can sometimes be more of a hassle than a pleasure. Second homes are burdened by maintenance taxes, including IMU, the single municipal tax. IMU is calculated based on municipal rates and parameters and can be reduced by 50% if the property is loaned free of charge to a first-degree relative. These charges reduce the benefits deriving from rent and other income. In addition to taxes, there are also maintenance costs which, in the case of extraordinary interventions, remain the responsibility of the owners.
The advice on how to sell a second home is not much different from that for selling any home quickly.
First of all, make sure you have the documents in order and, if necessary, recover any missing ones. Then dedicate yourself to small jobs to fix problems and blemishes that risk turning away buyers. Finally, focus on a quality photography service to offer captivating images to publish in the ad.
Once you've arranged every detail to present it at its best, you can get an idea of the property's value with our online tool for a free valuation.
Now that it's ready for sale and you know its base price, you still need to figure out the transfer taxes. Read on to find the answer to the question "What happens if I sell my second home?" and to find out all the details about taxation.
What are the taxes for selling a second home?
If you're planning to sell your property, you're probably wondering what taxes are paid on the sale of a second home. First of all, we remind you that Article 1475 of the Civil Code establishes that taxes, expenses, and notary fees for sales contracts are always paid by the buyer. The registration tax, calculated as a percentage of the property's cadastral value, is one of the main taxes to consider. The person selling the property is subject to a contribution only for the potential gain derived from the sale.
The taxes on real estate sales include two different options for taxing any capital gains generated by the transaction – that is, the increase in value compared to the purchase price. Sales taxes can vary depending on whether the property is between private individuals, received as a gift, or the sale of a primary residence. The element that makes the difference in the calculation, as you can see in the summary infographic, is time.
Let's look at the details relating to taxation on earnings in the next paragraphs.
Taxes to be paid for those selling a house inherited or purchased less than 5 years ago
What are the taxes for those selling a second home? If less than five years have passed since the purchase or transfer of ownership due to inheritance, you will be required to pay taxes on the increase in value resulting from the negotiation, exactly as for first homes. Let's say, for example, that you bought an asset for €100,000 and after a year you resell it for €120,000: the taxes apply to the €20,000 capital gain between one contract and the next.
But how is this amount calculated? You have two options:
- include this gain in your tax return and calculate the amount based on the IRPEF rate corresponding to your income level;
- opt for the flat substitute tax of 26%.
Generally speaking, it is almost always more convenient to opt for the substitute tax to reduce the tax burden.
Taxes to be paid for those who sell a house inherited or bought more than 5 years ago
It's a different story if you Ask what the taxes are for selling a second home owned more than 5 years ago. In these cases, no IRPEF payments are foreseen on any increase in value.
As regards inherited properties, the inheritance tax will still have to be paid according to the tables established based on the degree of kinship with the deceased person.
What to do after selling a second home
Now that we've clarified the tax burden, we need to understand what happens if you sell your second home. Selling a home also entails a series of reporting obligations and administrative requirements. The former owner remains responsible for some communication obligations relating to the recently concluded sale.
Here are the required obligations:
- in the case of an apartment in a condominium, notify the administrator of the transfer for all adjustments relating to internal notifications and condominium fees;
- notify the Municipality where the home is located of the change of ownership for the reassignment of all related taxes;
- notify the police headquarters or the local police station with a note issued by the notary after the deed;
- take care of the termination or transfer of household utilities.
After completing these administrative procedures, you can declare your obligations towards your now former second home concluded.
As you can see, the tax and compliance framework isn't particularly challenging: the most complicated step is finding the best buyer for your needs. To speed up the process, why not take advantage of the advantages that Casavo offers you? In addition to taking advantage of our free valuation tool, you can receive a direct purchase offer from us in just a few steps via our app. You understood correctly: if it meets our parameters, we will buy your property and sell it to you in about 30 days. Alternatively, we will help you find the right people to close the deal quickly and safely!
Do you want to sell your house?
We'll buy it for you, even in 30 days, or we'll help you find the perfect buyer.