Selling in 2025? Expect a 26% Capital-Gains Hit and These Hidden Italian Costs

Practical tax points for sellers and investors

• Check whether you meet the five-year ownership or primary residence exemption before committing to a sale. If you are close to five years of ownership, delaying the sale could save you the 26% tax on the gain.
• Non-resident sellers should obtain specific advice because cross-border tax treaties and the Italian tax authority rules affect how gains are reported and paid.
• Keep receipts and invoices for renovations and acquisition costs. Good recordkeeping lowers your taxable gain.

Non-resident sellers: what changes and what stays the same

Non-resident sellers face the same tax framework as residents for Plusvalenza, but there are practical differences that matter to investors and expats.

• Non-residents may not qualify for the prima casa exemption except in narrow situations. That means a former holiday home or a second home in Italy may be fully taxable on the gain.
• Cross-border tax reporting is necessary. Gains may need to be declared both in Italy and in the seller’s country of tax residence, subject to double-taxation agreements.
• Currency movements do matter if you bought in one currency and sell in euro. Exchange rate differences can affect the effective gain when converted to your home currency.

If you are non-resident, take professional tax advice ahead of listing. I have seen non-residents under-budget the tax bill and have to renegotiate sales or withdraw money late in the process.

How these costs affect your net proceeds: an illustrative example

Below is a simple, labelled example to show how the different costs combine. This is illustrative only, not tax advice.

Example scenario (illustrative):

• Sale price: €300,000
• Original purchase price: €200,000
• Documented renovation costs and acquisition costs: €10,000
• Agent fee (seller): 3% of sale price = €9,000
• Lawyer: 1.5% of sale price = €4,500
• APE + valuation + minor admin: €450
• Mortgage cancellation: €1,000

Tax calculation:

• Taxable capital gain = €300,000 − €200,000 − €10,000 = €90,000
• Capital gains tax at 26% = €23,400

Net proceeds (illustrative):

• Gross sale price: €300,000
• Less agent: €9,000
• Less lawyer: €4,500
• Less administrative costs: €1,450
• Less capital gains tax: €23,400
• Net to seller: €261,650

In this example the headline tax is the largest single deduction after the sale price, and professional fees and administrative costs are meaningful. If the property had been the seller’s primary residence for the period of ownership, the €23,400 tax could be avoided, which shows how exemptions alter outcomes.

Practical checklist for sellers and investors

Use this checklist when you prepare to sell in Italy:

• Confirm your residency status for tax purposes and whether you qualify for the prima casa or five-year exemption.
• Order the APE early and commission any necessary valuations.
• Decide whether to use an agent and negotiate the commission and exclusivity period in writing.
• Hire a lawyer if there are title, planning or cross-border tax issues.
• Gather invoices and receipts for purchase, improvements and selling costs to reduce taxable gain.
• Check with your lender the cost and timing to cancel any mortgage.
• Consider timing the sale if you reach the five-year ownership mark shortly; this can remove the Plusvalenza tax.

We advise building a buffer of at least 5%–10% of the sale price for unforeseen legal, administrative or tax-related costs when planning your net proceeds. That number varies by property type and region, but it is a sensible starting point.

Risks and common pitfalls I see in practice

Selling is not just a financial transaction; it is an administrative one. Common mistakes we see include:

• Failing to document renovation and acquisition costs, which increases your taxable gain
• Assuming the buyer will always pay notary fees; in tight markets buyers press harder on price and may expect sellers to cover some charges
• Overlooking mortgage cancellation costs and timing issues with lenders
• Non-residents not checking cross-border tax reporting and withholding rules, leading to unexpected secondary liabilities

You can avoid most of these risks with early professional advice and clear paperwork.

Frequently Asked Questions

Do sellers always pay the notary fees in Italy?

Not always. The buyer usually pays notary fees in a private resale, but parties can agree to share costs. The notary role is mandatory and fees typically range from 1%–2.5% of the sale price.

Will a capital gains tax apply if the property was my main home?

If the property was your main home for most of the ownership period, you are generally exempt from capital gains tax. Also, if you have owned the property for more than five years, you usually do not have to pay Plusvalenza.

How much does an APE cost and when must I get it?

An Energy Performance Certificate (APE) typically costs €100–€300. It is required before you market the property and must be provided to the buyer during the sale process.

I am a foreign seller; can I avoid the 26% tax?

Non-resident sellers follow the same capital gains rules, but they may not qualify for the prima casa exemption unless they meet residency conditions. Check double-taxation agreements and get local tax advice before selling.

Bottom line practical takeaway

Plan for a significant tax and fee burden when selling in Italy: the 26% capital gains rate in 2025 is often the single largest deduction for taxable gains, and agent, legal and notary fees add further costs. If you have owned the property for more than five years or it has been your primary residence, those exemptions can remove the capital gains tax, which is why checking residency and ownership timelines is the first practical step I recommend before listing a property.