Practical tips for homebuyers and people new to Sicily

Before making any real estate purchase, you should make sure you have fully understood the tax implications, whether you intend the property to be a holiday home, a permanent residence or a buy-to-let investment. Under certain circumstances, you may be entitled to significant tax benefits. You should consult a qualified tax advisor in advance - we can help you find a trustworthy source of advice if needed.

Pensioners benefit from significant tax breaks in Sicily! If you become domiciled and legally resident here, you will benefit from a flat-rate 7% income tax for the next 6 years. You can find the relevant law here.

Grants for property renovation: Unlike when constructing a new house, the rennovation of an existing building may entitle you to obtain certain subsidies. If you are renovating in an old town centre, you may qualify for an interest-free loan, which could be transferable even in the event of a subsequent sale. Of course, loans would be contingent on a credit check from an Italian bank, which can be very difficult without having an income in Italy. However, when upgrading a property, for example with earthquake proofing and insulation you will find that the Italian state can be extremely generous. For example, in 2019 it is possible to be reimbursed for up to 65% of the cost of such work (excl. VAT). This benefits not only the environment, but helps in the fight against the black market economy. These generous subsidies will require regular invoices produced by all the workers/construction businesses involved in the renovation. Apart from that advantage, remember also that if you decide to accept black market work (even if it it slightly cheaper than official work), the work done will not be covered by any guarantees. But how does this all work for homeowners who are not Italian taxpayers? You will need a tax accountant who can help you complete the relevant forms IN ADVANCE. 

A practical example: We have recently replaced all the windows in our own house at a cost of €22,000.00 (+VAT). Of course, we pay income tax here and so for the next 10 years our tax bill will be reduced by €1,210.00 annually. So in the end the windows cost us just €9,900.00. If you do not have a tax bill here, or want to get a discount immediately, you can also transfer this tax rebate to the supplier or contractor. Obviously, this route you should not expect their discount to be over than 55% - perhaps 40% is more likely – as they will have to wait 10 years to receive the full sum, but it is at least a significant saving. As this generosity is obviously expensive for the state, the law is renewed every year, based on available funding – but this is the 2018/19 situation. This scheme is not dependent on being resident here. You can read the law in Italian here.


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