In this article you will find references related to paying taxes when you are about to buy a gare from construction company. Registration tax? VAT? What is the correct rate? You will need this information to get a good idea of what the fees will be before you make a purchase proposal.
What taxes are payable when buying a garage
The other day I had a confrontation with a colleague within one in the chat of the Fimaa (Italian Federation of Business Agent Brokers) members' group, of which I am a councilor with responsibility for communication.
An associate was asking for our "support" regarding taxes that one of her clients would have to pay regarding the purchase of a garage from a construction company.
He wished to know for sure what to communicate to his client and did not know what VAT rate the sale was subject to.
I argued that since the garage was not appurtenant, that is, not connected to the purchase of a 'home, it was a sale subject to 22% VAT on the price declared in the deed, while my colleague argued that the sale was subject to 10% VAT.
Since I am someone who gets to the bottom of issues, I decided to read up on it and find the exact normative references governing the issue.
Online, unfortunately, there is anything and everything, and especially when it comes to taxes and fees, everyone has their own version.
I then decided to consult my notary public, who immediately clarified the issue.
Regulations on the purchase of a garage from a company
The legislation referred to in the above case history is from 1949 and is called the "Tupini Law" (Law 408, 02.07.1949 art.13), this in fact identifies whether the garage is subject to 10 or 22% VAT.
The standard reads:
The requirements for Tupini buildings include all non-luxury buildings that have at least 50 percent of the total above-ground area used for housing and no more than 25 percent used for commercial space.
When to pay 10% VAT in garage purchase
If you are buying a garage included in a condominium with the following characteristics:
- The condominium consists of living quarters and commercial premises;
- the property is not stacked as a luxury property;
- more than 50% of the above-ground area of the property is devoted to residential use/housing;
- no more than 25 percent of the building area is devoted to commercial activities.
the property falls under the "Tupini building" category and therefore, the purchase of a garage by a company will be subject to 10% VAT on the declared price
When to pay 22% VAT in the purchase of a garage
While if it is a purchase made in a condominium with a large basement and many stores, the sale will be subject to vat 22%. As for taxes (mortgage and cadastral) they should be calculated in both cases at the rate of 3 % ( respectively, 2% and 1%) always calculated on the declared value, with a minimum to be paid of 200 € each.
Examples for vat calculation in the purchase of a garage
Example:
Garage purchased in a building with "tupine" requirements
- Garage Value €10,000
- VAT payable: €1,000
- Hypocatastical taxes to be paid to be paid €400
Garage purchased in a building "NOT Tupini"
- Garage Value €10,000
- VAT payable €2,200
- Mortgage taxes payable €400
How to pay reduced vat by buying a garage
There is actually a way to further reduce the vat for this type of purchase. If one succeeds in having the garage purchased, as an appurtenance of a dwelling ( the appurtenance must be located within a radius of 500 m from the dwelling) the vat in question can be 10% even in the case of "NON Tupini" buildings and, in the case where the garage purchased is the only appurtenance of the dwelling and the latter was purchased with "first home" benefits the garage purchased in that case can enjoy the first home benefits, i.e., areduced vat at 4%.
