A credible buying budget includes the property, transaction taxes, independent professional advice, financing costs where applicable and a reserve for the first year of ownership.
The principal purchase taxes
IMT is the municipal property transfer tax paid by the buyer. Its calculation depends on matters including the property value, location and intended use. Stamp duty on the property purchase is generally 0.8% of the value used as the IMT base.
Rates and thresholds can change. Do not rely on an old blog table or a rough percentage when you are preparing an offer; ask your lawyer or tax adviser to calculate the current amount for the specific purchase.
- IMT transfer tax
- Stamp duty on the purchase
- Stamp duty and bank costs if financing
- Registration and completion costs
Professional and practical costs
Budget separately for independent legal work, a technical inspection or survey, mortgage advice and valuation where relevant, translations or powers of attorney, currency transfer, insurance and immediate repairs or furnishing.
The least expensive adviser is not automatically the best value on an international purchase. Ask what is included, what triggers additional fees and whether a written report will be provided.
Owning the property
Annual ownership can include municipal property tax, condominium charges, insurance, utilities, maintenance and, for higher-value holdings, additional tax considerations. Coastal and historic homes may require a larger maintenance reserve than their photographs suggest.
Separate one-time acquisition costs from recurring ownership costs and from discretionary renovation. That simple distinction makes property comparisons much more honest.