Local Construction / Renovation Tax??

Hi,

we purchased a property last year and now start the renovation process. We were just informed by the architect that he met with the local commune to discuss the "additional tax" that will have to be paid by is to the local commune based on the construction cost of the renovation.
Does anyone know how this is calculated?
We already paid a heft tax when we purchased the property and of course we will have to pay property tax once the building is finished.
But what is the purpose and of course the calculation behind the "renovation" tax?

thanks

Hi, you have to pay a fee to the comune for renovating or extending a property. It is usually a certain amount per sqm to make it easy to administer but it can be calculated in other ways and in theory is based in the difference in value from what it was to what it will be once finished. I have only come across comuni that use a fee per sqm. Where I live it is €93 a sqm for new build (including extensions) and half that for renovations. It can add up to a pretty sum!

There are all different types of planning permits, some newer ones mean you do not have to pay these fees (oneri in Italian) but generally speaking if you are a private person doing a full renovation/new build/extension you will have to pay it.

As to what it's purpose is, other than to put some money in the coffers of your local comune, I'm afraid I don't have a clue!

There is also an additional fee payable to the comune for change of use of any part of the building. So, for example if you convert a cantina into a kitchen you must pay a change of use fee to the comune.

Apart from the architect's fee there will also be the fees payable for registering the new layout of the building with the urban building register.

Its usually between 1 and 3% of the works done (though Ive heard of some comunes who ask 8%) and is now the principal source of income for the comunes.  It has nothing to do with purchase taxes or IMu or anything else. Its what you pay to the comune for them to move paper around and allow you to build/restore - or anything that requires a concessione edilizia.

Hi, payments to local authorities concerning renovations and extensions apply practically throughout the world. The moment a building permit is issued, a tax is due, even in the USA http://www.homeadvisor.com/cost/architects-and-engineers/get-a-building-permit/
Costs may vary according to the region.
Also, a new valuation will be made and the original "cadastale"  value at the Property Registry will be altered to reflect that. Obviously, you will have to pay more in property taxes according to the new valuation. Sorry, it is not nice news if you were not prepared....

This example just goes to show the need to have a good Geometra or Architect on board when buying any property in Italy. It is imperitive that one asks all the questions on costs involved when buying, renovating and selling, specifically related to the Comune where you are, it is very easy at the purchasing stage to get carried away in the moment and forget that taxes/charges in Italy related to property can be exhorbitant.

That's intersting Modi. Here it is a fee per sqm. How on earth do they determine the cost of renovations? Does it include the plumber, electrician etc?

On a concessione edilizia its a percentage of the computometrico.   On a SCIA you pay a fee psm or a flat rate.

I think every area is different. The 'Rilascio di permesso di costruire' here is per sqm (just checked). So is change of use. I think I prefer per sqm to 1-3% of the computo metrico which is likely (in this area) to be much higher than the actual costs!

So if you get a concessione to do your roof of 200mq you'd pay 200x93 euros? yikes!

But it wouldn't be a permesso di costruire. It would be renovation (assuming the property arleady had a roof!) so half price.

You wouldn't pay for the roof as unless you were putting a roof on a ruined building (in which case you would be doing a full renovation/rebuild) it already exists and would just be some type of maintenance.

We have just had permission to extend by 14sqm so we have to pay €93 x 14 and then the existing property is 82sqm so €46.5 x 82 for the renovation.

Remember that building costs here are probably three times what you pay in Sicily so a percentage of the computo metrico (which is more again) would be an enormous fee to the Comune!

crikey Charlie !!

by far the biggest issues about this country are the ever changing rules, regulations, taxes and pretty much anything else you try to do.

It would be nice to have somewhere a single tick list to be aware of when undergoing these ventures, it is just not fair ! On top of all of the above, after you have finished the project and your hair has gone grey(!).... is there not then a need for a 'certificato di agibilità' ker-ching !!  grrr !

V

Gala Placidia wrote:Hi, payments to local authorities concerning renovations and extensions apply practically throughout the world. The moment a building permit is issued, a tax is due, even in the USA http://www.homeadvisor.com/cost/architects-and-engineers/get-a-building-permit/Costs may vary according to the region.Also, a new valuation will be made and the original "cadastale"  value at the Property Registry will be altered to reflect that. Obviously, you will have to pay more in property taxes according to the new valuation. Sorry, it is not nice news if you were not prepared....

I understand the concept of a building permit fee, I live in the US and have done many renovations. The fee to get a building permit is between 150 and 1000 USD and it is a generally a flat fee (depending on where you live) regardless whether I finish the basement for 50k or whether I build a deck for 5k.
For a new construction the fee can be a bit higher (maybe around 1000 USD) but we are not talking thousands of dollars like in the example calculations here on the board.

Then of course when you increase the value of your home, you will later pay more taxes (property taxes) which is fine.
I was just surprised to see that you even pay a tax for the construction process itself.
So they get you twice, first a tax for the construction cost and then a tax because you increase the value of your property .

Welcome to Italy! Did you know that each time we go to the gas station we pay Extra money per litre of gasoline because of a tax levied by Mussolini to finance the Libyan War? The war was over many years ago... But the tax remains.
Also, taxes on "prima casa" were abolished, only secondary or luxury residences pay, but most of this tax used to benefit the local councils. With the tax gone and less work permits issued because of the crisis, councils have to find a way to get money to keep on running. Flip's advice is perfectly correct.

Gala Placidia wrote:Welcome to Italy! Did you know that each time we go to the gas station we pay Extra money per litre of gasoline because of a tax levied by Mussolini to finance the Libyan War? The war was over many years ago... But the tax remains.Also, taxes on "prima casa" were abolished, only secondary or luxury residences pay, but most of this tax used to benefit the local councils. With the tax gone and less work permits issued because of the crisis, councils have to find a way to get money to keep on running. Flip's advice is perfectly correct.

Death and Taxes :-)

I am actually German and guess what, 20 years after the temporary "Reunification Tax" was introduced after the wall came down, the tax still exists and Germans are still paying for it. The official name was "Solidarity Fee" which West Germans had to pay to finance the reunification.
And they are still paying it in 2016 ...

Government officials do not know (or prefer to ignore) the meaning of words such as temporary or provisional... Particularly when these refer to taxes...

Income tax in the UK is still technically a temporary tax that has to be confirmed each year. It was originally introduced in the December Budget of 1798, abolished in 1802, reintroduced in 1803 and lasted until 1816. The tax was reintroduced by Sir Willam Peel in 1842 for 3 years with a possible extension of 2 years. There were proposals to abolish it in 1860 but that never happened and the rest, as they say, is history.