New registration tax for pre-contracts from 2025 - VON POLL REAL ESTATE

From January 1, 2025, the registration tax on pre-contracts and down payments not subject to VAT will be reduced from 3% to 0.5%. This important change, introduced by Legislative Decree no. 139/2024, provides significant tax relief for property buyers and reduces the immediate tax burden when purchasing real estate.

What is the registration tax and why is it important?

Registration tax is a levy that is incurred on the registration of contracts, including the preliminary contract for the purchase of real estate. This preliminary contract is an agreement between the buyer and seller that prepares the final purchase contract. Until December 31, 2024, the tax was a fixed fee of €200 and a percentage of 3% on the down payment made and the same percentage on the security payment (deposit). With the 2025 reform, the tax on down payments will be reduced from 3% to 0.5%, resulting in significant savings for buyers. This change will be particularly noticeable for large down payments, as the tax burden will be significantly reduced.

The effects of the new regulation: a concrete savings potential

To illustrate the impact of the change, it is helpful to give a practical example. Suppose a buyer pays a deposit of €50,000 for a property. By the end of 2024, the registration tax would be €1,500 (3% of €50,000). With the new tax of 0.5%, the tax burden drops to just €250 - a direct benefit to the buyer of €1,250. The deposit, which is usually paid when the preliminary contract is signed, also benefits from this tax relief. For a deposit of €10,000, the tax would fall from €300 (3% of €10,000) to just €50 (0.5% of €10,000), which represents a significant saving.

Long-term effects of the reform

This measure is part of a wider tax reform aimed at boosting the real estate market and making property purchases more affordable for buyers. The immediate tax savings will help to make the business more attractive and could increase the number of property purchases, which would have a positive impact on the economy. In addition, the reform could also promote transparency and simplification of the property purchase process. The lower tax on pre-contracts could encourage buyers to pay a larger portion of the purchase price upfront, strengthening their negotiating position and simplifying the entire purchase process.

Conclusion

The reduction in registration tax on down payments and deposits is a significant relief for property buyers as the tax burden is significantly reduced. From 2025, the reduced tax of 0.5% will help to make the real estate market more accessible and attractive. This tax relief not only has a fiscal impact, but also practical benefits for buyers and could boost the real estate market in the long term.