Buying from a developer: off-plan, VAT, statutory guarantees

It looks like a detail, and it decides everything else. A new building can be sold by the company that builds it, or by a private owner of the land who entrusts the works to a company. From the outside the building site is identical; for the buyer it is not.

Before talking about price, then, it is worth asking who the selling party in the deed will be, and getting it in writing.

A sale by the company that built the property, or renovated it, is subject to VAT if it takes place within five years of completion; after that, only if the company so chooses.¹

The base is the price: the price-value mechanism, which on resales has registration tax paid on the cadastral value, does not apply here. At the same price, a new build therefore costs the buyer of a second home more tax than a resale. Instalments are invoiced with VAT; the confirmatory deposit is not. Deeds subject to VAT also carry stamp duty and mortgage fees, which are not exempt here: a few hundred euros.¹

The law on property to be built protects those who pay money for a home that does not yet exist. It applies when the seller is a builder acting as a business, the buyer is an individual and the property is “to be built”: the permit has already been applied for and the building is not yet fit for occupation.²³

Two warnings. If the project has not yet been submitted to the municipality, the rules do not apply: anyone paying a sum “to reserve” an apartment at that stage does not have these guarantees. And the notary cannot execute the deed until the developer's mortgage has been split or cancelled on your unit.²

The specification is the list of what you are buying: structure, insulation, windows, systems, finishes. It must be attached to the preliminary contract. Anything you were told verbally that is not in the specification is not there.

The energy class. For energy purposes a building that is demolished and rebuilt is treated as a new construction, and a new construction must be a “nearly zero-energy building”. That is not, however, a synonym for a particular class: listings of new builds show the design class, and the real one is certified by the certificate at completion. In a valley in climate zone F it is the number that decides the cost of every winter.⁵

Timing. In listings of new builds, in Sappada as elsewhere, the delivery date is a statement, and for the same development it can change from one channel to another. What holds is what is written in the contract: the deadline, what happens if it slips, when each instalment is paid.

There are income tax deductions for those who buy, from a company, a unit in a building entirely demolished and rebuilt in a seismic zone, a property in a wholly renovated building, or a newly built garage. Sappada is in seismic zone 2.⁴⁶

The conditions are strict: a company must sell, within a time limit from completion; the first requires the sworn certifications filed with the application; for second homes the rate is the lower one; the three measures are alternatives; above an income threshold there is an overall cap. And they are recovered over ten years, only by those who pay income tax in Italy.

They should not be counted on until a notary and an accountant have seen the papers for that particular development.

In Sappada more is recovered than built. In the historic hamlets new buildings are, as a rule, prohibited; elsewhere the maximum heights are between 6.5 m and 7.5 m depending on the zone, and nothing is built above 1,350 m of altitude. The whole municipality is under landscape protection.⁷

The result is small developments of a few homes, often born from the rebuilding of a barn or an existing structure. Between 2019 and 2023 the dwellings in the municipality grew by 43 in all.

In listings, new builds ask noticeably more than the municipal average, which is €3,577/m²: that average includes resales. Anyone comparing a new apartment with the official values should know that these describe homes in “normal” condition, not new builds.

For the developments we handle we prepare a project page with the units and their status, redrawn floor plans and images declared for what they are: a rendering is not a photograph, and we say so. We publish prices when they are confirmed in writing. We are not the developer and we do not answer for its timing: we tell you which papers to ask for, and from whom.