How much does it cost to sell a house: taxes, notary fees, estate agent’s fees and capital gains

"If I sell it for 400,000 euros, how much will I have left?"

This question almost always comes up after discussing the price. Perhaps you’ve already looked at another house, pictured yourself moving in and done some rough calculations about your next purchase. Then you pick up a pen and start subtracting.

The estate agent’s fee. The paperwork. Any mortgage to be settled. And those taxes someone’s mentioned, without properly explaining when they’re due.

The sale price is the starting point. To make plans, you need to know the actual amount you’ll have left over.

The estate agent: a percentage you need to read right through

There’s an offer of 400,000 euros on the table. Let’s assume that the commission agreed with the estate agent is 3 per cent plus 22 per cent VAT: the fee is 12,000 euros, plus 2,640 euros in VAT. The total comes to €14,640.

This is an example of a calculation, not a mandatory rate: the commission is freely agreed upon. Before signing the mandate, the amount, the services included, any additional expenses and the point at which the fee is due must be clarified. It is not necessarily the case that this coincides with the signing of the deed of sale: the right to the commission may arise as soon as a legally binding agreement is formed, taking into account any conditions precedent.

Even choosing based solely on the percentage can be too simplistic. It is important to understand who will carry out the checks, how offers will be handled and what work will be done to support the asking price during negotiations.

Does the seller really pay the notary’s fee?

The day of the signing arrives. In the notary’s office, the seller, the buyer and a question that has often remained unanswered are present: ‘But do I have to pay the notary’s fee as well?’.

As a general rule, the costs of the sale contract and any associated expenses are borne by the buyer, unless otherwise agreed. The full cost of the deed of sale should therefore not automatically be included among the seller’s outgoings.

However, there may be specific obligations relating to the seller’s circumstances: for example, an inheritance matter to be finalised or a formality to be sorted out. These items must be identified and budgeted for separately.

Taxes: selling does not always mean paying tax on the proceeds

One of the most common fears is that the tax authorities will deduct a percentage from the full price of the house.

For a private individual selling outside the scope of a business, the situation is different: it is necessary to check whether there is a taxable capital gain, i.e. a gain that is relevant for tax purposes.

The standard rule applies to properties purchased or built no more than five years ago. There are exemptions, including properties acquired through inheritance and homes used as the main residence by the seller or their family members for the majority of the period between purchase and sale.

This is why two owners selling at the same price may find themselves in completely different tax situations.

Capital gains, explained in figures

You bought a house for €250,000 and are selling it for €300,000. The initial difference is €50,000.

However, the tax calculation may also take into account recognised and documented related costs. Let’s suppose, just to illustrate the mechanism, that the tax-recognised cost amounts to €270,000: the capital gain would be €30,000.

If the capital gain is taxable and you opt, where permitted, for the 26 per cent substitute tax – to be requested from the notary at the time of the deed of sale – the tax in this example would be 7,800 euro. The alternative is ordinary IRPEF taxation, which should be assessed on the basis of your personal circumstances.

That 26 per cent applies to the taxable capital gain, not the entire sale price.

‘I’ve owned it for over five years, so am I in the clear?’

Before answering, there is another question to ask today: has any work been carried out under the Superbonus scheme?

For properties subject to such works, there are specific rules that may render the capital gain taxable if the sale takes place within ten years of the completion of the works, even if the purchase occurred some time ago. Exemptions still apply, including those for inherited properties and for the main residence under the conditions laid down by law.

This is something you should check before accepting an offer: it could affect the amount you’re counting on for your next purchase.

The documents and minor expenses that affect the final cost

Then there are the less obvious items: the Energy Performance Certificate (APE) to be prepared or verified, technical assistance, documents to be obtained, and any discrepancies that need to be addressed.

There is no single cost that applies to all properties. An flat with complete documentation requires different work to a property that has been altered over the years without first clarifying its building and land registry status.

The tax status of the original purchase also warrants attention: selling a property purchased under ‘first-time buyer’ tax relief within five years may result in the loss of that relief, unless the conditions for avoiding this are met, such as repurchasing a property within a year to serve as your main residence. This is a separate issue from capital gains.

How much is left, in the end?

Let’s go back to the initial €400,000.

Subtracting just the estate agent’s fee from the example, amounting to €14,640 including VAT, leaves €385,360. From this amount, other actual expenses, any tax liabilities and the outstanding mortgage balance to be repaid must be taken into account.

The latter is neither a tax nor a commission, but it does reduce the available cash.

At this point, you can put your pen down. You finally have a figure to work with, rather than a price and the hope that enough will be left over.

Are you thinking of selling? Before deciding how much to ask for, let’s work through the costs, checks and expected net proceeds, with the support of the solicitor and tax advisor for the aspects falling within their remit. The next project starts with a properly done calculation.