What are the implications of selling a property for less than its cadastral value?
The cadastral value of real estate is determined by multiplying the income by 5 percent and a specific coefficient. This value forms the basis for taxes such as registration, mortgage, and cadastral taxes. There is no legal requirement to sell at or above a certain price, but selling below the cadastral value poses risks: potential tax audits and shared financial responsibility.
Since 2006, for individuals, the price-to-value system mandates that taxes are calculated based on the cadastral value, not the declared selling price. Therefore, the buyer doesn’t save on taxes and pays according to the cadastral amount. However, if the selling price is suspiciously low, such as below 70 percent of the OMI, tax authorities may suspect hidden payments and conduct an assessment based on OMI, mortgage, or valuation. This could lead to a recalculation of the seller’s capital gains and penalties ranging from 90 to 180 percent, plus interest.
For instance, in 2025, with an income of 800 euros, the cadastral value is calculated as 800 × 1.05 × 115.5 = 96,600 euros. If the declared price is 60,000 euros, the discrepancy of 36,600 euros could trigger a reassessment and a fine of up to 65,880 euros.
The buyer is equally liable and must pay extra taxes and fines, even if the purchase price was low, while the seller undergoes a reassessment of gains and personal income tax based on the actual amount received, plus penalties.
To avoid audits, it is advisable to set a price not lower than the cadastral value, use the "price-to-value" method automatically applied to individuals, get an appraisal if the low price is justifiable (e.g., due to dampness or nearby landfill), make transactions via bank transfer only, avoid cash payments, and if selling to relatives, declare a symbolic price with a well-justified deed, considering the risk of implied gifts.
Although there is no legal minimum price due to contractual freedom, the cadastral value acts as the lowest tax base. The 2025 coefficients are 110 for first homes and 120 for secondary properties and others.
In the event of an audit, joint liability means the tax authority can demand payment from either party, notifying, charging, and enforcing collections.
Ultimately, reducing the price by 10–20 percent usually poses minimal risk if justified; lowering it below 70 percent of the OMI is a significant risk and requires expert evaluation and an experienced notary, while selling to children carries moderate risk with a symbolic deed and inheritance advice. Useful resources include the Agenzia Entrate website for the price-to-value system and the OMI for 2025.
