Sale agreement and the property deed: what happens if the final price of the property is lower?

The selling of a property for less than the deed states may be considered fraud, unless proved otherwise

9 April 2018, 12:16

What happens if the sale price of a house as indicated in the deed is lower than the agreed price? Can the Agenzia delle Entrate (the Italian equivalent to the British HMRC) initiate an evaluation procedure, considering that it may be a manoeuvre to pay a part of the money under the table, thus saving on taxes? Let's see what a judgment of the Lazio Regional Tax Commission has to say.

If it suspects that there has been fraud, the Tax Office may request an upward adjustment of the taxes due on the sale. However, the taxpayer can always prove that it is not a misrepresentation, but that the seller gave him a real discount at the time of writing the deed.

To prove this, documents will have to be presented to support these statements. Based on these documents, the Tax Commission, the body to be contacted in the event of a tax assessment, will determine whether the discount was real or fictitious.

What kind of proof is needed?

First of all, it must be said that only documentary evidence is admitted and not witnesses. Therefore, the seller's declaration giving his word on the discount is not valid on its own. It is even useless to present a private agreement recognising the discount if it does not have a specific date. The date, to be considered true, must include the registration or authentic signature of a notary or other public official.

An alternative type of proof which could also be accepted is a warning (by registered post) sent by the buyer to the seller after the signing of the preliminary contract in which the latter is informed of, for example, a defect in the property, on the basis of which a discount in the final price is requested.

From the original Italian article: Casa: se il prezzo sul rogito è più basso del compromesso che rischio?