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Italy: real estate taxes
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Owners of holiday homes in Italy need to be aware of the taxation implications of their investment. You will need to pay certain taxes regardless of whether you rent your property out or where your permanent country of residence is.
We have provided an overview of the taxes involved in the ownership of Italian property below. However, if in any doubt as to your fiscal obligations we recommend that you consult a professional who is proficient in both the Italian and British taxation systems. Unlike in the UK, the Italian tax year runs alongside the calendar year.
Source: www.properties-in-europe.com/info_italy_tax.
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Municipal Tax
This is called Imposta Comunale sugli Immobili (ICI) in Italian. The exact amount of tax depends upon the cadastral value- rendita catastale- of your property; the official value as determined by the municipality. The cadastral value depends upon the size, location and type of property. ICI is paid twice yearly, in June and December.
Communal Taxes
Known as Tasse Comunali in Italian. Some Italian municipalities also impose a charge for services supplied to residents in an area. These include refuse collection and beach/street cleaning, for example. This fee will vary depending upon the municipality, but is usually about €200-€250 per year.
Income Tax
This is called Imposta sul Reddito delle Persone Fisiche (IRPEF) You need to declare an annual income for tax purposes even if you are not resident in Italy. The Italian tax authorities are only concerned with income generated in Italy, not your global income. This will include any income you derive from letting out your Italian holiday home. Certain expenses may be deducted when declaring your rental income. These include repairs, management costs and local taxes. The resultant net income is taxed at a variable rate between 19 per cent and 46 per cent, depending upon the amount. You will also need to declare this income in your home country. Double taxation agreements are in place between Italy and many countries, including the UK, to avoid paying tax twice.
Notional Income Tax
If you are a non-resident and own a holiday home in Italy, you need to pay a tax based on the notional rental value it, even if you do not let it out.
This tax is based on the rendita catastale, official rateable value, of your property and is usually minimal.
Capital Gains Tax
In Italian this is called Imposta sostitutiva sulle plusvalenze. This was abolished in 1994 and has been replaced with the ICI, as above.
Wealth Tax
Inheritance Tax
Both residents and non-residents of Italy are subject to Italian inheritance tax laws. The amount of tax paid depends upon the precise relationship between the deceased and those inheriting the property. | | |
