Italy - Tax Planning

Italy’s tax system can be complicated and it is important to consult an expert tax advisor when considering your Italian property investment. Here you can obtain a brief guideline to Italy’s property tax system.

The basic property tax in Italy is known as “IMU” (Imposta Municipale Unica). Everyone who owns a land or a property in Italy, whether they are resident or non-resident, must pay this tax which is usually between 0,2% and 0.76% on the total declared value of the property. The amount depends on the local authority and the size, location and category of property you purchase. If the property is passed as uninhabitable or being restored, the tax is reduced by 50%.

The IMU is paid in two instalments - 90% by the 30th of June each year and 10% between the 1st and 20th December. If the tax is not paid on time, a surcharge of up to 200% can be levied.

Tax on Rental Income

Tax is charged on income received from your property rentals in Italy and you can deduct from this any of your expenses for property maintenance. The rate can be anything from 19% to 46% depending on the property and rental conditions.

Capital Gains Tax

Italy has not charged capital gains tax since 1993 and instead it is incorporated into the IMU.

Inheritance/Wealth Tax

Unlike many other countries, Italy does not charge a wealth tax.

Stamp Duty

If the property is purchased from an individual, the rate is 11% of the government valuation. The value of the property is not the purchase price itself, but the figure assessed by the local tax office and it is calculated from official tables.

UK-Italy Tax Treaty

There is a double tax treaty between Italy and the UK and this protects the investor from paying tax on his Italian assets in both countries.

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