When you buy a property, you are liable for tax in Italy. Below is an overview of the tax system for property in Italy.
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.
Whether or not you are resident in Italy, as a property owner you must still make a tax declaration. The Italian authorities are only interested in any income you may have accrued in the country, for example you may have money on deposit in a bank that is receiving interest. They have no interest in any holdings you may have outside of Italy.
If you rent out the property you must declare the income you receive. Against this you can deduct expenses you have had in maintaining the property. The tax is usually between 19% and 46%.
You will also be taxed on the rental value of your house, even if you don't rent it out. This tax is based on the rateable value of the property and is usually very small.
In some towns, an additional tax is raised to deal with services the town hall supplies. These could include rubbish collection, street and beach cleaning. In some municipalities you will be charged for use of a car in the area, but not in all. These taxes vary between €200 and €250 per year.
Please note that the CGT payable by individuals, not carrying out a business activity from the purchase and resale of real estate units is subject to Italian income tax, whether they are tax resident in Italy or abroad.
Therefore the profit will be considered as an annual income and will be taxed based on the following scale :
0 - 15.000 EUR
15.001 - 28.000 EUR
28.001 - 55.000 EUR
55.001 - 75.000 EUR
Above 75,000 EUR
Please note as well, that no CGT is due in Italy if the property is owned for more than 5 years, unless the Real Estate premises is land on which a unit was built. In this case the sale will be considered as commercial activity and will be subject to CGT even if the vendor is not a professional.
Once again the profit will be taxed as an annual benefit made by the company and will be subject to corporate tax. Therefore the profit made by an Italian company from the sale of a resale unit will be subject to a 27.5 % rate to which another 3.9 % will be added, corresponding to local corporate tax.
The tax rate applicable to the resale of any Real Estate unit owned by an overseas company is 33 % of the net profit. Once again if the property was purchased more than 5 years prior to the sale, no CGT is due.
While in many other European countries you may be liable for wealth tax, in Italy there is no such tax.
Even as a non-resident your estate will pay inheritance tax. The amount will vary according to closeness of the relationship of the heirs to the deceased. We advise you to seek professional information on how to best deal with this tax.
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.
Get the latest property and investment opportunities direct to your inbox for FREE (you can unsubscribe anytime)
Stability is returning to the Italian residential Real Estate Market
Italy's Property Market hotting up for 2017
Milan Emerges as Italy's Commercial Property Investment Hotspot
Michelangelo's Historic 16th-Century Villa in Italy for Sale at 7.5m EUR
Things you probably didn't know About Italy
Italy's Revival of Its 'Sleeping Beauties'
All property news from Italy
Subscribe to our RSS Feed
Fill out a requirements form and our experts will help you find a great selection of properties for sale in Italy.
Help me find property in Italy
Considering a property purchase in Italy or need to transfer currency to/from Italy?
Save Thousands in Currency Transfers
When considering a buying property in Italy, you are well advised to get expert mortgage advice from a mortgage broker.
Get a mortgage quote in Italy
Owners Direct is one of the UK's leading direct from owner rental websites and the first choice for holiday home owners who want a cost effective and easy way to fully book their properties.
Find out more
If you own or are about to purchase property in Italy, you get an insurance quote using our online insurance quote form.
Get Insurance in Italy
Do you have your British assets covered by a will?
Do you have your movable foreign assets covered by a will?
Have you made plans to protect your family in the event of your death?
Get more information on Wills
Everything you need to know about transferring your UK Pension is in our downloadable guide.
Get more information on Pensions
The Marches Property
Trentino-Alto Adige Property
Valle d'Aosta Property
Subscribe to our newsletter and keep up to date with the latest and best investment opportunities around the world!