​​Property Transaction Tax​

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In Italy, transaction and holding taxes on real estate are determined by the property's Cadastral Value. This official government assessment reflects the property's inherent worth, independent of recent market prices, and serves as the basis for various property taxes.

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The tax rate on real estate's cadastral value varies based on the ownership structure used for acquisition. 

Residents face the lowest rate at 2.00%, while non-residents (9.00%) and entities such as trusts, SPVs, or companies are subject to significantly higher rates (10.00%).

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Capital Gains Tax: Tax on profits from the sale of real estate.

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When selling a property, a capital gains tax applies. The rate is 22% for individuals and 27.5% for companies. Exemptions may exist for primary residences and properties held for specific periods.

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Corporate Taxation and Capital Gains Tax

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Income and capital gains earned by companies are taxed at a flat rate of 24%. Income-generating expenses are deductible when calculating taxable income. Rental income received by corporations is considered business income and is subject to the corporate tax rate of 25%.

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Property Holding Tax​​

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IMU (Imposte Municipale Unica): A municipal tax on real estate property ownership.

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The annual property tax paid to the municipality in Italy is known as IMU. The IMU rate varies significantly depending on the specific municipality, the region in which it is located, and the "status" of the property

(e.g., whether it is considered a luxury property or not). 

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The tax is calculated based on an assessment value that is determined by both the Cadastral Value of the property and the municipal tax rate set in each individual case. While the primary focus of IMU calculation lies in the building's cadastral value, land ownership is also subject to IMU, albeit at a generally lower rate.

 

The standard statutory rate for buildings other than the primary residence is 0.76% and can be increased or decreased by municipalities by up to 0.3 percentage points; therefore, the rate can range from a minimum of 0.46% to a maximum of 1.06%. For non-exempt primary residences (cadastral categories A/1, A/8, and A/9), on the other hand, the standard statutory rate is 0.4% and municipalities can increase or decrease it by up to 0.2 percentage points; therefore, the rate can vary from a minimum of 0.2% to a maximum of 0.6%.

 

As a foreign buyer without residency, you are liable for IMU.

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To determine the exact IMU rate applicable to your property, it is recommended to consult the official website of the relevant municipality. These websites typically provide an overview of the IMU rates charged to their residents.

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The IMU is paid in two installments: an advance payment due by June 16th and a final payment due by December 16th. Tax notices for the IMU are not sent in Italy. The tax return must be self-assessed by the taxpayer (so-called "autoliquidazione").​

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TASI (Tributo per i Servizi ai Comuni) & TARI (Tassa sui Rifiuti)

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​TASI is charged for public services offered by the municipality, such as street lighting and road maintenance.

It is calculated similarly to IMU and offers the same exemption for primary residences.

If the property is rented out (longterm), the tenant is liable for 30% of the fee. The estimated annual orientation f is approximately €70 - €100.

 

​TARI is a waste collection tax paid by the occupier of the property. It can be charged at a fixed rate based on the property size and number of occupants, or a variable rate set by the comune to cover waste collection, transport, and disposal. The estimated annual orientation fee for a detached house with land, accommodating two people, is approximately €200.

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Rental Income Tax​​​​​

 

​​​Rental income is charged at a flat rate of 21%, replacing income tax, registration tax, and others if certain conditions are met. However, for additional properties rented out for short durations, the rate rises to 26%.

Nonresidents can deduct expenses related to generating rental income.

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Important Note

 

This is a simplified explanation and may not cover all situations. Tax laws are intricate and frequently updated. Consulting with a qualified tax expert is highly recommended for accurate and tailored advice.