Guide to Real Estate Taxes in Italy

Nonresidents are taxed only on their income from Italian sources. Married couples may be taxed separately depending on the conditions in the marriage contract. Nonresidents can avail of some deductions and credits available to residents.

Income Tax (Imposta sul Reddito delle Persone Fisiche [IRPEF])

Taxable income is generally an aggregate of all forms of income, less expenses related to acquiring and maintaining income and allowed deductions.

Income Tax Rates

Taxable Income, € Tax Rate
Up to €28,000 23%
€28,001 - €50,000 35% on band over €28,000
Over €50,000 43% on band over €55,000
Source: Global Property Guide, PWC

A regional surtax is also imposed on income, with a minimum rate of 1.23% and a maximum rate of up to 3.33%. A municipal surtax and a provincial surtax may also be imposed on income, with an aggregate up to 0.80%. The municipal surtax is determined by each municipality and the provincial surtax by each province.

Nonresidents may avail of deductions for medical and surgical expenses, mortgage interest payments, and gifts to charitable institutions up to 19% of the taxable income.

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.

Corporate Taxation and Capital Gains Tax

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%.

Capital Gains Tax (Individual)

Capital gains are taxed at a flat rate of 26%. The seller is exempt from paying capital gains tax if they have owned the property for more than five years or if the property served as their main residence.

Property Buying Costs and Taxes in Italy

Transaction Costs

Description Cost Range Who Pays
Property Transfer Tax 2.00% - 9.00% Buyer
Agent Fee Buyer 3.00% Buyer
Agent Fee Seller 3.00% Seller
Legal Fees 1.00% Buyer
Notary Fees 1.00% - 2.00% Buyer
Roundtrip Cost 10.00% - 18.00%  
Property Tax (Owning) 0.40% - 1.06%  
Corporate Tax 24%  
Rental Income Tax 21%  
Source: Global Property Guide, PWC

Property Holding Tax

Real Estate Tax (Imposta Municipale Unica, IMU)

IMU is a property tax paid by the owner on second homes and luxury estates. The tax is based on the cadastral income of the property, increased by 5% and multiplied by the local rate of the comune, typically 0.4% - 1.06%. Primary residents are exempt from paying IMU. Buildings of historical or artistic interest may be eligible for a 50% reduction.

TASI (Tributo per i Servizi Indivisibili)

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, the tenant is liable for 30% of the fee.

TARI (Tassa sui Rifiuti)

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.

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