On 16 December, owners of first luxury homes and second homes in Italy will be asked to pay the balance of the 2021 IMU tax. But let's see what the IMU is, when you pay it and how it is calculated.
What is the IMU?
Imu is an acronym for the single municipal tax or appropriate municipal tax. It is a property tax whose prerequisite is the possession or ownership of real estate. It is levied on residential property (other than a first house), commercial property, and land.
The IMU replaced the old ICI, Irpef, and the related regional and municipal surcharges. The main difference with the ICI is that the IMU is also paid on religious properties not used primarily for worship, and on properties owned by associations and non-profit organisations.
Who introduced IMU?
The IMU was introduced in March 2011 by the fourth Berlusconi government as part of the legislation implementing fiscal federalism. The date it was to come into effect on was set for 2014 for properties other than a main residence.
The Monti government's decree-law of 6 December 2011, known as the 'Manoeuvre to Save Italy', provisionally brought forward the date of its implementation to 2012 and then pushed it back to 2015. At the time of its entry into force, the IMU was also imposed on main residences.
Over the years, the IMU legislation has undergone numerous changes. In fact, the 2014 Budget Law abolished IMU on non-luxury first homes and established the IUC (Imposta Unica Comunale) consisting of TASI, TARI and IMU.
With the 2020 budget law, TASI was abolished and the new IMU or Super IMU was born, combining the old IMU and TASI with equal tax revenues.
Who pays the IMU?
Those who have to pay the IMU are:
- Owners of buildings, building areas, and land
- Holders of the right in rem of usufruct, use, dwelling, surface, and emphyteusis
- The spouse assigned the marital home following legal separation, annulment, dissolution, or termination of the civil effects of marriage (in the case of a luxury first home)
- A tenant in the case of leased property (even if under construction or in the course of construction)
- The concessionaire in the case of a concession of state-owned areas
Who does not pay the IMU
Over the years, the legislation on the IMU has undergone changes, introducing or removing exemptions to the payment of the tax previously provided for.
As of 2014, for example, the IMU is not due on so-called goods (i.e. buildings constructed and intended for sale by the company) and on rural buildings for pretextual use.
Since 2016, agricultural land located in the municipalities listed in Circular No. 9 of the Ministry of Finance of 14/06/1993 is also exempt from the IMU. In addition, agricultural land is exempt if it is:
- owned and managed by direct cultivators and by the professional farmers referred to in Article 1 of Legislative Decree No 99 of 2004, registered in the agricultural insurance scheme, regardless of their location
- located in the municipalities of the minor islands listed in Annex A to Law No 448 of 2001
- an unalterable agro-sylvo-pastoral destination, with indivisible and non-transferable collective property.
More recently, the 2020 Budget Law has provided for the exemption from the payment of the IMU, of the following categories of property, as they are assimilated to the principal dwelling category:
- family homes assigned to the custodial parent of children;
- buildings intended as social housing;
- real estate units of cooperatives with indivisible ownership used as the main home of the assignee members;
- a single non-rented property owned by members of the Armed Forces, the Police Force, Fire Brigade personnel and those with a prefectorial career;
- real estate units of cooperatives with indivisible ownership intended for university student assignees, even in the absence of registered residence.
When to pay the IMU
Imu is generally paid in two annual instalments. The deadline for the first instalment or deposit is 16th June, while the deadline for the second instalment or balance is 16th December.
The first instalment is paid on the basis of the rates and deductions of the previous year. The balance or second instalment, with any adjustment on the first instalment, must be paid on the basis of the rates decided by the relevant municipal resolutions published on the website Finanze.gov.it on 28 October. In the absence of an appropriate resolution, the rates of the previous year are applied.
How the IMU is calculated
To calculate the IMU, whether it is on a luxury first home or a second home, you have to start from the cadastral appraisal and follow these steps:
- revalue the annuity by 5%
- multiply the assessed appraisal by the coefficient of each property for which payments are made
- Multiply the result obtained by the rates set by each municipality.
For agricultural land, as well as for non-cultivated land, the taxable base is constituted by the dominant appraisal (as it appears in the land registry on 1 January of the year of taxation) revalued by 25% to which a coefficient of 135 is applied.
For building spaces, the taxable base is the market value on 1 January of the year of taxation, or as of the date of adoption of the urban planning deeds. To determine the market value, the following elements must be taken into account: the territorial area in which the area is located; the building index; the permitted use; the charges for any work necessary to adapt the land for construction; the average prices recorded on the market for the sale of spaces with similar characteristics. It is the municipalities that determine the common market values by means of specific regulations.
To calculate Imu, idealista/news has developed a useful calculator (note the page is only available in Italian).
What is the IMU declaration?
The IMU declaration is used to inform the Municipality where the property is located whether there have been any changes compared to the previous year. The changes may involve differences in the determination of the tax, in the exemptions, or in the rates to be applied.
In particular, the 2020 Budget Law established that 'taxpayers must submit the declaration or, alternatively, transmit it electronically' 'by 30 June of the year following the year in which possession of the property began or changes occurred that are relevant for the purposes of determining the tax'. If no changes occur, the declaration is also valid for the following years.