Property owner taxation as required by Italian fiscal law

What taxes do you have to pay in Italy? / Gtres
What taxes do you have to pay in Italy? / Gtres
24 October 2018, Magaraggia Law Firm

Overall, Italian law requires all homeowners to pay Government and Local Council taxes. In broad terms, the obligations with which any owner is required to comply are the following:

National level requirements

IRPEF TAX: Individual Income Tax – payable in 2 instalments (June & November)

  • This tax operates on different bands relating to your level of income.
  • First band: 0-15,000 euro – 23% on your Italian income (excluding any permissible allowances and relief). All house rental income will be taxed on this basis.
  • If there is no rental income on the property, tax could still be payable on the cadastral property value depending on your residency status and the number of cadastral units of the property.

TAX RETURN to be filed yearly (Modello Unico): annual deadline for submission – 30th September

  • Resident: Italian residents are obliged to declare all worldwide income. You will be required to submit your Italian tax returns including income from overseas, which needs to be declared in a specific section (the so-called RW section). Any Italian resident owning financial assets and/or properties overseas is required to fill in this specific form and pay a tax called IVIE (real estate tax) or IVAFE (financial assets tax).
  • Non-Resident: If you are not resident in Italy, you’re only obliged to declare rental income on Italian property or any other Italian income.

In terms of income tax and tax returns, double-taxation treaties between Italy and your home country can protect your income from being taxed twice. In the UK, you can claim back any tax you have overpaid or you may not be taxed at all, while US citizens can expect to be taxed on their all income anywhere in the world, but with certain tax deductions for living abroad.

Local Council requirements

IMU / TASI TAX: Local Property Tax – payable in 2 installments (June & December)

  • Local taxes are specifically related to the property value, forming a certain percentage of this depending on which region you are in.

TARI: Refuse Collection Tax – payable annually or via quarterly installments

  • The level of this tax relates to the size of the property. The Local Council will let you know each year how much tax is due and the payment methods available.
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