The subject would require a long explanation, especially if we were to consider all individual cases even in the context t. ex. with tax deductions, additional income generated in Italy (due to renting their home in Italy or commercial activities), residing in a property other than the one owned. We therefore try to simplify the answer by providing general information.

In this case, we are also considering only private properties, not rented and not those considered as luxury homes.

It should also be noted that:

• houses abroad (in our case…in Italy) can be subject to property tax also in the owner’s country of residence
• every Italian real estate (house or land) has a specific value according to the land register, it is called in Italian “rendita catastale“. The value can be found in the land title (visura catastale) or in the purchase contract. This value is used to calculate all taxes on real estate;
• in Italy, the municipal property tax (IMU) generally replaces the income tax for natural persons (IRPEF) related to real estate not rented. This means that when you pay municipal property tax (IMU) you do not have to pay income tax (IRPEF) on the value of the property and consequently, if you have no other income apart from the property, you do not have to submit an income declaration to the Italian tax agency “Agenzia delle Entrate”.

As indicated in the question, it is necessary to distinguish cases where the owner is resident in Italy from those where he is not.

RESIDENCE ABROAD (i.e. not tax redicence in Italy) + income declaration abroad

If you own one or more properties in Italy, the owner (or the usufructuary) must pay every year the municipal property tax (IMU) to the Italian tax agency “Agenzia delle Entrate”. This means that no income tax return has to be submitted in Italy.

Don’t forget that in addition to the property tax (IMU), there are also another municipal tax (TARI) that the owner must pay. More details on the annual property taxes can be found on this article >>>

RESIDENCE IN ITALY + income declaration in Italy

1) A property owned

If you own a property in Italy and you are registered there (i.e. tax redicence in Italy), you do not have to pay the property tax IMU. You also do not have to pay the personal income tax (IRPEF) on the value of the property.

In practice, the value according to the land registry (rendita catastale) must be declared in the Italian income tax return, but since the law in this case allows to deduct the entire value from the total taxable value, it means that no income tax is paid on the property.

2) Two or more properties located in different Italian municipalities

For example, if you own two properties located in two different Italian municipalities and you are registered in one of the two properties, then the situation is as follows:

• property 1 in municipality A where you are registered => see point 1);
• property 2 (not rented) in municipality B => you only pay the municipal property tax (IMU).  Consequently, no income tax (IRPEF) is payable on the value of the property.

3) Two or more properties located in the same municipality

For example, if you own two properties located in the same municipality and you are registered in one of the two properties, then the situation is as follows:

• property 1 in municipality A where you are registered => see point 1);
• property 2 (not rented) in municipality A => in this particular case the general rule does not apply. This means that you have to pay both the municipal property tax (IMU) plus a reduced income tax (IRPEF) on the assessed value (income tax is only paid on the 50% of the assessed value). For more details on the calculation of the tax, we recommend contacting us directly or getting in touch with a trusted Italian accountant.

NOTE: The reduced assessed value must be added to other income. Depending on the level of all income, different tax rates are paid (23%, 25%, 35% and 43%).

NOTE: If the property is rented out, different rules apply and, in addition, an income tax return must be filed in Italy even if the owner is resident abroad.

The post Own one or more houses in Italy. When an income tax return is required? appeared first on S&P Law Firm in Italy.

1. municipal property tax, called IMU;
2. waste tax on property, called, TARI;

A third tax called TASI was in effect until 31 December 2019. It was a municipal service charge on property. (NOTE! This tax was abolished in 2020).

On the municipal property tax IMU:
the new owner is not obliged to send any “paper” to the municipality.
Tax is paid twice a year, partly in June (advance payment) and partly in December (the balance).

NOTE: The owner does not receive any bills.

Each year, the owner must calculate the amount to be paid on his own. You can pay the tax at the bank using the “modello F24” form or at the post office using a “bollettino postale”. The template must be filled in with your details.
We recommend contacting an accountant or a “CAF”. CAF is an association that offers services such as calculating property taxes, etc.

Regarding the TARI waste tax:
the municipality should count the amount. The owner receives the bill by post.
The owner can choose to pay the fee in different parts of the year. The payment date varies between municipalities. It is also possible to pay the tax in full at once by 16 June.

Regarding the TASI municipal service charge (abolished):
it is easier because the municipality calculates the amount. The fee is invoiced twice a year, a part in June and the rest in December.
NOTE: This tax was abolished in 2020.

The post Annual property taxes in Italy. We have not received any bills appeared first on S&P Law Firm in Italy.