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Property ownership

The costs of owning a property in Italy differ depending on the type and size of the property, the location and other individual circumstances. However, as a general guide owners should bear in mind the following:

• Income tax – payable on rental income earned by non-resident owners of Italian property; the rate is between 23 – 45% depending on the income. There is also a 4% solidarity charge on any income over €100,000. Non-residents are eligible for a 15% deduction for property maintenance expenses. Deductible expenses include medical or surgical costs, gifts to charities, and mortgage interest payments. Net income must amount to 85% of more of the gross total.
• Local community tax – must be paid by any owner of Italian property. The amount is calculated according to the property value as determined by the local authorities. The rate can vary from 4 – 7%, depending on the property’s size, location, class and category. Local community tax will usually be paid in two instalments, one in June and one in December.
• Contract registration – Rental contracts in Italy must be registered annually, at a cost of 2% of the annual rent, according to the contract. The fee is usually split, with the tenant and landlord paying 1% each. The landlord may be eligible for tax relief if the contract is compliant with the standards of the local landlords and tenants association, in which case just 70% of the annual rent is taxable.
• Capital gains tax – normal income tax rates apply to profits made by the sale of a property in Italy by non-residents if they have owned the property for less than five years. The taxable profit is the difference between the original price of purchase together with expenses, and the selling price. It is taxed as miscellaneous income. If the property has been owned for more than five years, the profit is exempt from capital gains tax.

Related items

Documents and Reports

	Italy property investment report (399Kb)
Documents and Reports

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