This page gives you important information about taxes, both for buying a property and afterwards.
Taxes when Buying
The taxation system in Italy is complicated. However this is important information so please bear with us. We will try to keep it as simple as possible.
The tax on your first property purchase in Italy is 3% (4% if buying the property from a company). However you must obtain residenza (residency) within 18 months of purchase otherwise you will have to pay an additional 7% plus interest and a fine. You should then spend 183 days of each year in Italy although with the relaxation of border control in Europe now it is difficult for anyone to check, although the police may visit the house to check that you live there. If you are buying the property as a company you will pay 10% tax. If you are buying agricultural land then you pay 18%.
Property values are registered with the Comune (local council) on a Catasto (land registry). The registered value of a property is normally quite low and it is only on the registered value that you need to pay tax. Bizarre! Officially the registered value and the selling price should be the same. We have one case where the seller insisted on this and one case where the buyer insisted on it. Check this out at the beginning of negotiations.
On your second house the tax rises to 10%. The way round this though is to buy the first property in your name and the second in the name of your spouse thereby qualifying for 3% in both cases!
To purchase land in addition to that for sale with a house you will pay 18% (of the registered value) although there are sometimes ways round this. If the land is agricultural you will probably have to pay 18% anyway.
IVA (VAT) in Italy is currently 20%. However you pay only 10% for materials to restore your house here. This is due to be reviewed.
You can also claim 36% of your restoration costs back from your income tax over 10 years. Provided, that the work is completed by September 2003.
Taxes after Buying
Owners of a home in Umbria can expect the following taxes:
WASTE TAX (Tassa per lo Smaltimento dei Rifiuti Solidi Urbani)
This tax is calculated by the Municipality on the basis of the surface area of your house. You have to register at the Municipalità and they will send you the form to enable you to pay. You can pay once a year (before the end of April) or spread over four payments (see the deadlines, “scadenze” on each payslip. This tax cannot be paid directly by your bank. You have to pay it in cash at the post office or in a special tax office of your city. You can also ask our accountant to do it for you (see below).
ICI - Imposta Comunale sugli Immobili (Council Tax on Property).
If you're a resident and owner of a "prima casa " you don't pay ICI. Owners of a second home have to fill in a form called "Dichiarazione ICI per l'anno ...." at their local Tax Office before the 31st of July of the year after they bought their house in Italy. If you cannot go and get the form yourself you can also send it by registered mail, but not by email, or ask your accountant (see below). You will not receive it automatically. The rate differs according to the Municipality, from 5, to 7,5 thousandth of the catastal value (valore catastale) of your house.
Non-residents pay once a year, before 20 December
You can pay by bank (also from abroad) or by international postcheque to the "Consorzio Nazionale Obbligatorio tra i Concessionari del Servizio di Riscossione" in Rome
To those who bought a house last year: Check if you have already declared your house for ICI for last year and this year. If you haven’t we advise you to contact a local commercialista (accountant, see addresses below) as soon as possible to pay before the 31st of October at the latest. Ninety days after the last deadline the fines go up.
IRPEF (Income Taxes)
If you own a house and/or land in Italy you have to declare its value to the Italian fiscal authorities. The value is mentioned in your deeds and in the visura catastale: Reddito catastale is for the house, Reddito Dominicale and Reddito Agrario is for the land. You have to fill in these values in your tax declaration form (modello unico). You need to do this also if you don’t have your fiscal domicile in Italy and if you’re not a resident here. Usually the values are so low that you don’t have to pay any taxes, but you stiil have to declare it though.
If you rent out your house in Italy you also have to declare the income in the modello unico.
At the tax offices in Perugia, Terni, Orvieto or Foligno you can ask for free help (in Italian) with filling in your tax forms, or at a so-called C.a.f. (a tax administrator of trade union like the CGIL, ACLI, etc. which do this for a small fee), or with an accountant (commercialista, see addresses below).
Deadline for tax declaration: before the 31st of July of the following year if you fill in the paper form, before the 31st of October of the following year if you send in your declaration on-line.
Deadlines to pay your taxes: down payments for the current year: June 20 and November 20. the remainder for the preceding year: June 20.
The tax forms can be purchased as of the end of May in office supplies shops like Buffetti, or can be found (if available!) at the local town hall or tax office. YOU WILL NOT RECEIVE YOUR TAX FORMS AT HOME, YOU HAVE TO PROCURE THEM YOURSELF!
You can also declare and pay income taxes online: www.agenziaentrate.it