Question: This question is about income tax on an Italian property that I purchases. I am going to use my property personally, as a holiday home. Occasionally I might let friends and family use it for short terms. Will I need to pay income taxes on it?
Answer: If you own an Italian property that you do not rent out and you are not registered as a resident, such situation would not make your ownership per se subject to Italian income tax. In another scenario, where your property is comprised of two units on paper, and you are registered as a resident at one of them, you might be expected to report a minimum default income and pay income taxes on the the other one no matter if you rent it out or not. The tax that would be would be the Italian personal Income tax, known as IRPEF, “Imposta sui Redditi delle Persone Fisiche“. It is a national tax due annually, paid twice per year to the Italian State. When you are an Italian resident IRPEF is also is paid on several kinds of income, e.g., employment and pension income, unless exceptions apply.
In order to comply with Italian tax reporting obligations you must use a specific tax form, which can be downloaded online from the Italian Tax Office website.
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Related information
- Italian Property Owner’s Guide To Italian Income Tax
- Purchasing: Do I need an Italian Bank account?
- Financing a property
- Joint or individual purchase: tax implications
- Purchasing jointly with my spouse or separately?
- Purchasing in a condominio building
- Property taxes
- Double taxation
- ICI – Municipal Tax
- VAT on Italian property purchase
- Italian property purchase taxes
- Inheriting seller’s debt
- Vendor’s solvency affecting the buyer
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