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Taxing me if owning property

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Isleham1
  9/14/2020 04:21 EST

Ciao ExPats,

My wife and I (US natives) are exploring buying an apartment in Italy, but have heard about the taxation issues.

Do we have to worry about the taxes if it is a second home or vacation home? If we visit it less then 3 months twice a year, do we even get taxed by Italy?

Gracie,
Joe

codybrandy
  9/14/2020 07:21 EST

Permanent residents do not get taxed on property they own. We bought our Italian home 5 years before retiring and moving to Italy permanently. We were taxed for those years until we established residency...which means you have to live in Italy permanently as a first home.
On the other hand the property tax for those years was quite low compared to US property tax (i.e. Boston)...for a 2bd apt in a rural community we paid c. 600E per year.
If you do not plan on moving here permanently I would strongly urge you to rent instead. Properties move very very slowly and you may buy something and then want to sell which could take 5++ years. Good luck.

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guestuser
  9/14/2020 08:13 EST

Here's a pretty good rundown of taxes and fees for buying and maintaining a home in Italy. If you are not a resident of Italy, your home can not be classified as "prima casa."

https://transferwise.com/gb/blog/property-tax-in-italy

The following link also discusses costs associated with buying a property in Italy.

http://www.liguriaguide.com/guide-to-buying-italian-property.html#

Good luck!

glorirz
  9/14/2020 12:05 EST

We bought an apartment just last year. I’d be happy to private message about fees. We are also US citizens. We felt that the cost of renting another apartment for 3-6 months a year was as or more expensive than owning. We don’t intend to rent our apartment out to the public, but we hope to offer it to friends for a nominal fee. Depending upon where you live in the US, you might find the Italian costs very nominal as we did.

Swordfish45
  9/14/2020 21:03 EST

Joe,
as already explained, unless you establish a permanent residency at that apartmtn, you will be taxed as second home. The actual amount depends on each town/village/municipal circumscription and the type of apartment. In general it is calculated by multiplying the value of its "rendita catastale" x specific values.
In general, the amount you will pay is not very high as compared to similar real estate taxes in the USA. Keep in mild that contrary to the USA, the owner is supposed to calculate the actual tax due, with the help of an accountant if needed, otherwise the municipality will give you that info.
As property owner, your next tax is the trash collection fee (TARI), which you will pay regardless of how many days you do reside there. You will receive a bulletin from the municipality with the amount to pay.
My suggestion is that if you will buy a place in a small town, make a trip to the Municipio and ask about all taxes due and when they are due and how you can pay them.
At purchase, if you do not intend ot canno establish a primary residence, the Notaio will charge you (to pay to the Government) 10% IVA tax on the value of the apartment, plus additional registration taxes. If a primary residence, IVA tax is 4%.

I have purchased and sold multiple properties and being native I am very familiar with all aspects of real estate there.

I would also suggest you buy instead of renting. There is no MLS, properties are listed by each individual agency/agent. It does pay to have a reputable agent represent you, their 2.5% commission is well worth the aggravation.

Where are you looking to buy?
Good luck,

Swordfish

italianlaw
  9/16/2020 11:17 EST

Property issues applying to Italian citizens living in Italy or residing outside of Italy:

Reduction on costs on the transfer of title when purchasing.

Reduction on recurring property taxes called IMU

Property taxes (IMU) are paid irrespective of the time you spend in the house in Italy.

Advice: always obtain a title report on the target property as the very first step. One day delivery

Anthony Alioto
www.italianlaw.net
San Francisco office

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