A second home in Italy
If you have bought a house in Italy, but do not intend to live in it as your habitual abode and register as resident with the Anagrafe (register of resident population maintained by the relevant local authority or “comune”), it will be considered a second home and not an “abitazione principale” or “prima casa” (main home).
Under Italian law, taxes on second homes are higher than on first or main homes – or rather a main home qualifies from a series of tax reliefs not available on a second one. This is due to the higher degree of public interest in a principal residence reflecting constitutional rights to a home.
Taxes are higher from the moment of purchase, as you will not be able to take advantage of the “agevolazioni prima casa” (first home benefits) and the various purchase taxes will have to be paid in full (see this post).
Expenses for utilities (energy, water etc) may also be higher for a second home as result of reduced tariffs for the first home.
Taxes on the second home
The taxes, related to real estate property, that you have to face are:
- IRPEF “Imposta sul Reddito delle Persone Fisiche” (Personal Income Tax) on the deemed catastral (land registry income), on rents received.
- IRPEF or substitute tax on any capital gain on a disposal of residential property within 5 years of purchase. The exemption from tax for post five years sales may not apply to sales of property which derive from the acquisition of land for development;
- IMU “Imposta Municipale Unica” (Unified Municipal Tax);
- TARI “Tassa sui Rifiuti” (Waste Tax).
Previously there was also the TASI “Tributo sui servizi indivisibili” – local services tax, which has been abolished with effect from 1 January 2020.
IRPEF and IMU taxes are calculated on the cadastral income of the property, revalued according to a series of coefficients. The cadastral rent can be obtained from the visura catastale.
IRPEF
As far as IRPEF is concerned, the second home is subject to income tax at the ordinary scale rates.
The property income must be indicated in the RA/RB sections of the Italian income tax return. From a tax point of view, income from property that is subject to IMU is generally not liable IRPEF.
There is an IMU-IRPEF substitution effect, which operates for non-rented property, such that income tax is due on the cadastral income for periods in which the property is not rented.
In the event that the property is rented out, IRPEF is due on the rental income received in the tax year, but in this case it is paid on the actual income for the period in which the property is rented and on the revalued cadastral income for the period or periods within the tax year in which the property is not rented. See this post for more information of the tax treatment of rental property.
IMU
IMU is Italy’s municipal property tax on real estate, introduced in 2012 to replace the previous ICI tax. It applies to owners (or holders of registrable legal rights like usufruct or a right of habitation) of buildings, buildable land, and agricultural land. The tax funds local services.
Primary residences are generally exempt unless classified as luxury properties (cadastral categories A/1, A/8, or A/9).
Other exemptions or reductions may apply for historical buildings (50% reduction), agricultural land owned by professional farmers. Non-residents (e.g., foreigners owning Italian property) must pay.
How IMU Is Calculated
The calculation starts with property’s cadastral income (rendita catastale), a government-assigned value based on size, location, and type. The rendita castale is then revalued by a standard coefficient and multiplied by a category-specific coefficient.
The municipal tax rate (aliquota), is expressed in amounts per thousands to the resulting taxable base.
For a second residential home with €500 of cadastral income at a 10.6‰ (1.06%) rate, by way of example:
- Revalue cadastral income: €500 × 1.05 = €525
- Calculate taxable base: €525 × 160 = €84,000
- Apply the 10.6‰ rate: €84,000 × 0.0106 = €890.40 annually
So, the IMU tax would be €890.40 per year.
The tax is prorated by ownership months and percentage ownership (e.g., 50% for co-owners). Joint owners each need to pay their share of the IMU separately. For months of purchase or sale IMU is due for the whole month where you have owned the property for the greater part of the month.
Payments are due in two installments: an advance by June 16 (based on prior-year rates) and balance by December 16 (adjusted for current rates). Late payments incur penalties, but voluntary corrections (ravvedimento operoso) reduce them. Pay via F24 form, PagoPA, postal bulletin, or direct debit to your personal Italian bank account.
An IMU return must be filed but, in general only where there has been a change to the property itself (not simply a change of ownership) requiring land registry details to be updated.
Rates are set by municipalities within national limits, leading to local variations. Professional advice is recommended to effect the calculation.
Overview of Rates from 2019 Onwards
IMU rates have been relatively stable but saw a key change in 2020 when the TASI (services tax) was merged into IMU via the 2020 Budget Law (Law 160/2019). This increased the national basic rate for most properties. Municipalities can adjust within caps, but since 2020, they cannot go below the basic rate. In 2023, the Budget Law updated publication rules (rates no longer tacitly renewed; must be explicitly set or default to basic). In 2025, a “new simplified rate system” was introduced, maintaining the basic rate but streamlining application for consistency.
Below is a table summarizing the national basic rates and municipal ranges for second homes (the most common taxable category; primary residential property (and one appurtenance) may be exempt. Rates for other properties (e.g., commercial, land) may differ slightly. Actual rates may vary by location—e.g., higher in major cities like Rome or Milan.
For precise calculations or your specific property, consult a local tax advisor or your Comune.
| Year | National Basic Rate (per mille) | Municipal Range (per mille) | Key Changes/Notes |
|---|---|---|---|
| 2019 | 7.6‰ (0.76%) | 4.6‰ to 10.6‰ | Pre-merger with TASI; municipalities had more flexibility to lower rates. IMU and TASI were separate taxes. |
| 2020 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | TASI merged into IMU, raising basic rate (0.76% IMU + 0.1% TASI). No reductions below basic allowed. |
| 2021 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | No major national changes; rates extended from 2020. |
| 2022 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | Stable; some municipalities adjusted locally due to post-COVID recovery. |
| 2023 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | Budget Law changed rate publication—must be explicit or default to prior year (or basic if none). |
| 2024 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | Continued from prior years; focus on enforcement for non-residents. |
| 2025 | 8.6‰ (0.86%) | 8.6‰ to 10.6‰ | New simplified system fixes basic at 8.6‰ for uniformity; no rate increases beyond cap. |
IMU Exemptions and Reductions
The Imposta Municipale Unica (IMU), Italy’s municipal property tax, offers exemptions or reductions in specific cases. Below is a summary of common scenarios where exemptions or reductions may apply, based on Italian tax regulations:
Primary Residence (Prima Casa):
Exemption: IMU is generally not due on a property used as the owner’s main residence, defined as where you are registered with the municipality (residenza anagrafica) and habitually live.
Exception: Luxury or high-value properties (cadastral categories A/1: stately homes, A/8: villas, A/9: castles or palaces of historical/artistic value) are not exempt and are subject to IMU even if used as a primary residence. The rate for these is typically the municipal rate (8.6‰ to 10.6‰ as of 2025).
Agricultural Land:
Exemption: Agricultural land in hilly or mountainous areas, as defined by ISTAT (Italian National Institute of Statistics) Circular No. 9/1993, is exempt.
Partial Exemption/Reduction: Land owned and managed by professional farmers (coltivatori diretti or imprenditori agricoli professionali) registered with social security (INPS) may be exempt or subject to a reduced rate (often 7.6‰ instead of 8.6‰), depending on municipal rules and whether the land is actively cultivated.
Historical or Artistic Properties:
Reduction: Properties declared of historical or artistic interest under Legislative Decree 42/2004 receive a 50% reduction in the taxable base. If the property is unusable or uninhabitable, it may be fully exempt, but this requires municipal verification.
Unusable or Uninhabitable Properties:
Exemption: Properties that are dilapidated, abandoned, or otherwise uninhabitable (e.g., lacking utilities) may be exempt. This requires a formal declaration and inspection by the municipality to confirm the condition.
Rented Properties with Fair-Rent Contracts:
Reduction: Properties let under “agreed rent” contracts (contratti a canone concordato), where rent is capped per local agreements, may qualify for a 25% IMU reduction in some municipalities. This encourages affordable housing but depends on local regulations.
Exemption for Social Housing: Properties used for public or social housing (edilizia residenziale pubblica) may be exempt, as per municipal discretion.
Properties Used for Specific Purposes:
Exemption: Properties owned by non-profit organizations, used exclusively for cultural, religious, or charitable activities (e.g., churches, museums), may be exempt, provided they meet strict criteria under Italian tax law.
Exemption for Public Entities: Properties owned by the state, regions, or municipalities used for institutional purposes (e.g., schools, hospitals) are typically exempt.
Municipal-Level Reductions:
Some municipalities offer local reductions or exemptions for residents with low incomes or specific conditions (e.g., pensioners those with disability or facing economic hardship). These are not standardized and vary by Comune.
Check by contacting your local Comune or check the Comune’s website for delibere (resolutions) on IMU rates and exemptions.
Temporary Exemptions (COVID-19 Related):
In 2020–2022, temporary exemptions were introduced for properties in the tourism sector (e.g., hotels, B&Bs) due to COVID-19 economic impacts. These were not extended to 2023–2025, but municipalities may offer similar relief in specific cases (e.g., economic hardship), subject to local approval.
Non-Residents with Specific Conditions:
Exemption (Limited): Since 2021, a 50% reduction applies to properties owned by Italian citizens in receipt of a qualifying pension income residing outside Italy (registered with AIRE) provided the property is not rented and does not qualify as a second home. This applies only to one property per owner. Regulations on this have been subject to significant change over recent years, so the current position, and approach of the Comune, needs to be checked.
All these exemptions and reductions depend heavily on local regulations. Always check with the specific municipality (comune) for eligibility and application processes.
Most exemptions require formal declarations (e.g., Dichiarazione IMU) by June 30 of the following tax year, along with supporting documents (e.g., proof of residency, lease agreements, or property condition reports).
Municipalities may audit claims, and false declarations can lead to steep penalties.
TARI
TARI (Tassa sui Rifiuti) is Italy’s municipal waste tax, designed to cover costs of waste collection, disposal, and street cleaning. Introduced in 2014 under Law 147/2013, it replaced earlier waste taxes like TARSU and TIA. TARI is managed by municipalities and applies to anyone occupying or owning properties (residential or non-residential) that generate urban waste, including homes, businesses, and offices. There is no “prima casa” exemption.
Who Pays: Property occupants (tenants or owners,) resident or not, are liable. For vacant properties, the owner pays if waste services are active.
TARI is calculated according to
Fixed Component: Tied to property size (square meters) and covers general service costs.
Variable Component: Based on household size (number of occupants) or, for businesses, type/quantity of waste produced.
Municipalities set rates annually within national guidelines, varying widely by location.
Exemptions/Reductions:
Exemptions: Vacant properties with disconnected utilities (no water, electricity, or gas) or properties used less than 6 months/year (e.g., second homes) may be exempt, subject to municipal rules and reporting.
Reductions are available for single occupants, composting households, or properties far from waste collection points. Some municipalities offer discounts for recycling or low waste production.
Payment is due in 1–4 installments (deadlines set by municipalities, often June and December). Paid via F24 form, PagoPA, or postal bulletin. Some Comune offer a web portal for TARI management and payment, sometimes after outsourcing of administrative management of the tax. Late payments incur penalties, reducible via voluntary correction (ravvedimento operoso).
Rates are set locally, and vary widely (e.g., €1–€5 per m² for households). Check with your Comune or its websites for exact tariffs.
Tari Report
Declaration: New occupants or owners must file a TARI declaration within 60–90 days (varies by municipality) to register or update details.
After the initial reporting TARI is generally payable on receipt of a demand for payment issued by the Comune.
OUR SERVICES
For those who do not reside in Italy, dealing with all the necessary formalities can be difficult.
Therefore, we have developed a Tax Management Service for Homes in Italy, including:
- Obtaining a copy of the updated visura catastale;
- IMU: confirmation of whether or not a return is due. Calculation of amounts due and assistance with payment of the two annual instalments;
- Assistance with TARI return and payments;
- IRPEF: submission of the Italian tax return for Section RB and support with payment of income tax.
The package may vary according to specific circumstances.
The service is also available for those who reside in the property or for the “abitazione principale”
Please contact us here if you would like more details.