The Italian tax regime applicable to residential real estate can seem confusing. Real estate has always been an attractive source of income for governments around Europe, and Italy is no exception. As real estate is difficult to move about, it presents an easy target for the Exchequer. The current Italian tax regime seeks to differentiate between the of real estate which is used as a principal dwelling house – the main residence – which has a favorable tax regime compared to second homes.
This guide briefly sets out the main Italian tax issues arising to the purchase, use and sale of real estate in Italy. It applies to individuals buying residential property for their own use and where the property will not be used in the course of any business activity (apart possibly from a private letting business). Tax on real estate is a complicated and intricate topic and you would be wise to seek professional advice in advance of any transaction. We can help with all legal and tax aspects of any transaction.