Corporate Works

Lower property taxes likely to improve Italian real estate market

Milan - Piazza dei Mercanti

In 2016, the Italian government lowers property taxes in order to boost the real estate market

IMU (Imposta Municipale Propria) and TASI (Tassa sui Servizi Indivisibili) are abolished for principal residences

Practically, only residents in Italy will benefit from this abolition. Therefore, these two taxes will remain unchanged for secondary residences. For luxury houses and castles, IMU will get a reduction. Owners of those luxury properties will pay a flat rate of four per thousand and receive a standard deduction of €200. Since the four per thousand is calculated on the cadastral value of the property, which is always considerably lower than the actual value, oftentimes sometimes more than 60% lower.

There is also a 25% discount on IMU for the foreign residents who have rented their house in Italy, provided that the contract complies with the minimum and maximum rents set by local authorities.

Asfor the garbage fee, TARI, please reade below: “TARI: who should pay”.

Property purchase taxes are quite reasonable for principal residences

Purchase from private owner or from Non-VAT Registered   |   Purchase from VAT Registered
 

Principal Residence

 

Second Home

 

Principal Residence

 

Second Home

Stamp Duty 2% 9% €20 €200
Land Registry €50 €50 €200 €200
Cadastral €50 €50 €200 €200
VAT 4% 10%*

IMU, TASI, TARI: property taxes for Italians who reside abroad

Many Italians who own real estate in our country but are resident abroad and the rules for the application of the IMU, TASI and TARI abroad are different.
If, on the one hand are exempt from paying IMU from 1 January 2015, on the other they are still required to pay the tax on services and the indivisible municipal waste, albeit reduced to a third.

IMU for Italians living abroad: exemption

Many, in fact, are th Italians living permanently abroad who own a property in Italy.
As for the IMU it has been established, with effect from 1 January 2015, that is considered to be directly used as a main residence one housing unit owned through ownership or usufruct in Italy,by Italian citizens not resident in the State and members of the Italian residents to Anagrafe ‘abroad (AIRE), provided that is not leased or given on loan for use. (Decree Law no. 47 of 28 March 2014, converted into Law 23 May 2014 n. 80).
Essentially it means that Italian citizens living abroad and the owners of a property used as a principal residence do not pay the IMU. Always provided that the property is not luxury / fine (cadastral categories A1, A8 and A9), otherwise the IMU must be paid even if to a lesser extent, with the application of a rate of between 2 and 6 per thousand.
TASI: liable for payment
Matters are different when it relates to the TARI and TASI. Recall that this is the direct tax to finance the cost for indivisible services that offer the municipalities (public lighting, road safety, etc.) and is applied to all properties.
Taxable for TASI are the owners of the houses but also those who hold, in any capacity, the property, so even tenants in case of lease for residential purposes.
In particular, those who hold the property are required to pay a share of the TASI between 10% and 30% and the remaining burden on the owner.
To determine the minimum and maximum is the duty the Municipality.

TARI: who should pay

Introduced as the TASI by 1 January 2014, the TARI is the new garbage fee.
Taxable for TARI are all those in local and uncovered areas used in any capacity, located in the municipality.
Are exempt from the TARI all those areas that do not produce waste, a condition due to non-usability of the premises and areas (e.g. because the house does not have the minimum requirements of habitability, as they lack the electricity connections, Water and Sanitation).
Each municipality, in the Regulations of the garbage fee, may establish exemptions and reduction of TARI (e.g. failure to provide the service of waste management, service interruptions management and collection of waste that may cause damage to the community and to ‘environment, not continuous use of the property, property occupied by a single person).

TARI and for Italians TASI living abroad: payment reduction to 1/3
As for Italian citizens who live permanently abroad, even if already retired in the countries of residence, owners of a property in Italy, on the one hand they completely discount the IMU, on the other must pay both TASI that TARI.
However, they can still benefit from a tax reduction equal to 1/3.
So if the amount calculated under ordinary TASI, amounts to EUR 300, Italian citizens not residents will pay 100 Euros.
And if the property is luxurious or fine?
Given the silence of the provision, it follows that the reduction in one-third of TASI and TARI can apply even if the property treated as a principal residence of the non-resident, is classified in cadastral categories A1, A8 and A9.

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