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Italian Property Taxes for Foreign Buyers | Complete 2025 Guide

Purchasing property in Italy is a dream for many foreign buyers, but understanding the local tax system is crucial to avoid unexpected costs. In this guide, we explain the main property taxes in Italy, how they apply to non-residents, and what to expect before and after purchasing a home.

1. Property Purchase Taxes When buying real estate in Italy, buyers must pay certain taxes depending on the type of property and whether they are purchasing from a private seller or a company.

  • Registration Tax (Imposta di Registro) – If purchasing from a private seller, the registration tax is 2% of the cadastral value for first-time buyers who intend to reside in the property, or 9% for second homes and investment properties.

  • VAT (IVA) – If buying from a company (such as a developer), VAT applies instead of the registration tax. The rate is 4% for primary residences, 10% for second homes, and 22% for luxury properties.

  • Cadastral and Mortgage Taxes – Fixed fees of €50 each when buying from a private seller, or €200 each if purchasing from a company.

2. Annual Property Taxes Owning a property in Italy comes with annual tax obligations:

  • IMU (Imposta Municipale Unica) – This municipal property tax applies to second homes and investment properties but not to primary residences (unless classified as luxury properties). The rate varies by municipality, generally between 0.4% and 1.06% of the cadastral value.

  • TARI (Waste Tax) – This tax covers waste collection services and is based on the size of the property and the number of occupants.

  • TASI (Abolished in 2020) – Previously a local tax on services, now incorporated into IMU.

3. Capital Gains Tax (Plusvalenza) If you sell your Italian property within five years of purchase, you may be subject to capital gains tax, calculated on the difference between the purchase price and the selling price. The tax rate is 26%, but exemptions apply if the property was your primary residence.

4. Rental Income Tax for Foreign Owners If you rent out your Italian property, rental income is taxable in Italy. Foreign owners can choose between:

  • Progressive Income Tax (IRPEF) – Ranging from 23% to 43% based on income brackets.

  • Flat Tax (Cedolare Secca) – A simplified system with a fixed rate of 21% for long-term rentals and 10% for certain contracts.

5. Inheritance and Gift Tax Foreigners inheriting property in Italy must pay inheritance tax, which varies based on the relationship between the deceased and the heir:

  • 4% for spouses and children (on amounts exceeding €1 million per heir).

  • 6% for siblings and relatives up to the fourth degree (on amounts exceeding €100,000).

  • 8% for all others, with no exemptions.

How Mangata Avvocati Can Help Understanding Italian property taxes is essential to making an informed investment. At Mangata Avvocati, we assist foreign buyers with legal and tax matters related to property purchases, sales, and inheritance in Italy.

For expert legal assistance, contact us at www.mangataavvocati.it.