Do you have a house in Italy? Don’t forget to pay the annual tax on real estate (IMU)
You bought a house in Italy because you would like to move to Italy in the future, or as an investment, or just to feel at home when you come to Italy to enjoy the wonders of the Italian peninsula, such as art, history, nature, or food and wine. However, no one, including the real estate agent or the notary you went to, told you that if you buy a house in Italy while living abroad, you will have to pay a property tax.
Yes, that is right. In Italy, there is a property tax that real estate owners have to pay every year, which is called IMU (imposta municipale unica).
WHAT IS THE IMU (IMPOSTA MUNICIPALE UNICA O IMPOSTA MUNICIPALE PROPRIA) TAX
The IMU tax was originally established by Legislative Decree no. 23/2011, as subsequently reviewed and amended (Decree-Law 201/2011, converted into law no. 214/2011, law no. 44/2012, etc.).
In general, the IMU tax applies to the possession of houses (technically fabbricati) – with the exception of the primary residence (abitazione princiale o prima casa) included in specific cadastral categories (see below) – of building areas, and agricultural land. The tax is due by the owner, or by the holder of other rights (usufruct, use, etc.), by the concessionaire in case of the concession of state property areas, and by the lessee in the event of leasing.
WHEN IS THE IMU DUE AND CASES OF EXEMPTION
The condition for the payment of the tax is the possession of real estate. In fact, the IMU tax is due for the mere fact of owning property in Italy.
However, there are some cases of exemption from the payment of the IMU tax, among which are the following:
- law no. 147/2013 has established that, starting from 2014, the primary residence (abitazione principale o prima casa) classified in the cadastral categories A /2, A /3, A /4, A /5, A /6, or A /7 is exempt from the payment of the IMU. This means that if you reside in a house classified in one of the above cadastral categories, you will not have to pay the IMU tax. (N.B.: this exemption does not apply to primary residence homes classified in the cadastral categories A /1 (noble type house), A /8 (villa) and A /9 (castles, palaces of eminent artistic or historical value) and their appurtenances, which are considered “luxury estates, for which a reduced rate and a € 200 deduction apply).
The “primary residence” is considered to be the real estate unit in which the “taxable person” (e.g. the owner) and his family formally reside and usually live.
The IMU, therefore, regularly applies to “second homes”.
- Another exemption concerns the case of a single real estate unit owned as property or usufruct, by Italian citizens not residing in the territory of the State and registered with AIRE (Register of Italians residing abroad), already retired in their country of residence, provided that the real estate is not rented or loaned for use.
In light of the above, if you bought a house in Italy but are residing abroad, or if you are not formally residing in your Italian house, or if you reside in your Italian house that is classified in the (“luxury”) cadastral categories A /1, A /8, and A /9, you will have to pay the IMU tax.
To simplify, we can say that to calculate the IMU tax you will need to know what your tax base (base imponibile) is, and the aliquota rate set for your particular case.
In order to determine your base imponibile, you will need to know the cadastral income of your property, that can be found in your deed (the act of purchase of your real estate).
HOW AND WHEN DO YOU PAY THE IMU TAX
The payment of the tax must be made through your Italian bank by filling in the Modello F24. The IMU is paid in two installments. The first must be paid by June 16 of each year, while the second must be paid by December 16th. However, it is possible to make one single payment by June 16.
Interests and sanctions will be added to the due amount in case of late payments.
N.B. In order to calculate the exact amount that you will have to pay, among other elements, you will need your Italian tax code, that you should have already requested in order to purchase the property. If, for any reason, you do not have an Italian tax code, or if someone else you know needs an Italian tax code, please send an email to email@example.com