In recent years many foreign individuals are increasingly buying second houses, often prestigious ones, in Italy. The foreign citizen who buys a house in Italy has to deal with the complex Italian administrative and fiscal formalities in addition to having to take care, based on the principle of taxation on a worldwide basis, any further tax and declarative obligations in their own Country of residence.

Basically for non-residents (foreign or Italian citizen who moved abroad) who owns properties in Italy the same legislation as for residents applies. A first distinction must be made between owners who retain possession of the property, for example as a secondary residence, and owners who rent it instead, earning an income. 1. In the first case, no income is taxable in Italy, as the Property Tax (Imu) replaces the personal income tax (Article 8, paragraph 1, Legislative Decree 23/2011) 2. When the non-resident rents the property he own, he produce an income subject to ordinary taxation or the optional flat rate tax regime. Here a particularity of the Italian tax system emerge: the minimal reduction in lump-sum expenses, while abroad the possibility of analytically deducting the costs incurred or significant flat-rate abatements (i.e. for example 50% in France for those who rent furnished apartments). In order to pay taxes with the F24 form a “non-resident” bank account in Italy is needed; alternatively it’s possible to operate bank transfers to specific bank current accounts.

The non-resident also benefits from the non-taxability of the capital gain, if realized later five years from the purchase of the property (Article 67 of the Tuir). If the transfer occurs within five years, it will be possible to exercise the option for the flat tax currently at 26%. This indication is limited to the Italian side: the non-resident must in fact check – in application of the worldwide principle taxation – any further taxation in it’s own Country even if bound by a Convention signed with Italy.