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UPDATE: How British second home owners can spend more than 90 days in Italy after Brexit

While Brexit is throwing up many complications for British people who live full-time in Italy (or plan to), there is another group who will be impacted by the changes in 2021 - second home owners.

UPDATE: How British second home owners can spend more than 90 days in Italy after Brexit
Photo: AFP

Italy’s food, weather, and attractive house prices help make it the dream holiday home location for many Brits.

Some intend that eventually their second home will become their main residence – often by retiring to Italy – while others just enjoy spending prolonged periods of time in their second home, but want to keep their main home in the UK.

For those people it’s important to note that the 90-day rule will kick in once the Brexit transition period ends on December 31st 2020.

The rule – the same one which has always been in place for all non-EU citizens wanting to spend time in EU countries – states that you can spend 90 out of every 180 days in the EU without needing to get visas or residency.

OPINION: Yes, second-home owners should be furious about the post-Brexit 90-day rule

So people who currently like to spend long, relaxed summers in Italy, or come here to avoid colder winters in the UK, will find that their plans are curtailed by Brexit.

This site has a fuller explanation of how the 90-day rule works, as well as a calculator to allow you to work out your visits.

A few things to note are;

  • The rule allows for 90 days in every 180, so in total in the course of a year you can spend 180 days in Italy, just not all in one go
  • The rule applies to the whole of the EU, so if you spend a whole three months in Italy you can’t then go for a week in Paris within the same 180 day period
  • The clock only stops once you leave the EU and head to a non-EU country (which the UK will be from December 31st 2020).

But are there ways round this to allow for longer trips?

Will you need a visa?

With the 90-day rule in place, the way for non-residents to spend more time in Italy will now be to get a long-stay visa 

After the end of the Brexit transition period, British citizens will require a long-stay visa, Italian authorities have confirmed.
 
“Starting from January 1st 2021, British citizens planning to stay in Italy for more than 90 days (‘long stay’) within 180 days, will be subject to national visa requirements, according to the Italian immigration rules applied to third country nationals,” stated the Italian consulate in London on December 17th.
 
 
The consulate advises visiting the Interior Ministry’s website for more details about the process of applying for a long-stay visa.
 
You can also find out more about the process of obtaining a visa on the EU immigration portal.
 
British citizens coming to Italy for a short stay of less than 90 days (in a 180-day period) will not require a visa, the Italian consulate confirmed.
 
This means that British citizens will therefore not need a Schengen short-stay visa to spend up to 90 days in Italy within a period of 180 days.

Should you get Italian residency?

If you really want to spend long periods in Italy you may be looking at taking up Italian residency.

This is more than simply declaring that you live in Italy. To become resident you will need to apply for a residency permit or permesso di soggiorno – which comes with its own conditions, see more on those here.

However you will also need to become a tax resident in Italy, which means filing annual tax returns with Italian authorities, even if all you income comes from the UK or elsewhere, and registering with the Italian healthcare system (which may not be free.)

These are some of the most commonly-cited reasons for people choosing not to take up Italian residency.

READ ALSO: 

You cannot be a permanent resident of two countries at once, so if you become an Italian resident you have to give up your British residency which has an impact on things like tax and access to the NHS.

Is it possible to slip under the radar?

Many British people have got used to coming and going with minimal paperwork or checks, and without having to keep track of how many days were spent where.

But passport checks are expected to become stricter from the end of this year, not least because British nationals will no longer be able tp use the EU/EEA/CH passport queue.

If you are caught over-staying your allocated 90 days you can end up with an ‘over-stay’ flag on your passport which can make it difficult to enter any other country, not just Italy, and is likely to make any future attempts at getting visas or residency a lot more difficult.

See The Local’s Brexit section for more details and updates.

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READER QUESTIONS

Reader question: Do you need to cancel your residency when leaving Italy?

How do you cancel your residency permit when leaving Italy - and do you even need to do so at all? The Local looks into the rules.

Reader question: Do you need to cancel your residency when leaving Italy?

Question: My partner and I are leaving Italy after several years of living here. Do we need to cancel our residency? If so, can you advise us on how to go about doing this?

Most people know that you need to register as a resident in Italy if spending more then 90 days in the country. But what should you do if you decide to leave?

Do foreign nationals need to deregister as a resident, and under which circumstances? And how do you go about doing cancelling your residency?

We asked the experts to talk us through when you should deregister as an Italian resident and the the steps involved in cancelling your Italian residency.

Should you bother cancelling your residency?

As is so often the case when it comes to complex bureaucratic questions, the answer is: it depends. Both on your personal circumstances and on the type of residency permit you hold.

If you’re relocating away from Italy permanently then deregistering as a resident and informing the authorities of your new address is a legal requirement – and you’d want to do so anyway, says Nicolò Bolla of the tax consultancy firm Accounting Bolla.

READ ALSO: What’s the difference between Italian residency and citizenship?

On the other hand, if you’re moving away on a temporary basis, you’re not required to cancel your Italian residency.

“If, for instance, you undertake a two-year assignment somewhere, you can still remain a resident and benefit from all the coverage a resident has, such as healthcare,” Bolla explains.

You might want to hold on to your Italian residency in the short term if you're not sure whether the move will be permanent.
You might want to hold on to your Italian residency in the short term if you’re not sure whether the move will be permanent. Photo by MIGUEL MEDINA / AFP.

There’s no official time limit for this – you could leave Italy for a number of years while maintaining your residency and then return to live in the country as if there had been no break.

That means that if you’re leaving Italy and aren’t sure whether you want to return, you might want to keep your residency status, at least in the short term (it’s possible to be legally resident in both Italy and another country).

Financial planning and property consultant Daniel Shillito warns: “you want to be sure if you’re leaving the country that it was a permanent decision, and that you weren’t aiming to come back to live – because if you do want to, it could be tricky and quite administrative.”

For British citizens in particular, he points out, “having an Italian residency these days is a valuable thing, it’s not easy to get again.”

This all applies to those with permanent or long-term residency.

If you have a temporary residence permit, you will no longer be considered resident in Italy as soon as it expires – so you may decide it’s not worth bothering to cancel your residency if it’s due to expire anyway shortly after you leave.

Why does it matter?

There are multiple factors to consider here, the biggest of which is taxes.

If you’re resident in Italy, you’re expected to pay taxes here. However, if you’re moving to a country with which Italy has a double taxation agreement or dual tax treaty, you’re protected from being taxed twice on the same income. Many states, including the UK, America, Australia and Canada, have dual taxation treaties with Italy. 

READ ALSO: Can second-home owners get an Italian residence permit?

If you’re moving to a country which doesn’t have a double tax agreement with Italy, on the other hand, you’ll be legally required pay the full amount of Italian tax on your income even if you spend very little time in Italy, so will almost certainly want to cancel your residency.

Even if you’re moving to a country that does have a dual tax treaty with Italy, you may still want to deregister as an Italian resident in order to avoid having to deal with the paperwork involved in proving you’re a dual resident whose tax obligations are limited.

There’s also a third category of emigrant: for those moving to a country on the EU’s tax haven blacklist, such as Panama, simply deregistering as an Italian resident won’t keep the tax authorities at bay. The burden of proof is on the individual to demonstrate they actually reside in the blacklist country and aren’t just trying to evade Italian taxes.

In these situations, Bolla advises clients to register as resident in an intermediate third country after leaving Italy and before moving to the blacklisted country in order to avoid the extra bureaucracy.

READ ALSO: What taxes do you need to pay if you own a second home in Italy?

Do you need to cancel your residency when leaving Italy?

There are multiple factors to consider when deciding whether to cancel your Italian residency. Photo by FABIO MUZZI / AFP.

Other considerations

Besides where you pay your income tax, you’ll want to consider other factors such as official correspondence, tax breaks, and timeframes for residency-based citizenship applications, Bolla says.

If you maintain Italian residency, the authorities will expect to be able to reach you at your registered address, including for things like traffic fines or notifications of tax audits. If you no longer have any link to that address and no one to forward your correspondence on to you, you could end up in a sticky legal situation.

It’s also worth taking into account the fact that new Italian residents can access certain tax breaks that aren’t available to people who’ve lived here for a while. If you cancel your residency and then return to Italy at a later date, you’ll be eligible for those incentives in a way that you wouldn’t be if you’d kept your residency.

On the other hand, Bolla notes, maintaining Italian residency could work in favour of those interested in pursuing citizenship through residency.

An individual must be continuously resident in Italy for 10 years before they can apply for Italian citizenship based on their long-term residence status.

In theory, maintaining your Italian residency while you’re temporarily abroad could mean that period still counts towards towards those ten years and you won’t have to restart the clock on your return – though it’s important to consult a professional if you’re considering this option.

How can you go about cancelling your residency?

There’s no standardised national protocol for cancelling your residency. Instead, you’ll need to contact the comune, or town hall, you’re registered with to inform them of the change and ask them what you need to do.

The process could be as simple as sending a few emails, without even having to set foot in the building. There may also be a form to fill out. Because things vary from one municipality to another, you’ll need to contact your local comune to find out exactly what’s required.

Generally the process can only be completed after, not before, leaving the country, because you’ll need to provide your new address and possibly supporting documentation proving that you’re now resident elsewhere.

“You say me and my family – and then you list all the members – are no longer residing in your town, please deregister us, and our new address is (e.g.) 123, Fifth Avenue, New York,” says Bolla.

If you have a Spid (Sistema Pubblico di Identità Digitale or ‘Public Digital Identity System’) electronic ID, Bolla notes, in many towns and cities (such as Milan), the process can be completed online through the comune‘s website.

You should expect to receive confirmation that you and your dependents have been deregistered as Italian residents, so it’s worth following up until you receive this.

READ ALSO: How to use your Italian ID card to access official services online

Shillito advises using a PEC (Posta Elettronica Certificata, or Electronic Certified Mail) email account if you have one when communicating with your comune about deregistering. 

Messages sent between PEC accounts are certified with a date and time stamp to show when you sent them and when they were received, with a record of receipt automatically emailed to you as an attachment. Within in Italy they have the same legal value as a physical lettera raccomandata (registered letter).

“That secure email communication is official, you’ve got a receipt showing it’s been received,” says Shillito.

“That way you’ve got evidence and a record that you’ve communicated it to them, in case anything went wrong in the future and the Italian government decided to claim you were still living in Italy.”

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