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TAX

Tax deadline nears for second-home owners in Italy

Tax season begins in Italy in mid-June, with the first deadline coming up this week for those who own a second home in the country.

Tax deadline nears for second-home owners in Italy
Italy is one of the few countries where property prices have decreased compared to 2010. (Photo by Nils Schirmer on Unsplash)

The basic rate of tax based on property value, known as ‘Imposta Municipale Unica’ or IMU (Unified Municipal Tax), must be paid to the Italian state by June 16th this year.

IMU is owed by all owners of second homes and the June deadline marks the first instalment with the other payment due on December 16th, 2022.

READ ALSO: The rules and deadlines for filing Italian taxes in 2022

You don’t pay this if your main residence is in Italy and you live in the country more than six months a year, thanks to a change introduced in 2016.

Otherwise, if it’s your second home, you must pay this tax.

Taxes on second homes are inherently higher than primary residences – or at least, a main home qualifies for certain tax reliefs that second homes can’t benefit from.

For non-EU nationals without residency in Italy, including Americans and now Brits, they are allowed to spend 90 days out of every 180 in the EU.

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

This group of people with a second home in Italy would need to pay IMU.

You’ll also need to pay IMU if you own a home in Italy classed as luxury property, even if it is your main residence. Italian luxury property in the Italian tax system is defined by its residential category.

In this case, the cadastral categories A1, A8 or A9, for tax purposes are all luxury dwellings (stately homes, villas and castles).

IMU is also due on farming or agricultural land.

How much you pay depends on your property and the area you live in – payments are based on a percentage of the property value, collected by the municipality where your home is located, with part of the tax also going to the national government.

As a rough guide, you’ll need to take 5 percent of the property value and then multiply that number by a coefficient – a figure that changes according to property type.

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

This will give you a taxable base and from there, you’ll be charged anything from 0.4 to 1.06 percent of that figure, depending on the municipality where your second home is located.

You can pay this via a form called F24 through the bank or Post Office – be aware you won’t receive a bill and will need to initiate the payment yourself.

You’ll only receive what coefficient your type of property is to be able to do the sums, which an accountant can help with and arrange the transaction too.

Aside from a non-luxury main residence, there are other exemptions to paying IMU.

Under the Support Decree (decreto sostegni ter), for 2022, properties affected by the major earthquakes of May 2012 that remain uninhabitable, located in the municipalities of Emilia Romagna, Lombardy and Veneto, remain exempt from IMU until December 31st, 2022.

You can find a list of further taxes owed on second homes in our guide here. Please note The Local cannot advise on specific cases.

For more information on property in Italy, check The Local’s property section here.

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MONEY

EXPLAINED: What is Italy doing to cut the rising cost of living?

Amid soaring inflation and price rises, the Italian government has announced new measures to help families and businesses keep costs down. Here's what you need to know.

EXPLAINED: What is Italy doing to cut the rising cost of living?

Italy approved a much-anticipated aid decree on Thursday, August 4th, bringing a new round of state funding intended to tackle the country’s most critical issues: from the rising cost of living and sky-high inflation to the energy and supply crisis. 

READ ALSO: Fuel tax cut and help with energy bills: Italy approves inflation aid package

The ‘aiuti bis’ aid package, worth around 17 billion euros ($17.4 billion), likely marks the last major act by outgoing prime minister Mario Draghi before an early general election next month.

The funding is seen as badly needed after inflation hit 8 percent in Italy in June – the most severe spike the country has experienced since 1976.

After weeks of speculation about exactly which measures may or may not be included in the decree, we now know it contains everything from an extension to the fuel duty cut to more help with energy bills for those on lower incomes.

Here’s what you need to know about the latest measures intended to keep the cost of living under control.

Extension to fuel duty cut 

The current discount on fuel duties is to be extended again to September 20th, though the value of the discount will drop from 30 to 25 cents. 

The discount was recently extended to August 21st but the government decided to further prolong the incentive in a bid to ease the blow that record fuel prices have dealt to consumers and businesses.

The cut was initially introduced as far back as March when the average prices at the pump for petrol and diesel both exceeded the two-euro mark.

Help with energy bills

Measures introduced in the first half of the year to help lower-income households and vulnerable people pay rising energy bills will be extended under the new decree.

It extends an existing government discount on gas and electricity bills for a further three months, until the end of 2022, as well as reducing system charges.

READ ALSO:

Italy’s tax on the ‘excess profits’ of energy companies has meanwhile been extended to June 2023 after the government reportedly received fewer payments than expected.

Tax cut for employees

Workers earning a gross income of under €35,000 are eligible for a two percent tax saving, amounting to a small monthly ‘pay rise’ until the end of this year.

“Already in the budget law we reduced social contributions by 0.8 percent; for the second half of the year this reduction goes up to 2 percent, as we’re now adding 1.2 percent”, said Economy Minister Daniele Franco at a press conference on Thursday.

As the tax relief lasts until the end of the calendar year for a six-month period, the July deduction will be retroactive.

New aid measures announced on Thursday are hoped to boost Italy’s consumer spending power as the cost of everyday goods rises. Photo by ANDREAS SOLARO / AFP

Those earning €35,000 can expect to save around a further €30 per month (1.2 percent of a monthly salary of €2,692 – most Italian salaries are paid out over 13 rather than 12 months to give employees a tredicesima Christmas bonus).

To find out how this may apply to you, it’s advisable to speak to an accountant or your local Italian tax agency (Agenzie delle entrate) office.

More funding for mental health treatment

The new decree will also enhance the existing ‘psychologist bonus’ (bonus psicologo) by allocating an additional 15 million euros to the measure. This will bring the total amount of funds available for the bonus to 25 million euros. 

The bonus was officially introduced at the end of July to help make mental health services more affordable, amid a pandemic-induced crisis in Italy.

All individuals with an Isee (a calculation of relative household income and wealth) lower than 50,000 euros will be eligible to receive a 600-euro voucher, which they’ll be able to use when seeing professionals listed on Italy’s official register of psychologists.

See more information about claiming the bonus in a separate article here.

Discount on public transport tickets

The government will allocate a total of 101 million euros to funding its ‘transport bonus’ (bonus trasporti); 22 million more than the original amount.

The bonus takes the form of a one-time 60-euro discount to be used on the purchase of monthly or yearly tickets for local transport services.

It will be available from September 2022 to all pensioners, students, and employees with an Isee of up to 35,000 euros.

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