This guide seeks to simplify the process of calculating the Italian IMU property tax and shed light on the pivotal role that ”cadastral income” plays in determining your tax liability in Italy.
If you’re an overseas resident who owns a property in Italy, or an international investment firm with real estate holdings in this Mediterranean country, continue reading to grasp the ins and outs of Italian IMU Tax computation.
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Disclaimer:
This guide pertains solely to residential properties. It excludes references to other types of real estate properties such as luxury homes, agricultural land, building land, commercial premises, offices, and so on. Also, it only concerns owners who have not declared the said property in Italy as their primary place of residence.
This is a streamlined explanation and complexities can arise with multiple properties, diverse land types, and other variables. As such, it’s prudent to seek advice from a professional in Italian taxation to guarantee the accuracy of your tax payments.
IMU tax is imposed on the ownership of real estate properties within Italy, regardless of their residential or commercial utilization. To work out the Italian IMU property tax, or Imposta Municipale Unica, the “cadastral income” (rendita catastale) of your property is the fundamental datum you require.
So, how does one ascertain the cadastral income (rendita catastale) of an Italian property?
There are two methods:
- Reviewing the Property Purchase Contract: typically, the contract of purchase includes the cadastral income. This piece of information is generally located in the notarial deed’s segment that details the property’s classification and its corresponding cadastral income (RC – rendita catastale).
- Cadastral Inspection: in case the purchase contract is inaccessible or unavailable, a “visura catastale,” or cadastral inspection can be requested. This can be accomplished via the Revenue Agency’s (Agenzia delle Entrate) website or at a Land Agency office. Some Local Fiscal Assistance Centres (CAF) also provide this service. A cadastral inspection gives you access to all the property’s data, including its cadastral income.
What is the process of calculating IMU tax?
The formula is quite straightforward:
Tax base = cadastral income + 5% * cadastral coefficient
IMU tax = Tax base * IMU rate.
Now, let’s dissect this calculation:
- determine the Property Cadastral income: as discussed above;
- Reassess the cadastral income by 5%: the reevaluated cadastral income’s value is obtained by multiplying the cadastral income by 5%;
- Compute the Property’s IMU Base Value: upon having the revalued cadastral income of your property, calculate the IMU base value (also known as Valore Catastale in Italian) by multiplying the revalued cadastral income by a predetermined multiplier, which varies based on the property’s nature. For residential properties, as in the case described in this guide, the multiplier is “160”.
- Apply the IMU tax rate: the last step is applying the IMU tax rate to the property’s IMU base value. Currently, in 2023 when this guide was written, the standard IMU rate is 0.76%. Nonetheless, bear in mind that this rate can be subject to an increase or decrease of up to 0.3%, depending on the decisions made by individual local municipalities (thus, it can vary between 0.46% and 1.06%).
Take into Account Potential deductions or exemptions:
Your personal situation could qualify you for specific deductions or exemptions. For instance, a resident who lives in a non-luxury home in Italy is exempt from the property tax. However, this is conditional on the owner having registered this property as their primary residence. Moreover, properties that have historical or artistic interest enjoy a 50% reduction in the IMU tax base.
Let’s delve into an example for better understanding
Suppose:
- the property in question is a non-luxury apartment or villa;
- the cadastral income of the property is 300 Euro;
- the IMU tax rate set by your Municipality is 10,6 ‰ (per thousand);
- the owners are a couple, each holding a 50% stake in the property.
Here’s the step-by-step procedure:
* Attention, the rate is often indicated in ‰ (per thousand) and not in % (per cent). So take this into account in the calculation.
| Calculation example | |
|---|---|
1) Start by enhancing the cadastral income by 5% | 300 x 1.05 = 315 € |
2) Convert the tax rate from per thousand to a percentage value | 10.6 ‰ becomes 1.06% |
3) To determine the IMU base value, also known as “Valore Catastale”, you must multiply the revalued cadastral income by a fixed property coefficient of 160, also referred to as the “coefficiente catastale” | 315 x 160 = 50 400 € |
4) Compute the total IMU tax for the entire year | 50 400 x 1.06% = 534,24 € |
5) As co-owners of the property, you’re required to split the tax in half | 534,24 / 2 = 267,12 € per person for the whole year |
What is the timeline for IMU property tax payments?
Payment of the IMU tax, otherwise known as Imposta Municipale Unica, is usually split into two separate installments – one in June and the other in December.
The first installment: this payment is expected to be made by the 16th of June, amounting to fifty percent (50%) of the total estimated IMU for the current year.
The second installment: this is payable by the 16th of December. It covers the balance of the IMU for that year, computed on the basis of the property’s actual ownership and utilization status.
Bear in mind that the specific due dates and the tax rates could be subject to change in the future, influenced by resolutions made by the Italian government or local municipal authorities.
What is the process for making IMU property tax payments?
You’ll need to fill out a form known as “Modello F24”. This form is utilized in Italy for payment of various taxes and fees. It should contain specific details including tax codes, respective amounts, and pertinent taxpayer data.
You have the option to complete the form online via the website of Agenzia delle Entrate (the Italian Revenue Agency). Alternatively, you can fill in the form physically and submit it at a banking institution, a post office, or other approved payment collection agents.
You can make the payment in person at a bank or post office. An alternate method would be to use the digital F24 form and make the payment online through your bank’s online services.
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Note. It is crucial to understand that this guide is primarily designed to provide a basic understanding of the property tax calculation process in Italy. It does not serve as legal or tax counsel. It is not advisable to take actions solely based on the information contained in this article. The regulations, rates, and exemptions may be subject to future changes, rendering the information in this guide outdated at the time of your reading. Therefore, we are in no way responsible for any consequences arising from relying on this information. We highly recommend that our readers consult with an expert or directly contact our staff for personalized consultation.
