Italy Property Tax Guide 2026 — IMU, IVIE, IVAFE

Overview of Italian Property Taxation

Italy imposes several taxes on real estate ownership and transfers. The main taxes are: IMU (Imposta Municipale Unica) — an annual municipal tax on property ownership, IVIE (Imposta sul Valore degli Immobili situati all'Estero) — a wealth tax on foreign real estate owned by Italian residents, and various registration taxes (imposta di registro, imposta ipotecaria e catastale) on property purchases. The system is based on the cadastral value (valore catastale) of properties, which is typically much lower than the market value.

IMU — Municipal Property Tax

IMU is an annual tax levied by each comune (municipality) on property owners. It applies to all properties except the principal residence (prima casa) and its related appurtenances (unless the property is classified as a luxury property in cadastral categories A/1, A/8, or A/9).

Tax Base: IMU is calculated on the cadastral value (valore catastale) of the property. For most properties, the cadastral value is determined by taking the cadastral rent (rendita catastale) and multiplying it by a coefficient that varies by property category: 1.05 for A/1-A/9 (residential — excluding A/10 offices) × 160; for C/1 (shops) × 55; for C/2-C/7 (storage, garages) × 140; for B (collective residential) × 140; for D (industrial/commercial) × 65; for A/10 (offices) × 80. The cadastral rent is typically very low compared to market rent because valuations are based on historical 1988-1989 values with periodic adjustments.

Standard Rate: The basic IMU rate is 0.86% of the cadastral value. Municipalities may increase or decrease the rate by up to 0.3 percentage points (to a maximum of 1.14%). For luxury principal residences (A/1, A/8, A/9), the standard rate is 0.5% (municipalities may vary it). For agricultural land, the rate varies by type.

Exemptions: The principal residence (prima casa) is exempt from IMU, with the following exceptions: luxury properties in categories A/1, A/8, and A/9 remain subject to IMU (though at the reduced 0.5% rate). Properties rented out at controlled rents (affitti concordati) benefit from a reduced IMU rate (municipalities may apply a rate of 0.76% or lower). Properties used for certain agricultural purposes may be exempt or subject to reduced rates.

Payment: IMU is paid in two instalments: 16 June (first instalment based on the previous year's rates) and 16 December (balance adjustment for the current year's rates). Payments are made using the F24 form with specific IMU codes (codice tributo). Late payment incurs interest and penalties (0.1% per day for the first 15 days, then 0.66% per month up to 30% maximum).

IVIE — Wealth Tax on Foreign Real Estate

IVIE (Imposta sul Valore degli Immobili situati all'Estero) is an annual wealth tax on real estate located outside Italy owned by Italian tax residents. It functions similarly to IMU but applies to foreign properties.

Rate: The standard IVIE rate is 1.06% of the property's value. A reduced rate of 0.76% applies to the taxpayer's principal residence (or main dwelling) abroad, provided no similar wealth tax is levied by the country where the property is located. The tax is proportional to the taxpayer's ownership percentage.

Value: The taxable value is the purchase price or market value at the end of the tax year, whichever is higher (or the cadastral value in the country of location if available). If the property is located in a country that levies a similar property tax (e.g., UK Council Tax, French Taxe Foncière), that tax may be credited against IVIE on a proportional basis, up to the Italian IVIE due. For EU properties, the foreign tax is generally creditable.

Filing and Payment: IVIE is declared on the Modello Redditi PF (quadro RM — foreign assets section) and paid by the same deadlines as IRPEF (30 June first instalment, 30 November balance). The total IVIE due for properties in a given country is capped at the market value of all properties in that country.

IVAFE — Wealth Tax on Foreign Financial Assets

IVAFE (Imposta sul Valore delle Attività Finanziarie detenute all'Estero) is an annual wealth tax on financial assets held abroad by Italian tax residents. This includes bank accounts, investment portfolios, stocks, bonds, mutual funds, and other financial products held outside Italy.

Rate: The standard IVAFE rate is 0.2% of the market value of the financial assets at the end of the tax year (or the end of the holding period if disposed of during the year). Bank accounts and cash deposits are subject to a flat tax of €34.20 per account (if the average account balance exceeds €5,000). This is not proportional — it is a fixed annual amount per account, regardless of the balance above €5,000.

Exemptions: The following are exempt from IVAFE: bank accounts with an average annual balance below €5,000 (no IVAFE and no €34.20 fixed tax), financial assets held in countries with which Italy has an exchange of information agreement (but only if the assets are already subject to Italian substitute taxes or monitoring), and certain pension funds and insurance policies.

Filing and Payment: IVAFE is declared on the Modello Redditi PF (quadro RM) along with IVIE and foreign income. The tax is paid using the F24 form by 30 June (first instalment) and 30 November (balance). Penalties for non-declaration of foreign assets are severe: 3-15% of the undeclared asset value for each year of non-compliance (minimum €258).

Property Transfer Taxes (Purchase)

When purchasing property in Italy, the following taxes apply depending on whether the seller is a private individual, a VAT-registered company, and whether the property is the buyer's primary residence:

Private Sale (no VAT): For purchases from a private individual or a company selling outside of VAT: (a) Primary residence — registration tax 2% on the cadastral value (not the purchase price), fixed mortgage tax €50, fixed cadastral tax €50. (b) Secondary residence — registration tax 9% on the cadastral value, mortgage tax €50, cadastral tax €50. The cadastral value for transfer tax purposes is calculated as: cadastral rent × 115.5 (for most residential properties).

VAT Sale (from company): If the seller is a VAT-registered company, the purchase may be subject to IVA instead of registration tax: (a) Primary residence — 4% IVA (on the full purchase price), plus registration tax €200, mortgage tax €200, cadastral tax €200. (b) Secondary residence — 10% IVA (on the full purchase price), plus fixed taxes of €200 each. (c) Luxury properties (A/1, A/8, A/9) sold by VAT-registered companies — 22% IVA.

Additional Taxes: A registration tax of 3% applies to the purchase of agricultural land if the buyer already owns agricultural land (with certain exceptions for first-time farmers). An INPS contribution of 3.5% applies to purchases by non-agricultural entities of agricultural land.

FAQs

Do I pay IMU on my primary residence?

No — the principal residence (prima casa) is exempt from IMU, except for luxury properties in cadastral categories A/1 (grand villas), A/8 (villas), and A/9 (castles and palaces). However, you still pay the TARI (waste tax) separately. If you own a second home in Italy, it is always subject to IMU at the applicable municipal rate. Properties rented out under affordable rent agreements (affitto concordato) may qualify for a reduced IMU rate determined by each comune.

What are the tax implications of selling a property?

Capital gains on the sale of residential property are generally not taxable for individuals if the property was held for more than 5 years from the date of purchase or if it was the seller's principal residence for most of the holding period. If sold within 5 years of purchase (and not the principal residence), the gain is treated as reddito diverso and taxed at IRPEF progressive rates (not at the 26% flat rate). Companies always include property gains in their taxable income. Non-residents are subject to the same rules (no CGT if held >5 years or principal residence).

What is the Stamp Duty (Imposta di Bollo)?

The imposta di bollo (stamp duty) is an annual tax on financial accounts and products. For bank accounts, it is €34.20 per year if the average annual balance exceeds €5,000 (this is the same tax that applies to foreign accounts as IVAFE). For investment products (securities accounts, mutual funds, insurance policies), the stamp duty is 0.2% per year of the market value (capped at €14,000 for certain products). This is separate from IVAFE — the imposta di bollo applies to domestic Italian accounts, while IVAFE applies to foreign accounts.

Disclaimer

This guide is for informational purposes only and does not constitute tax advice. Italian property tax law is complex and subject to frequent change. Consult a qualified commercialista or tax advisor for advice specific to your situation. Rates and thresholds for 2026 are based on legislation enacted by June 2026.