Real Estate Taxation in San Marino

Real estate taxation in San Marino covers multiple areas including rental income, property purchases, annual property taxes, and disposal. This guide provides an overview of the tax implications for property owners and investors.

Rental Income Taxation

Rental income from property in San Marino is generally treated as ordinary income and taxed at the applicable rates:

Individuals: Net rental income taxed at progressive PIT rates (0-35%)
Corporations: Included in business income, taxed at 17%
Non-Residents: Withholding tax may apply

Allowable Deductions for Rental Income

Landlords can deduct expenses incurred in earning rental income, including:

Property Management Fees: Fees paid to property management companies
Maintenance and Repairs: Costs to maintain the property in good condition
Insurance Premiums: Building and landlord liability insurance
Mortgage Interest: Interest paid on property loans
IMI Property Tax: Annual property taxes paid
Utilities: If paid by the landlord
Depreciation: Building depreciation

Property Purchase Taxes

When purchasing property in San Marino, buyers should budget for:

Transfer Tax: 3-5% of property value
Registration Duty: Approximately 1%
Notarial Fees: Typically 0.5-1%
Legal Fees: Vary, typically 1-2%

Annual Property Tax (IMI)

The annual IMI property tax ranges from 0.3% to 0.7% of the cadastral value. The rate depends on the type of property and whether it is owner-occupied or a second home.

Capital Gains on Property

Gains from the sale of property may be taxable if sold within 5 years of acquisition:

Individuals: Gain taxed at progressive PIT rates if sold within 5 years
Primary Residence: Exempt
Holding Period Over 5 Years: Generally exempt for individuals

Depreciation of Rental Property

The building structure (not land) can be depreciated for tax purposes:

Method: Straight-line depreciation
Rate: Typically 2-3% per year
Basis: Construction cost or acquisition cost allocated to building