A guide to property tax in Italy 2025

Up-Front Purchase Taxes in Italy (2025)

When you buy property in Italy, you’ll face a set of one-time taxes and fees. These vary based on who you are buying from, whether it is your main home or a second residence, and the type of property.

Key up-front costs

Cadastral Value vs. Market Value

Most taxes in Italy are based on the valore catastale (cadastral value), not the full market price. This value is usually 30 to 60 percent lower than the price recorded in the deed. It is calculated using government-set formulas based on the property’s size, location, and classification.
Tip: Ask your notary or estate agent to provide an estimate of the property’s cadastral value before signing any contracts. It will help you calculate your real tax burden accurately.
 

Annual Property Taxes: IMU, TARI and More

Once you own property in Italy, you’ll need to budget for yearly municipal taxes and maintenance-related costs. These are based on property usage and location.
 

IMU (Imposta Municipale Unica)
IMU is the main annual property tax in Italy. Rates are set locally by each comune (municipality), within national guidelines. As of 2025, the standard band ranges from 0.4% to 1.06% of the cadastral value. The calculations can be complicated and vary between municipalities, so it's best to consult an accountant.

• If you are a resident and register the property as your primary home, you are usually exempt.
• If it is a second home, holiday property or you are a non-resident, IMU will apply.

TARI (Waste Collection Tax)
TARI is the annual rubbish and recycling collection fee. It is based on the size of the property and the number of registered occupants. Most homeowners pay between €150 and €500 per year, though this varies by region and usage.

Some second-home owners pay a reduced TARI rate if the property is not continuously occupied.

Condominium or Service Charges
If your property is part of a shared development, you may need to pay condominium fees. These are separate from taxes and cover things like:
 

• Maintenance of communal areas
• Cleaning, gardening and lighting
• Shared utilities, lift servicing and repairs

Costs vary widely but expect anywhere from €500 to €2,000 per year depending on the location and amenities.
Tip: Before buying, ask for the most recent service charge accounts and confirm any planned major works with the building administrator. For more information about how to buy property in Italy, check out our guides that can help guide you through this new chapter.

Other Recurring Levies

Second-Home Surcharges
If you are buying a second property in Italy — or you are not a registered resident — you will face higher tax rates than those buying a primary home. This is reflected in:

• Higher registration tax (9%)
• IMU always being charged
• Possible surcharge on TARI if the home is used seasonally

Municipalities may also apply increased rates on utilities or services for second homes, especially in tourist areas.
 

IVIE (Wealth Tax on Foreign Properties)
This only applies to Italian residents who own property abroad, but it is worth noting in case you already live in Italy and maintain another home elsewhere.
 

• IVIE is charged at 0.76% of the property’s value abroad.
• If you pay property tax in the country where your home is located, you may be able to offset this amount to avoid double taxation.

This tax does not apply to foreign nationals who own property in Italy but live elsewhere.

Capital Gains Tax on Property Sales

Capital gains tax applies when you sell a property in Italy for more than you paid.
The key rule is the five-year exemption:
 

• If you sell more than 5 years after purchase, no capital gains tax applies.
• If you sell within 5 years, tax is charged at 26% on the profit (after allowable deductions).

Allowable Deductions

You may subtract the following from your sale profit:
 

• Notary and legal fees
• Renovation or improvement costs (with invoices)
• Agent fees and taxes paid at purchase

Tip: Keep clear records of all expenses from your purchase and any renovations. These documents will be essential if you sell within five years.

Inheritance and Gift Tax
If you plan to pass your Italian property on to family or receive one as a gift, inheritance and gift tax applies.
Italy has generous allowances before tax is due:

These are based on each heir, not the total estate value.
 

Double Taxation Treaties
The UK, US and several other countries have treaties with Italy to prevent the same estate being taxed twice. Your notary or a legal advisor can help confirm your eligibility.

Regional and Municipal Variations

While national guidelines apply, most property taxes in Italy are set locally. Each comune can adjust rates for IMU and TARI within the allowed national band.
For example:

• IMU in Florence or Rome may be close to 1.06%
• IMU in rural Tuscany or Umbria may be 0.4–0.6%

Even the cadastral value of your home is affected by the location, so the same-sized house in Puglia might have a much lower tax base than one in Milan.
 

Tip: Always ask your agent or notary for a property’s cadastral value and local tax rates before making an offer. This can have a big impact on your annual ownership costs.

Tax Breaks and Incentives (2025)

Italy offers several incentives to reduce tax burdens, especially for new residents or those improving older homes.
 

Superbonus (Energy Renovation)
While scaled back in 2025, energy-efficiency incentives still exist. You may be able to claim a tax credit of 50–70% of renovation costs if:
 

• The works improve insulation or heating systems
• The property is your main residence (or a long-term rental)
• You use an authorised contractor and submit the proper documents

Note: Many buyers choose to factor renovation into their purchase plan to benefit from these credits.

Flat Tax for New Residents
Foreigners who move to Italy and register as tax residents may apply for a €100,000 flat tax on all global income, valid for 15 years. While this doesn’t directly reduce property tax, it can significantly simplify your wider tax situation.

Practical Budget Checklist: One-Off and Annual Property Costs

To help you prepare for a smooth and surprise-free purchase, here is a simple breakdown of common costs you should plan for. These are illustrative figures and may vary by location and property type. If you need more tips on how to get a mortgage in Italy, check out our guide for requirements and useful advice. 

One-Off Costs (at Purchase)

Annual Costs
 

Tip: Always ask your agent or notary to estimate both initial and ongoing costs. Cadastral values may differ sharply from market prices, and these are what taxes are based on.

Real-Life Case Study: Buying a €300,000 Tuscan Home

To help bring all this information to life, let’s walk through a realistic example. Imagine you’re buying a charming countryside villa in Tuscany, near Montepulciano, as a holiday home. It’s a characterful stone property with two bedrooms, a small olive grove, and a swimming pool, listed at €300,000.
 

You’re a UK buyer purchasing from a private seller, and this will be your second home. You’re not applying for residency just yet, so you’ll be subject to the standard taxes and fees for non-residents.
 

Here’s a breakdown of what you could expect to pay, not just during the purchase, but in the years that follow.
 

Property Details

• Market price: €300,000
• Cadastral value: €180,000
• Buyer residency: Non-resident
• Seller type: Private individual

One-Off Costs

• Registration tax (9% on cadastral value): €16,200
• Stamp duty and registration fees: €400
• Notary and legal fees: €2,500
• Surveyor and technical checks: €1,000
• Agency fees (3% of sale price): €9,000

Total purchase cost: €29,100
Grand total: €329,100

Annual Costs
 

• IMU (0.86% of cadastral value): €1,548
• TARI: €300
• Condominium fees: N/A (standalone property)
• Insurance: €250

Total annual cost: €2,098

This helps show how second-home ownership in Italy is not just about the purchase price. Long-term planning will help you avoid surprises and feel confident about your investment.

Frequently Asked Questions

Do I have to pay IMU if I’m retired or only living in Italy part-time?
Yes, unless the property is your primary residence and you are officially registered as a resident in the local commune, you will typically have to pay IMU. Most foreign buyers using the home as a second property are subject to this tax, regardless of how often they visit.
 

What taxes do I pay when I buy a house in Italy?
You will usually pay a registration tax (Imposta di Registro), mortgage tax (Imposta Ipotecaria), and land registry tax (Imposta Catastale). The amounts vary depending on whether you buy from a private seller or a company, and whether the home is a first or second residence.

Are property taxes in Italy higher than in other European countries?
Generally, no. Italy’s ongoing property taxes are relatively modest compared to countries like France or the UK. However, upfront purchase taxes can be significant, especially if you're buying a second home or a new build.

How can I reduce my property tax bill in Italy?
Registering the home as your main residence can significantly lower your IMU liability. Buyers moving permanently to Italy may also qualify for the flat tax regime or renovation incentives like the Superbonus. Speak to a local notary or accountant before purchasing to plan ahead.
 

Do I need to pay tax if I sell my Italian home?
Capital gains tax may apply if you sell within five years of purchase and the property is not your main residence. After five years, the sale is usually exempt. If you are liable, tax is charged on the difference between the sale price and the documented purchase cost, including any deductible improvements.
 

What is the cadastral value and why does it matter?
The cadastral value is an official valuation used by the government for tax purposes. Most purchase taxes and annual charges are based on this figure, which is often lower than the market value. Make sure you understand the cadastral value of the property before buying.
 

Are there any hidden costs to be aware of when buying in Italy?
Yes — notary fees, translation services, and agency commissions can add thousands to your purchase price. Budget at least 10 to 15 percent above the sale price to cover all taxes and fees comfortably.
 

Can foreigners inherit property in Italy without paying tax?
Yes, but inheritance tax may still apply. Italy has generous exemptions for close relatives, but rules differ depending on the relationship and the value of the property. It’s a good idea to consult a tax specialist if you plan to pass the property on to heirs.

Final Words on Property Tax in Italy

Buying a property in Italy is a dream for many, and understanding the tax landscape is a key part of making that dream a reality. With the right advice and a clear budget, you can feel confident about your investment.
Whether you are looking for a character farmhouse in Tuscany, a city apartment in Rome, or a beachfront villa in Puglia, Kyero can help you every step of the way.