Tax in Italy
See what Italy's tax rules do to your property portfolio.
What Freeholt models for property, income and retirement in Italy, and what it does not.
Free to start. No card. Rules reviewed 1 July 2026.
Modelled here
- Tax on rental income
- Capital gains on a sale
- Duty on purchase (approximate)
- Annual property or land tax
- Income tax beyond the rent
- Dividends, interest and share sales
- Retirement savings
EUR · Rates as at 1 July 2026 · Rates editable in Settings · Estimates, not advice
Most landlords elect the cedolare secca: a flat 21% on gross residential rent (10% for capped rent contracts) replacing progressive IRPEF, for residents and non residents alike. Gains are tax free once held 5 years.
How rental income is taxed in Italy
For a resident owner: A flat 21% on gross rent. For an owner living abroad and renting this out: A flat 21% on gross rent.
Interest and losses
A rental loss brings no relief: it cannot reduce other income, and it does not carry forward.
Capital gains on a sale
Gains are taxed at a flat 26%. The gain is fully exempt once the property has been held 5 years.
Annual property tax while holding
About 0.86% a year, charged not on the market price but on the official assessed value, which is typically nearer 50% of it. Enter the assessed value on the property and the estimate sharpens.
What it costs to buy
Purchase duty here is more than a single rate, and Freeholt prices the published rules rather than an average. Resale second homes pay 9% registration tax on the (usually much lower) cadastral value, or 2% for a main home; new builds from a developer attract 4 to 10% VAT.
Buying here from abroad
The rules a foreign or non resident buyer meets here, as at 23 October 2026. Each line links to the official page it comes from, which is the one to rely on as these rules change. Estimates for planning, not advice.
- Under Article 16 of the preliminary provisions to the Civil Code, a foreign citizen enjoys the civil rights of an Italian citizen, including buying property, on condition of reciprocity. Official source
- Citizens of EU and EEA states are treated like Italian citizens and are exempt from the reciprocity check, as are foreigners lawfully resident in Italy. Official source
- The 2% first home registration tax, instead of 9%, needs the home to be in the municipality where the buyer lives or moves residence within 18 months, and a buyer who does not move loses the 2% rate and pays 9% with interest and penalties. Official source
Residents of Italy with property abroad
Italy taxes rent from abroad at its ordinary income tax rates on 85% of the gross rent. The 21% flat rate (cedolare secca) applies to Italian lettings only. Regional and municipal surcharges are not included. A credit is given for tax paid where the property is. A gain within five years of buying is taxed at the ordinary income tax rates, because the 26% substitute tax is chosen in an Italian notary's deed; after five years it is exempt. Italy also charges IVIE, a yearly tax of 1.06% of the value of property abroad. It is not included in Freeholt's figures. Special regimes for people who have just moved to a country are not included in Freeholt's figures.
Income tax in Italy, beyond the rent
Progressive, up to 43%. The bands run Up to 28,000 at 23%; 28,000 to 50,000 at 33%; Above 50,000 at 43%. Rental profit is taxed separately, not on this ladder. Figures in EUR, as verified 29 August 2026.
Dividends, interest and share sales
How Italy taxes investment income. For dividends: Flat 26%. For interest: Flat 26%. For share sale gains: Flat 26%.
Pensions and retirement savings
ETT. Taxed at more than one stage. Contributions come off taxable income. Capped at 5,164.57 a year. Growth inside the fund is taxed at 20%. Withdrawals can start from age 67. The rest is taxed as income.
How Freeholt models Italy
Every rate above is priced from Freeholt's own table for Italy and runs through the whole projection: rental income, a modelled sale and the annual holding costs all use the same figures. They are also defaults that can be edited in Settings, so a position that differs, or a rate that changes before we catch it, can be corrected and the projection reprices around it.
What running this property costs
In Italy this covers IMU (due on second homes), condominio fees, insurance, maintenance and ~8 to 10% management fees.
How borrowing works here
Terms up to ~25 to 30 years; non residents are typically capped near 50 to 60% LTV and many foreign purchases are cash.
What actually happened here
This country's own record, one year at a time. Nothing on this page is borrowed from another country. Move across a chart to read a year.
Recent rule changes in Italy
- Senate bill S.1828 would bring back a permanent 21% cedolare secca for shop and office leases. The 2027 budget's property measures were still only reported as options at 19 Oct 2026.(proposed only, never priced into your figures)
What Freeholt models here
- ModelledTax on rental income
- Resident and non resident rates, with interest and losses treated under the local rule.
- ModelledCapital gains on a sale
- Priced in the year of the sale under the rules of that year.
- ApproximateDuty on purchase
- The published scale is priced from the rules in force, which differ by band and by buyer.
- ModelledAnnual property or land tax
- Charged every year the property is held.
- ModelledIncome tax beyond the rent
- Salary and other income, stacked with the rent.
- ModelledDividends, interest and share sales
- Investment income and gains, with the local allowances.
- ModelledRetirement savings
- Contributions, the fund and the way out.
- Not yetInheritance and what happens on death
- Not modelled for this country yet.
What Freeholt does not model here
- Inheritance and estate tax
- Treaty relief between this country and the owner's country of residence
What the figures above leave out (10)
- Italy's regional and municipal surcharges are not included. The real bill is higher.
- Italy's detrazioni (the tax credits for employment, pension and family dependants that come off the IRPEF bill) are not applied, so the tax is overstated. The gap is largest at low incomes, where the credits are the biggest part of what they offset.
- Italian income tax for a non resident is not modelled: no non resident treatment was sourced, and the resident ladder is not borrowed in its place. No figure is shown, and had one been guessed its direction would not even be known, because a non resident may pay more or less than a resident.
- Italian rent is treated here as though the cedolare secca flat tax had been elected. A landlord who has not elected is taxed inside the IRPEF ladder instead, so their tax is understated.
- Government bonds are taxed at a lower 12.5% in Italy; the 26% shown overstates them.
- Italy charges a pension fund withdrawal at a reduced substitute rate that falls the longer the member has been in the scheme, sitting below the ordinary IRPEF rates. No figure for it was sourced, so the withdrawal is charged at the member's own marginal rate, up to 43%, which overstates the tax for most retirees and by the widest margin for the longest serving members.
- An Italian pension fund's growth is taxed here at 20% on the whole pot, where the part held in government bonds (titoli di Stato) is taxed at 12.5%. The annual drag on a bond heavy fund is overstated, by 60% of the true figure for a fund held wholly in government bonds.
- Italy's access age here is the INPS state retirement age of 67, standing in for the fund's own rule, so any earlier withdrawal is refused rather than priced.
- No tax free slice of an Italian pension is assumed, because none was stated. If one exists, the tax shown is too high.
- Only Italy's voluntary second pillar, the fondi pensione and PIP plans, is modelled. The mandatory INPS state pension is funded from current contributions, with no pot behind it, and is not included, so this is not the whole of an Italian retirement income.
Coverage deepens country by country. Every figure is an estimate, not advice.
Compare with another country
Each page is built from the same table the app runs on, so the figures line up side by side.
Compare Italy with another country — rent, gains, annual tax and duty, side by side.
Questions people ask
- Does Freeholt model Italy property tax?
- Yes. Rental income tax, capital gains on a sale, duty on purchase and annual property or land tax are priced from Freeholt's own rate table for Italy. Duty on purchase carries a simplification that the page names beside the figure. Any rate or threshold can be corrected in Settings so the whole projection reprices. Every figure is an estimate, not advice.
- How is rental income from Italy taxed if I live somewhere else?
- A flat 21% on gross rent. Tax may also be due in the country of residence, with credit for what was paid here. Estimates only, not advice.
- What are the Italy figures as at?
- The rate table for Italy was last reviewed on 1 July 2026. Freeholt date stamps every country rather than implying all of them were checked on the same day. Estimates only, not advice.
Model a property in Italy alongside everything else you own: see the year your portfolio starts paying you back.