Secondary residence in Italy: what owners need to know
Italy – the land of joie de vivre, culinary delights and history. For many Germans, creating a second home there is a long-cherished dream. Whether it’s a Tuscan country house, a city flat in Rome or a little house by the sea – the longing for the ‘Dolce Vita’ is great. However, anyone who does not use a property in Italy as their main residence should obtain comprehensive information. After all, a second home entails special tax, legal and organisational features. In this article, you will learn in detail what is important.
What is a secondary residence in Italy?
A second home, or ‘seconda casa’ in Italian, is a property that is not permanently used as a main residence. The distinction is made not only based on the registration address, but also on the actual use.
For example, if you live in Germany, are registered there and only use your Italian property on holiday or occasionally, it is classified as a second home for tax purposes in Italy. In this case, it is not necessary to register with the Italian municipality, as the so-called ‘residenza’ is only required if you move the centre of your life there.
There are three basic categories:
- Primary residence (abitazione principale): This is the centre of life. Tax-favoured, often exempt from local taxes.
- Secondary residence (seconda casa): Not permanently occupied, no tax concessions.
- Holiday property: Sub-category of second home, mainly intended for tourist use.
In addition to the definition, the use is also decisive. Anyone who not only uses their property privately, but also offers it for short-term rental, can be categorised differently for tax and administrative purposes.
Taxes and duties for second residencies
Owning a house or flat in Italy is associated with ongoing costs. These vary depending on use and municipal regulations. The following taxes are particularly relevant:
IMU – Imposta Municipale Unica
The IMU is a municipal property tax levied on second homes. Primary residences are generally exempt. The calculation is based on the cadastral value of the property, multiplied by a fixed coefficient and the tax rate of the respective municipality. In some municipalities, the tax rate can be as high as 1.06%.
Example: With a cadastral value of €100,000 and an IMU rate of 0.96%, this results in an annual tax burden of €960.
TARI – Tassa sui Rifiuti
TARI is a waste tax that is payable even for occasional use. It is based on the size of the property (in square metres) and the number of registered users. Holiday homes also have to pay this fee, even if they are only used for a few weeks a year.
TASI – Tributo per i Servizi Indivisibili
This tax was abolished in 2020 but used to be an important part of the running costs. In some municipalities, however, special taxes are still levied for municipal services such as street lighting or snow clearing. It is worth checking the municipal regulations individually.
IRPEF – Imposta sul Reddito delle Persone Fisiche
This income tax is payable if the property is rented out or used by the owner for more than 183 days per year. It applies to both Italian and foreign owners. If the property is rented out, the income must be taxed in Italy. Depending on the double taxation agreement, the rental income must also be declared in Germany.
An example: If a property is rented out for €8,000 per year, the Cedolare Secca will charge 21% tax on the rental income, i.e. €1,680.
The 183-day rule: avoiding tax residency
Anyone who spends more than half the year in Italy may be considered a tax resident there. This has far-reaching consequences:
- Obligation to submit an Italian tax return
- Taxation of worldwide income in Italy
- Registration with the Italian tax office required
Important: A secondary residence alone is not sufficient to be considered a tax resident. The decisive factors are length of stay, family ties, place of work and social security. In case of doubt, individual tax advice can help.
Administrative issues and legal basis
Required documents
You should prepare the following documents before buying a property:
- Codice Fiscale: The Italian tax number is mandatory for every property purchase.
- Proof of identity: Passport or identity card
- Purchase contract and land register entry: After the purchase, you will receive a notarised deed (Rogito) and the entry in the land register.
- Energy certificate (Attestato di Prestazione Energetica – APE): Mandatory when buying and renting.
Communication with authorities
Many forms and administrative processes are only available in Italian. It is therefore advisable to work with a German-speaking agent or lawyer. This not only facilitates the purchase, but also subsequent administrative tasks such as tax declarations or renovation notifications.
On-site management
If you will not be using your property yourself on a permanent basis, you should consider appointing a property manager. With a corresponding power of attorney, they can:
- Coordinate tradesmen
- Settle bills
- Monitor the property during your absence
- Carry out regular visual inspections
- Handle rental enquiries
A reliable property manager is worth their weight in gold, especially in remote regions.
Financing and banking practice
Foreign buyers can either finance Italian property with equity or take out a mortgage loan from an Italian or German bank. Different conditions apply:
- Italian banks generally finance up to 60-70% of the property value
- An Italian tax number and credit check are required
- Loan agreements are exclusively in Italian
Tip: Obtain offers from several banks and get support from an independent financial advisor if you have language barriers.
Letting: opportunities and obligations
The temporary letting of an Italian second home is generally permitted, but is subject to certain regulations:
- Tourist use: Must be registered with the relevant municipality.
- Regular letting: Requires a business registration (Partita IVA).
- Taxes: Income must be taxed in Italy. The ‘Cedolare Secca’ system with a fixed tax rate offers a simplification.
- Obligation to register: All guests must be registered with the police.
In addition, regional regulations such as registration numbers or minimum stays may apply – for example in Florence or Venice.
Caution: Unregistered rentals can lead to high fines. Timely tax and legal advice is strongly recommended.
Inheritance and succession
Italian inheritance law differs significantly from German law in some respects. Anyone who owns a property in Italy should think about succession planning at an early stage.
- Italian law: Applies to properties on Italian soil, regardless of citizenship.
- Inheritance tax: Depends on the degree of kinship. Spouses and children pay significantly less than distant relatives or third parties.
- Will: A will should be supplemented by an Italian will or recognised by a notary.
- Notarial assistance: The Italian notary (notaio) is central to the handling of the inheritance.
A lawyer specialising in international inheritance law can provide valuable assistance here to ensure that the property is inherited in a legally secure manner and to avoid disputes.
Example: The Müller family buys a holiday home in Tuscany
The Müller family from Hamburg fulfils their dream and buys a country house in Tuscany. They use it three to four times a year, for a fortnight at a time. The rest of the time, the house remains empty or is occasionally rented out to friends.
What does that mean in concrete terms?
- The property is categorised as a second home – IMU and TARI apply.
- As you spend less than 183 days a year in Italy, you are not considered a tax resident.
- They are supported by a local manager who takes care of the garden, building services and occasional lettings.
- They have their annual taxes managed by a tax consultant.
By making comprehensive preparations, they avoid unpleasant surprises and can enjoy their time away in Italy to the full.
Conclusion: Well, informed about a second residence in Italy
A house in Italy is more than just an investment – it is a decision of the heart. To ensure that the dream doesn’t turn into a bureaucratic nightmare, good preparation and ongoing maintenance are crucial. If you are familiar with tax obligations, the legal framework and the organisational effort involved, you can really enjoy your Italian home in a relaxed manner.
