Property tax in Italy for foreigners (UK guide)

The contents of this article is for informational purposes only and does not constitute legal or tax advice. Decisions related to tax should be made after thorough research, consultation and verification from a qualified financial and legal advisor.

Thinking of buying a home in Italy, or already own property here and want to let it out? Whatever your plans, you need to get to grips with property taxes in Italy and how they apply to foreign nationals.

We’re here to help, with a rundown of all the main Italy property taxes you need to know about. This includes taxes for buying and selling property, annual charges and taxes for landlords.

We’ll also show you a cost-effective way to pay property tax and other expenses in Italy from the money services provider Wise - the Wise account. It’s not a bank account but offers some similar features, and your money is safeguarded.

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Do foreigners pay tax in Italy?

Yes, foreign nationals - including British citizens - do pay tax in Italy. However, it all depends on whether they are classed as resident or non-resident for tax purposes.

You’re considered a tax resident of Italy if you live there permanently or spend more than 183 days in the country in a tax year.¹

If you’re classed as a resident, this means you have to pay income and other taxes on worldwide earnings and income.

If you spend less than 183 days in the country (for example, if you split your time between Italy and the UK, or another country) per year, you’re considered a non-resident.

This means you’ll only have to pay income tax on anything you earn in Italy. Other income and earnings will be taxed in the country you’re considered to be domiciled or a permanent resident in - for example, the UK.

Who has to pay property tax in Italy?

Everyone who buys, sells or owns property in Italy will probably have to pay property tax.

This includes people classed as non-resident for tax purposes, if they own property and/or earn rental income from property based in Italy.

Property taxes in Italy for foreigners - an overview

If you buy, sell, own or rent out property in Italy, you’ll need to read up on the different types of property taxes and which ones apply to you.

To help make it a little easier, here’s a handy at-a-glance overview:

Type	Tax	Tax rates
Buying a property	*Imposta di Registro *(Transfer Tax/Stamp Duty) Imposta Catastale (Land Registry Tax) VAT (IVA)	2% to 9%¹ €50 to €200 EUR¹ 4% to 22%¹
Selling a property	Imposta sulle Plusvalenze (Capital Gains Tax)	26%²
Annual taxes	IMU (Imposta Municipale Unica) - property tax TARI (Tassa sui Rifiuti) - waste tax	0.76% to 1.14%² Varies
Rental income taxes	Cedolare Secca(Flat-rate tax) Income Tax (IRPEF)	10% to 26%³ 23% to 43%¹

Taxes when you buy a property in Italy

Imposta di Registro (Transfer Tax/Stamp Duty)

When you buy property in Italy, one of the main taxes you’ll need to pay is Imposta di Registro. This is the Italian equivalent of stamp duty, and it’s also known as transfer tax.

The rate is between 2% and 9%, depending on whether it’s your main or second home, and your residency status:¹

• If you’re a tax resident and the property is your main home, the rate is 2%
• If you’re not a resident or you’re buying a second or holiday home, the rate is 9%.

This rate is charged on the cadastral value of the property - we’ll look at what this is and how it’s calculated later in this guide.

Imposta Catastale (Land Registry Tax)

Another tax to be paid when purchasing property is the Imposta Catastale, which is the Land Registry or cadastral tax. This is €50 EUR if buying from a private seller, or €200 EUR if buying from a developer or company.¹

VAT (IVA)

If the property you’re buying is a new build, you may also have to pay VAT - known as Imposta sul Valore Aggiunto (IVA) in Italy.

There’s no IVA to pay if buying from a private seller, but you may have to pay 4% (for a main residence), 10% (for a second home) or 22% (for a luxury home) if buying from a company.¹

Taxes for selling property in Italy

Capital Gains Tax (CGT)

When you sell a property in Italy, you may need to pay Capital Gains Tax (CGT). This is paid only on the profit you make, which is the difference between what you’re selling the property for and what you originally paid for it.

You’ll only pay Capital Gains Tax in Italy if you sell a property within 5 years of buying it. The rate is 26%. If you sell after 5 years of ownership, you should be exempt from CGT. There may also be exemptions if the property was your main home for the majority of the time you owned it, but you’ll need to check with the local tax authorities.²

If you’re not a tax resident of Italy, it’s likely that the capital gains tax rules in your home country (for example, the UK) will apply instead.

It’s worth getting specialist tax advice on this, to help you understand your obligations and which country’s tax laws apply to you.

Annual property taxes in Italy

There are also annual taxes every property owner in Italy must pay, which include IMU and the waste tax known as TARI.

IMU (Imposta Municipale Unica) - property tax

IMU (Imposta Municipale Unica) is an annual property tax which applies to second homes, luxury properties, vacant buildings and land.

It doesn’t apply to main residences, although you may not be eligible for this exemption if you’re not a tax resident in Italy.

The rate is calculated using the cadastral value of the property (we’ll look at that in just a moment), and rates vary between municipalities. You can expect to pay anywhere between 0.76% and 1.14% depending on property type and location.²

IMU is paid twice a year, and you must submit a form and pay yourself - no tax bill, invoice or reminder is typically sent.²

TARI (Tassa sui Rifiuti) - waste tax

All property owners in Italy also have to pay a waste collection and disposal tax known as TARI (Tassa sui Rifiuti) - regardless of whether you’re a tax resident in the country or not. If a tenant lives in the property for more than 6 months, they may be liable to pay it instead of the landlord.²

Rates vary between areas, and the tax is based on the size of the property and number of occupants.

Taxes on rental income in Italy

If you rent out your property in Italy, you'll need to pay tax on the income you make.

Cedolare Secca (Flat-rate tax)

For most landlords who rent property out long-term, the Cedolare Secca (Flat-rate tax) applies.

This rate is 21% for most residential leases, but can be 10% in areas where there is high rental demand or 26% for short-term contracts where more than one property is rented.³

Income Tax (IRPEF)

For situations when Cedolare Secca isn’t an option (such as for non-residents, for example), standard income tax rates will apply to rental income.

These rates are:¹

Income	Tax rate
€0 to €28,000 EUR	23%
€28,001 to €50,000 EUR	35%
€50,001+ EUR	43%

What’s the cadastral value of a property?

Many property taxes in Italy are calculated based on the cadastral value (valore catastale) of the property, rather than its market value.

Every property is given an official valore catastale, which is based on a valuation by the local council or commune. It’s drawn up based on the size, location and quality of the property, and will also vary according to whether the property is used as a main residence or a second home.

The valore catastale usually ends up being lower than the real sale or market value price of the property.

Manage your money between the UK and Italy with Wise

If you own or rent out property abroad while still living in the UK, you’ll need a way to manage your money between currencies. You’ll have bills to pay in Italy, as well as taxes.

Wise offers a cost-effective solution, with a multi-currency account that lets you manage your money between British pounds (GBP) and Euros (EUR) for low, transparent fees* and mid-market exchange rates.

Plus, you can get a Wise card to spend in Euros whenever you’re next in Italy. This clever contactless card automatically converts currency at the mid-market exchange rate, only adding a tiny currency conversion fee, whenever you spend, making it easier to cover everyday expenses.

Sign up with Wise for free

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Sources used:

1. Experts for Expats - Taxes in Italy for expats and non-residents (2025)
2. The Italian Lawyer - Italian property taxes for foreign owners
3. Your Overseas Home - Taxes in Italy – updated tax rates for 2025

Sources last checked 19-Nov-2025