# Income tax on rental property



## Loopy12 (Aug 19, 2019)

After nearly ten years in Italy we’ve had to move away for work reasons for a couple of years. While we’re gone our home is rented out. My understanding is that income tax on rental properties is 21%, and no tax deductions from mortgage, repair, maintenance etc.
Are there other taxes in this situation, other than IMU and TARI. We got the income tax bill from my Italian accountant and it’s whole lot more than 21%. Is there some tax for being overseas landlords? Or is a certain amount charged as a credit towards the next year? Obviously I will query it with the accountant but I wondered if I’m missing something obvious.


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## NickZ (Jun 26, 2009)

21% is the flat rate but requires you follow all the rules 



https://www.idealista.it/news/finanza/fisco/2022/02/18/157816-contratto-di-locazione-con-cedolare-secca-il-modello-per-affittare-casa-senza-problemi#:~:text=Il%20contratto%20di%20locazione%20con%20cedolare%20secca%20prevede%20una%20tassazione,fiscale%20non%20offre%20solo%20vantaggi


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If you don't you pay the normal rate but get full deductions.

The other thing is you may still be Italian tax resident. Did you cancel your residence? Even if you did keeping a home and other possessions could run you afoul of the centre of interests test. Especially if you're planning to return.


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## NickZ (Jun 26, 2009)

BTW if your only Italian income is the home rental the flat rate might not even work out best for you. Unless you're renting out a luxury villa net of deductions you might be better off paying the normal rate. I think starting at 23%


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## Loopy12 (Aug 19, 2019)

I did cancel my residence, and have the paperwork. The house is my only remaining tie, no other possessions or anything there. If it’s like the UK system then I certainly have more ‘ties’ where I am now than to Italy. 

Although returning is an option in the future, it’s certainly many years out. I would love to sell the house but a tenant came along as an option faster than a buyer, plus it’s value had fallen 20% since we bought due to the local market.


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## NickZ (Jun 26, 2009)

All the countries use a more or less standard test for ties.


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## Voidist (Jul 5, 2021)

Loopy12 said:


> After nearly ten years in Italy we’ve had to move away for work reasons for a couple of years. While we’re gone our home is rented out. My understanding is that income tax on rental properties is 21%, and no tax deductions from mortgage, repair, maintenance etc.
> Are there other taxes in this situation, other than IMU and TARI. We got the income tax bill from my Italian accountant and it’s whole lot more than 21%. Is there some tax for being overseas landlords? Or is a certain amount charged as a credit towards the next year? Obviously I will query it with the accountant but I wondered if I’m missing something obvious.


thats italy and spain for you..You never know who it really works when they tax foreigners


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