What is IMU tax in Italy and how much is it for a second home?

IMU (Imposta Municipale Unica) is Italy's annual property tax, equivalent to council tax. It applies to all second homes including those owned by non-residents. The rate is set by each municipality, typically 0.86–1.06% of the cadastral base value. For a typical holiday home in Salento with a cadastral value of €80,000–100,000, IMU costs approximately €800–€1,600 per year.

Do I pay tax on rental income from my Italian property?

Yes. If you rent out your Italian property, you must declare the income in Italy. The most common option for holiday lets is Cedolare Secca — a flat 21% tax on gross rental income from short-term rentals (under 30 days). You must file an Italian tax return (Modello Redditi PF) if you earn rental income. An Italian commercialista (accountant) can handle this for €400–€1,200 per year.

What is the registration tax when buying a second home in Italy?

The registration tax (Imposta di Registro) for a second home in Italy is 9% of the cadastral value — typically 30–50% lower than the market price. Plus fixed taxes of €50 each for mortgage and cadastral registration. If you transfer your official residency to Italy within 18 months of purchase, the rate drops to 2% (prima casa concession).

What are the total annual costs of owning a holiday home in Salento?

For a typical holiday home in Salento, expect annual costs of: IMU €800–€2,500 (depending on cadastral value and municipality), TARI waste tax €200–€600, and accountant fees €400–€1,200 if renting the property. Total annual holding costs typically range from €1,400 to €4,300 before utilities and maintenance.

Property Taxes Italy Foreign Buyers: IMU Guide

Understanding property taxes in Italy is essential before committing to a purchase. Foreign buyers often focus on the purchase price and notary costs but overlook the ongoing annual tax obligations that come with owning Italian property. This guide covers every tax you will encounter — at purchase and annually — as a foreign owner of property in Salento.

Taxes at Purchase: One-Off Costs

When you buy property in Italy, you pay three taxes at the notary on completion day:

Imposta di Registro (Registration Tax) — the main purchase tax. For a second home: 9% of the cadastral value. For a primary residence (if you transfer residency to Italy within 18 months): 2% of cadastral value.
Imposta Ipotecaria (Mortgage Tax) — fixed €50 for a second home purchased without a mortgage. 2% of loan amount if purchasing with an Italian mortgage.
Imposta Catastale (Cadastral Tax) — fixed €50 for a second home.

The cadastral value (valore catastale) is a government-assigned value typically 30–50% below the market price. This means the effective registration tax is substantially lower than 9% of what you actually pay for the property.

IMU — The Italian Annual Property Tax

IMU (Imposta Municipale Unica) is the main annual property tax in Italy, equivalent to council tax in the UK or Grundsteuer in Germany. It applies to all second homes — including properties owned by non-residents.

How IMU is calculated:

Base = cadastral value × revaluation coefficient (1.05) × category multiplier (160 for residential)
IMU rate: set by each municipality, typically between 0.86% and 1.06% of the calculated base

Practical example — villa in Porto Cesareo, market value €350,000:

Cadastral value (estimated): €90,000
Revalued base: €90,000 × 1.05 × 160 = €15,120,000 ÷ 1000 × rate
At 1.06% rate: approx. €1,603 per year

IMU is paid in two instalments: 16 June (advance, 50%) and 16 December (balance). Payment is made via F24 form at any Italian bank or post office, or online via the Agenzia delle Entrate portal.

TARI — Waste Collection Tax

TARI (Tassa Rifiuti) is the annual waste collection charge applied by each municipality. It is calculated based on the floor area of the property and the number of occupants registered at the address. For a holiday home typically occupied by 2 people, expect to pay €200–€600 per year depending on the municipality and property size.

Income Tax on Rental Income

If you rent out your Italian property — even for short holiday lets — you are liable to declare the rental income in Italy.

Cedolare Secca — a flat 21% tax on gross rental income from short-term lets (under 30 days). This replaces IRPEF and is the most common choice for holiday rental properties in Salento.
Standard IRPEF — progressive income tax (23–43%) on 95% of rental income. Less favourable than Cedolare Secca for most foreign owners.

Non-resident landlords must file an Italian tax return (Modello 730 or Modello Redditi PF) if they earn rental income from Italian property. You may also need to declare the income in your home country, though double-taxation treaties typically prevent you from being taxed twice.

Summary: Annual Tax Costs for a Typical Salento Holiday Home

IMU: €800–€2,500/year depending on cadastral value and municipality
TARI: €200–€600/year
Tax return filing (if renting): €300–€800 with an Italian accountant (commercialista)
Cedolare Secca on rental income: 21% of gross rents

Do I Need an Italian Accountant?

If you own Italian property and earn rental income, yes. An Italian commercialista (chartered accountant) will handle your annual tax return, IMU calculations, and F24 payments. Fees for non-resident property owners typically range from €400–€1,200 per year depending on complexity. We can refer you to English-speaking commercialisti in Lecce who regularly work with international clients.

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