International tax law
International real estate investments
Property abroad involves the rules of several countries. We support you with buying, letting and selling and explain the tax consequences and ongoing obligations.
Service area International tax law
What matters to you
Property is generally taxed in the country where it is located. However, the owner’s country of residence may also tax the income or take it into account when calculating tax. In addition, there are taxes on acquisition, recurring wealth taxes and reporting obligations.
We support buyers from Germany, Austria and Switzerland purchasing in Italy, as well as Italian-resident individuals and companies investing abroad. We work together with notaries, banks and advisers in the country concerned.
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Buying property in Italy
On purchase, registration tax (imposta di registro) or VAT is payable depending on the seller and the type of property, together with mortgage and cadastral taxes. The amount depends, among other things, on whether the purchase is from a private individual or a developer and whether the main-residence relief (prima casa) can be claimed. This requires, among other things, that the buyer is or becomes resident in the municipality or works there.
Foreign buyers need an Italian tax code (codice fiscale). In South Tyrol, provincial rules must also be observed, such as restrictions on homes reserved for residents (convenzionamento), which can rule out use as a holiday home. We check these points with the notary before signing.
Ongoing taxation
In South Tyrol, IMI (municipal property tax) replaces the national IMU. The amount depends on the cadastral value, use and the municipality’s rates. Rental income is subject to income tax in Italy; private individuals can, under certain conditions, opt for the flat-rate substitute tax (cedolare secca).
Short-term letting to holiday guests brings further obligations, such as the local tourist tax, guest registration and, depending on the scale, questions of commercial activity. Owners not resident in Italy must declare their Italian rental income here and apply the double taxation treaty in their country of residence.
- IMI (municipal property tax)
- Income tax or cedolare secca on rents
- Tourist tax and guest registration for holiday rentals
- Tax returns in Italy and in the country of residence
Foreign property for Italian residents
Anyone who is tax resident in Italy and owns property abroad must report it in form RW. The tax on foreign property (IVIE) is due on it, against which comparable wealth taxes paid in the country where the property is located may in some cases be credited. Foreign rental income must also be declared in Italy, and tax paid abroad is taken into account under the rules of the treaty.
On a sale, a capital gain may be taxable in Italy, particularly if the property is sold within five years of acquisition. Here too, the interaction with taxation in the country where the property is located must be examined.
Privately or through a company?
Whether a property is acquired privately, jointly with family members or through a company has consequences for taxes on purchase, ongoing income, financing, sale and succession. A company can offer advantages where there are several properties or commercial letting, but it entails running costs and obligations of its own.
Inheritance tax must also be considered: Italy and the buyers’ home countries tax inheritances under different rules. We therefore look not only at the purchase but also at the later transfer.
Step by step
How we work together
Discuss your plans
You explain which property you want to acquire, how you intend to use it and how you plan to finance it.
Structure and costs
We calculate the taxes on acquisition, compare purchase options and review the tax consequences in both countries.
Support with the purchase
We coordinate the tax information and tax benefits claimed with the notary and support the preparation of the necessary documents.
Ongoing returns
Every year we handle the declaration of rental income, the calculation of IMI (municipal property tax) or IVIE and the reporting obligations.
Frequently asked questions
Answers on property purchases and ongoing obligations abroad.
Can I buy a holiday home in South Tyrol as a German citizen?
In principle yes, even as a non-resident. However, many flats in South Tyrol are subject to residents-only restrictions that rule out use as a holiday home. Have this checked before buying, ideally before signing a preliminary contract.
Do I also have to declare my holiday home in Italy in Germany?
The treatment depends on whether you use the property yourself or let it, and on where you are tax resident. We review the Italian obligations and coordinate the consequences in your country of residence with your adviser there. A blanket statement on the German filing obligation or the progression proviso would not be meaningful here.
What is IVIE?
IVIE is an Italian tax on certain properties held abroad. Whether it is due and which value applies depends, among other things, on the country where the property is located, its use and personal circumstances. We also check the credit for comparable foreign taxes.
Is it worth buying through a company?
That depends on how many properties you hold, whether you let them commercially and how succession is to be arranged. For a single owner-occupied home, a company is usually not worthwhile. We calculate the options for your situation.
How can we help you?
In the initial meeting, we clarify your request and discuss what support you need.