Overview of Italian Property Terms
Italian Law states that all property must have a legal or cadastral value also known
as Valore Catastale. This is a statutory value placed on the property by the Government
calculated as a multiple of the legal rental yield. The Cadastral Value is often
considerably less than the actual market value of the property.
Italian Individual Income Tax (IRE)
Income tax or IRE is applicable to both residents and non-residents. Non-residents
are subject to IRE on income generated from Italian sources only. IRE is payable
on income from land and buildings.
Unoccupied building can incur a deemed imputed income based on the cadastral rent
amount - Rendita Catastale - is determined by the Cadastral Value of the property.
The taxable basis for taxing rental income is the higher between the imputed cadastral
income and the actual net rental income. A flat tax rate of 15% applies on gross
rents after allowable deductions.
Italian income tax rates vary from 23% and 43%.