Buon giorno.  We have recently

01/13/2017 - 11:05

Buon giorno.  We have recently purchased a property and a beginning to rent it.  www.casalecrete.com.  We have our own site as well as a listing on VRBO and Holiday Lettings plus one in Holland.Can anyone provide me with some basic info as to taxes?  Do  most people  pay taxes on the rental?  Not sure if it would be Italian tax VAT or U.S. We have a commercialista who says we must pay 23% on each rental.  That almost makes the prospect of renting not worthwhile with all the other expenses and fees associated with renting.  Any advise would be appreciated.  We are located in Ficulle, Umbria nearest town Fabro.  Grazie.



I would just advise you to do it the 'right way'.  A rental house for tourism needs to be registered with the local Comune, and you need to pay taxes locally.  In Italy there is now a group of people - let's call them the 'tourist police' that are employed by local authorities to check houses that they believe are rented for commercial reasons.  If they turn up on the doorstep of a rental house, they will ask to see the contract for rental to validate the owner, and the income.  If your property is not registered then both your rental guest and yourself could be fined. This has happened to a house in our village owned by English people. 

Oh my.  That is scary.   Do you know if this is the case if the money is deposited in my U.S. account. and in US dollars?  We are not residents of Italy.  Just wondering with the possibility of taxes and commission to agency or other expenses if it is worth it......  Grazie.

This does not apply if you are just a resident.  I believe that the Italian tax authorities will state that your asset i.e. the property -  is in Italy,  and therefore any income that you derive from it , even if it is paid in another currency in another country still has to be declared also locally. In the UK if you own a property overseas that you rent, and pay taxes locally - you still have to declare the income and tax that you have paid on your UK tax return.  However any additional tax you have to pay in the UK is the difference between the Italian tax (you state it would be 23%) and your country tax rate.  I don't know the tax rules for the US, but I don't believe you will have to pay tax twice -once in Italy and then again on the gross income in US. So if you are currently a US tax payer and would have had to declare this as income and be taxed on it, I don't believe that you will be that worse off if you pay taxes locally. PS Another note on my prevous post, the 'tourist police' visit our house in Italy once a year, and check out our identity to prove that we are the owners of the house - even when my husband is up a ladder painting the property !    

Hi Lisa,I am in the same boat as you are.  US citizen with a property in Italy that I will be renting out.  I have been handling everything by the seat of my pants--not really sure what I am doing nor who I have to pay for what.  I plan on reading the messages you get to see what type of advice is out there.  If I stumble upon anything I will be sure to pass it on.  Have a great night

If you rent out your own single property there is  no requirement to register at the comune and make it a 'struttura ricettiva'.  There is also no need for a contract unless you are renting for more than 30 days.   You should however make the denuncia to the police for your guests, and depending on your comune you may have to pay the tassa di soggiorno.The house is in Italy, land therefore the income is seen to be in Italy even if your clients pay in USD. - and you will need to file a tax return showing your income and pay tax accordingly.  

Thank you for your response.  As always, it is so nice when everyone shares their knowledge and experience.  I am curious about one thing.  If a home is rented and the owner is a US citizen and payments are made to a US bank account, how is that income reported in Italy?  In the US , we and the IRS receive a 1099 as the payments are considered income (if using a service such as airbnb) but I am not  what the Italian government would receive.  Thanks for any info you may have

As the house is in Italy, the income is Italian not American, so you even if you pay the tax in the US, using the double tax treaty you will still have to fill in and submitt a tax return in Italy and if necessary pay the difference. You will need a commercialista in all likelihood.