Letting property as holiday rental

05/09/2012 - 05:20

We are just about finished with our house and are looking to let it out for holidays. We know we will have to pay tax and intend to declare any income in u.k. We have heard that Italian authorities are looking into holiday rental web sites to pursue owners for tax payment. If we are paying in U>K> will that be sufficient. Or will we be guilty until proven innocent!Any comments greatly appreciated.



IF, as you are presumably are, a non resident abiding in the UK and paying tax there also on any incomes deriving from your property in Italy,you shouldn't have problems.As far as any taxation in italy is concerned apart from I.M.U. on the house itself .You may have in order to conform to italian law provide passport/id document details of your guests ,these in theory must be written out on the appropriate forms available in any office stationary shops, and handed in to your local comune within 24 hours of guests arrival or,at worst before their departure.Should you be an italian resident being most of the time here then the whole story changes and with that taxation on your letting too.

You cannot technically let a prima casa - as it exists for you to live in.  If you are going to let a prima casa, you should retract your prima casa status (pay seconda casa IMU, and pay back taxes if necessary).  If the agenzia catch you you will be in big trouble.   This is less important for holiday homes, but the tax man now checks websites looking for people letting out houses without declaring them in ITaly. 

Thanks everyone. We are indeed resident in U.K.  I think as we are at the beginning of this adventure we can play it by the book, both here and in Italy and keep a very close eye on any changes in Italian law.   Thanks Sebastiano for the details on registering guests - will certainly do it, if the occasion ever arises! Fabbriche

I know someone who is resident and prima casa, rents it in Summer for 2-3 months while they live in a caravan on a  campsite...Austerity and all that, they need the money...............how's that work tax wise Brianm

He has a commercialista and pays any tax due!! "The Agenzia will find him', is this something left over from their Commi/Fascist Government in the 80s, like when you move and the police have to come to check your actually living there, and having to register any friends coming to stay.......mumma mia, this lot are still 30 years behind.....what happened to free Europe EH!  

Brianm...I dont think you explained that he has an accountant initially...hence Rams post. It is also useful to have one with other ex-pat clients so that they are used to dealing with their needs. As I understand it ours will also deal with the IMU payments....you pay for peace of mind. Austerity is hitting people here , but if it achieves a more regulated way of paying taxes I am not complaining. Long way to go I agree. Yes we were checked that we were living here when we bought 6 years ago, but really no problem, you choose to live in a different country to a degree you go with the flow or else complain about it all the time.....grumpy Brits drive me mad!!!. (not that I am suggesting any member on this forum is a grumpy Brit!)

is only comparable to HM Inspector finding him.  The Italian tax people have now got computers that are linked!  So, if you register a contract, they know you're getting paid and should declare it, which also links to your prima casa status - so not so dificult to work out if you're letting a prima casa.   Compared to HM Govt you cant realy complain about the AdE.... 

Have you considered that you might pay a lower tax in Italy?  We are looking to let in Tuscany.  If we add the income from the property to our Australia tax return it takes the money into a much higher tax bracket than if we keep the money in Italy and pay Italian tax.  If you don't have a uk income to worry about then you are OK but if you pay income tax at home you may want to see if overall you might be better off with Italian taxes, we will be.

Dear Hallam Family, Am I correct in thinking you have the option of choosing to which country to pay your rental income taxes then? If you are resident UK can you choose to pay all taxes from an overseas property rented out in Italy in your home country or Italy? Does this work in reverse? If you rented out a UK property but were resident in Italy to which country should taxes on rental income be paid or is there an option?

In reply to by Penny

Thanks Penny, So if we let our home in the UK, but as Italian residents, we wouldn't pay any taxes to the UK? Or do we pay taxes to both countries and if so how are the proportions decided? I read somewhere of the Italian tax system charging a straight 15% or was it 20% tax on rental income but does this mean deductions of travel, maintenance, mortgage payments etc are not deductible in the way they are in the UK?

Remember that if you are an Italian resident you will have to pay IMU on the value of your UK home at the second home rate (0.76 %) too but you can apparently deduct the cost of your Council Tax paid in the UK so may end up owing nothing. I don't think that anyone knows yet how that will work in practice. You will owe the UK no tax, only in Italy will taxes be due. I believe there is some special Italian tax regime for renting property where you can't deduct your expenses but a fixed percentage of the income. You'd need to speak to an Italian accountant for more details on that one unless someone on here is paying tax in that way.