Good Morning!  Thank you for any

Michelle G Image
11/26/2018 - 12:02

Good Morning!  Thank you for any information you can provide.  I am a US resident with a second home in Italy-purchased in 2017.  I have 2 questions both regarding the Italian Capital Gains Tax if I were to sell this property in 2019.1)I see that if you own the property for 5 years you do not have to pay a CGT. Since I am a nonresident and this is my second home, I am assuming I would have to pay the CGT no matter what.  Even if I sold the home 10 years after purchase--Is that correct?2)When calculating the CGT, am I able to deduct the cost of revovations, and all expenses related to the property?  So if sale price is $300,000 would the CGT be ($300,000-purchase price-expenses associated with property) * 20% Thank you!!! 



You have a CGT liabilty for 5 years from the date of purchase of an existing property.  That CGT is calculated on the selling price, minus purchase price, notaio fees, agent fees etc and all invoices connected with the improvement of the property.  Obviously there must be a traceable paper trail to deduct expenses.So, if you bought for 100,000,  paid agent, notaio etc for 10.000, spent 10000 on repairs and then sold for 130.000 you would pay CGT on 10.000 profit which would be 2000 euros.  

Hi Modicasa, Thanks you for your reply.  I just wanted to verify about the 5 year rule.  Do you know if that is for everyone-even for a second home, rental property, non resident.  Or would being a second home, rental property, non resident disqualify you- and you have to pay the CGT no matter how long you hold on to the property.  Thanks again!