Penny's activity

It would work like this: 10,000 GBP rental income converted into EUR = 12,000 (guestimate) 21% due on EUR 12,000 = EUR 2,520 tax due in Italy Already paid tax in UK of GBP 1,000 (5,000 x 20% - guestimate) converted to EUR = 1,200 So tax due in Italy = EUR 2,520 - EUR 1,200 (paid in the UK) = EUR 1,320 That is a very simplistic example and the 21% deduction menioned above is an Italian tax regime you have to choose which does not permit you to offset expenses but taxes you at a lower rate. I don't know if it applies to foreign property or not. You really do need an Italian accountant to work out if there is a better scheme in Italy for you. The higher tax might not make it worth your while offsetting the expenses as different expenses will be allowed in Italy that might be less generous.

Shame we didn't know you then Ugo :-)

Stephen, a lot of the rules are Regional so will differ from area to area. Generally though you could rent as 'appartamento amobiliato per uso turistico' so long as it is not rented for more that 30 days or available for more than 6 months of the year (these are the rules in Marche). Even if the rules in your area are slightly different then the classification is the same. It requires no P.IVA nor any particular size, facilities etc. so long as you have less than 4 units. You can just put the income on your Italian tax return and you will pay IRPEF on it. You can choose a special scheme whereby you hand over 21% to the tax man, no more tax is due but you cannot offset any of the expenses of running the appartment. You would need advice to see if this is better for you. It sounds like the 'appartamento amobiliato per uso turistico' would apply to you and it is the simplest, least beurocratic way to do it that I have found. Usually you need to give a notification to the comune (details will vary) and keep statistics for the regional tourist board and complete the Polizia dello Stato tourist registration forms for each new guest. You can offset certain renovation costs against your Italian tax bill but there are procedures that need to be complied with and the offset will take place over 10 years so you might decide it's not worth it. Your geometra should know about the procedures and ask the accountant about whether it is worth it. I would say find a GOOD accountant - forget whether they speak English or not and then use a GOOD translator. A bit more expensive but, certainly in Marche and I imagine it is the same everywhere, there have been plenty of incompetent (or just dishonest) professionals who have got work just because they speak English! Better to have someone with a good reputation and pay for the translation.

We tried for several months to get a mortgage here in Italy and it was impossible. In my experience the banks are only lending to pensioners or those with an indeterminate full-time contract or public sector employees. I'm self-employed so no chance. I also rang some UK lenders who said they knew no UK lenders who were lending against Italian property. This was about 8-12 months ago. I can't imagine it's improved..... If you can, raise the money against your UK house.

It's happened in lots of places including Bordighera here in the North so it is not just a Southern phenomenom....

I think the 'unfairness' of IVIE if you want to call it that, is the way the Italian tax man has decided that people with houses in some countries can offset the cost of the community charge and others can't. In some countries the tax is based on the rateable value (or equivalent - at least this attempts to match the cadastral value) and other are based on the purchase price/current value. It should be the same rule applicable to all wherever the house is and it should at least have some attempt to replicate what you would pay if you owned a second home in Italy. That to my mind seems much fairer. In fact the UK basis for the tax does attempt to do this as it is base don the ratebale value and you cannot offset the community charge. This is identical to what the basis for IMU would be if had a second Italian home. There was a lot of talk when it was introduced that if taken to the European Court it waould not hold up as it is very much against the whole ethos of double taxation treaties etc....

Rickardo - why do you think that people don't want to pay their taxes??? I don't believe anyone has said that. I don't think I've ever met an Italian who only owns 1 house. All the ones I know own at least a pert of a another one due to the inheritance laws....... even if they themselves live in rented accommodation. Many people are stuck with 2 homes because they can't sell one (or both) of them due to the recession so it really isn't an indicator of wealth any more than owning 2 cars because you need them to separately get to work etc. Poetica, if you own a UK Ltd company then you must pay tax on your shareholding (no idea how this is valued) and it is called IVAFE. It was brought in alongside IVIE.

Hi Fillide, I will try to find the article again. There was 4% interest charged if you paid after the July deadline but before 20/08/2012 after which you had to pay the original 0.76% plus an extra 0.4% (but I will find the article to confirm the extra %age). Basically you only get away with 4% if you pay by 20/8/2012 is what it says here - http://www.investireoggi.it/fisco/ivie-pagamento-entro-il-20-agosto-con-maggiorazione/

Yes, it's an annual charge :-)

Sprostini I think your sums are wrong! If your rateable value (ie council tax band) is band E £88,000 to £122,000 as mine was and assuming you take the mid-point at £105,000 and multiply this by 0.76% you get £798 so a 40% fine would up this to £1117.20!