Brexit

The UK’s departure from the EU will have consequences for Brits with second homes in Italy, or for those are looking to buy?

The simply answer is NO: unlike other countries in the EU, as France, in Italy there will be no changes for Brits from 1st January 2021.

Taxation on property in Italy is the same for Italians, EU citizens and non-EU citizens. Same easy rules if you buy, maintain or want to sell your property in Italy, no matter your nationality.

Moreover, considering that tax to pay when you buy a re-sale property and to maintain a property (re-sale or newly built) are calculated on the Tax Value “Valore Catastale” that in Liguria is sensible less (60/70% less) than the Commercial Value, the taxes to pay to buy and to maintain a property along the Italian Riviera are so much less than the ones to be paid in other territories, such as in neighboring French Riviera.

Also Capital Gain is fair: only for holiday homes, if the owner sells prior to 5 years incurs a charge of 26% Capital Gain on the gain between the buying price and the selling price. And all costs eventually paid to improve the property can be calculated to reduce the CG. Primary residence pay NO Capital Gain. There are no Social Charges on properties in Italy.

To compare, in France a Brit owner will pay from 1st January 2021 a total of 36.2% of Capital Gain + Social Charges, with No CG only after 22 years of ownership and No Social Charges only after 30 years of ownership.

Another important point to be considered is the Flat Tax for wealthy foreigners: introduced in 2017 in order to attract foreign investors and foreign capitals, the new flat rate tax of 100,000 euro a year will apply to all worldwide income for foreigners who declare Italy to be their residency for tax purposes. An additional 25,000 euros per person would also be added to the tax rate of those who set up Italian residency for close family members. The flat tax is renewable every year for a maximum of 15 years.

For more information or to discuss any property requirement in Liguria, the Italian Riviera, please contact Matteo Scandolera