11563 Tax on rental income

I think there have been posts on this before, but I haven't been able to find them.

We are going to let out our flat when we go back to the UK. The flat belongs to my wife, who is resident in Italy and will be paying Italian tax on the rent. But as far as we know, she will have to pay tax on the whole amount - there are no allowances. My wife has no other income. Can anyone advise on what can be deducted: the letting agent fees, of course, and what else?

Category
Property Sales/Rental Advice

Submitted by Anonymous (not verified) on Fri, 01/30/2009 - 04:36

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Submitted by Anonymous (not verified) on Fri, 01/30/2009 - 13:19

The whole tax on rent issue is confused by what sort or rent you are going for.

The options are long term to a local who will take up residence in the property.
Long term non residential letting.
Short term holiday lets.

In theory income tax or IRPEF is payable on the declared rental of the property with a 15% allownace for costs (no documentation needed for the allowance). The big question in Italy is always what is declared!!

If you let longterm to somebody who is wanting to take residence in the property you will have to register the rental contract and declare the full rent requiring payment of tax on 85% of the income. Also if you allow somebody to take up official residence in your property I hope you know them well as they will be very difficult to get out of the property should they decide to stay on.

If your let is over one month but without residence you are still obliged to register the rental contract so tax will be paid on 85% of the figure of the contract. You could always make the figure less but understand that this will be the recognised rent should any dispute arise.

With regard to holiday lets there is no obligation to register the rental contract so who knows how much you are charging. You will therefore be required to pay tax on 85% of what you declare to the tax man. Problems only occur if you have public prices (displayed on a web site) or somebody needs a receipt. If you can get paid in cash all the better or as many do get paid in UK and declare the income in the UK using as many costs as possible to set against the income, strictly speaking not correct but difficult to prove otherwise.

Hope this helps!

Submitted by Anonymous (not verified) on Sat, 01/31/2009 - 06:49

that's very useful, thanks very much indeed.

Submitted by Anonymous (not verified) on Wed, 02/04/2009 - 14:30

and a follow-up question: any recommendations on contents insurance for a flat that going to be let out?

Submitted by Anonymous (not verified) on Thu, 02/05/2009 - 11:49

Youtr conversation and information , cleared my doubts .......... thank you very much

Submitted by Anonymous (not verified) on Thu, 02/05/2009 - 11:53

Hi Jeena,
we wish you to tell us more about you and your interest for Italy, if you have any.
Thanks for joining us and welcome to the ITALY Magazine Forums.

Submitted by Anonymous (not verified) on Fri, 02/20/2009 - 09:22

Hi everyone, if you are looking for the heads up when renting a property and residing in the UK you may find this blog helpful [url=http://www.propertyincalabria.blogspot.com]Calabria Property[/url] There are many varied posts on this and other subjects, very interesting to those who have property in Calabria. Hope it helps you Grandese.

Submitted by Anonymous (not verified) on Sat, 02/21/2009 - 03:01

As far as holiday lets go you should also bear in mind that anyone staying should have their documents photocopied and presented to the police as an antiterrorism measure. it is the landlords obligation to do this. Of course this also makes it easier for the Guardia di Finanza to check up on who was where and when .... If your guests are stopped and checked the carabineiri will/should then follow up to see if their place of residence has notified the authorities, so its worth bearing in mind. For a longer term let, if you let furnished up to a year on a transitory contract there are no problems in getting tenants out, so for most owners this is the best option than plumping for a renewable 4+4 year unfurnished contract.