273 Declaring second home in Italy to Italian tax authorities

I think you are correct, even if you do not rent out your property it has a tax value based on the assumption that you do and you have to register for tax. I seem to remember we had to do that the year after we bought, but as we are not renting it out there wasn't anything to pay. the company that organises our ICI dealt with the paperwork at the same time they did the ici (it saved us money)
Hope that helps

Susi

Mike, I think you might be confusing the rent issue with ICI. ICI (the Italian equivalent of Council tax) is based on the notional rental value of your house, were you to use it as a commercial asset, rather than live in it. This, in turn, is based on a percentage of the Catastale value (the value last declared to the land registry) Everyone has to pay ICI, not just, holiday home owners.

An accountant will be able to calculate your ICI for you and pay it, or you can find what percentage of the catastale value is due in your area and then pay it yourself. Why they don't simply bill you twice a year for the amount due is one of life's mysteries.

Regarding declaring your Italian home as your second home, well you should really, but many people don't. (after all, the reasoning goes, it is your only home in Italy)

We haven't declared our house as a second home as we didn't know there was any requirement to do so. We don't rent it out so there is no extra income issue.

One thing that is bothering me is the council tax issue. As far as I know we are not registered for council tax and we don't know how to go about doing it so can anyone offer any suggestions please. Also will there be any financial penalties for late registration ? (we bought the house at the end of september last year)

ICI or council tax seems to be a funny thing. Our house does not have a cadastral value against it (I think this is because it is still classed as rural) and so we had to guess how much ICI to pay.

There are no bills, everyone just knows to pay it at the right time. Apparently you pay a fine if you don't pay it but that this is very small (so we are told).

Here are some Q&A'a that we put together on ICI taxes that may clarify some aspects....

What is ICI Tax?
ICI pronounced Ichy stands for Imposta Comunale sugli Immobili and is the local taxed levied and spent by the Municipality or Comune in which the property is located.

How do I calculate ICI to be paid for my second home?
ICI for second homes is generally calculated applying a 0.7% ICI tax on notional rental value assigned to the property and multiplying by 105.
Example:
If the house’s notional rental value is 150 euro, then the ICI payable is 150x105x7/1000 = 110.25 euro

When do I pay ICI?
ICI is payable in two 50% instalments due December 20th and June 30th. You can get the payment forms with bank details from you local Comune. Payment is generally made through your bank or post office. Keep the stub for proof of payment.

Does each house co-owner have to pay ICI separately?
Yes. It is not possible for one owner (say husband) to cover 100% of ICI due. Two payments are necessary (from both husband and wife)

Can I pay in one instalment?
Yes. In fact this is much more convenient for non-residents and is payable on June 30th.

Does the Comune or tax authorities send me an ICI bill?
No. The system requires the tax payer to proactively pay their ICI taxes. Missed payments will automatically incur fines of up to 200% of the amount due.

If I buy a house during the year, how much ICI tax do I have to pay?
If the deed of sale goes through say September 17th, then you are liable for October, November and December or 3/12 of the yearly ICI due. The deed of sale on of before the 15th of the month means you have to add that month to the ICI due. In our example, September is excluded.

David
[url]www.ourtoscana.com[/url]

If this ICI thing is payable in december and june, is that a rigid requirement? What I mean is if you are not in italy at the time the payment becomes due can you pay it at some other time without a big hassle. At the moment it's only possible for me to be in Italy a couple of times a year as and when finances allow and extremely unlikely that I will be there in June. Does that mean I'll have any kind of problem if I go to the commune the next time I am there to ask for the form (probably around august or september)

I tried to do some research on this last night but most of the sites I found were in italian which I am not yet very profficient with. I did find one interesting site in English however and according to what it said there I will almost certainly be obliged to submit an italian tax return as well, and possibly may even have to pay some form of income tax.

I hope someone will come along here soon and tell me I am mistaken about this !!

If anyone wants to check this out for themselves the link is [url]www.delgiudice.clara.co.uk/guideframe2.htm[/url]

Further to David's useful formula, and after doing a bit of research on our own comune, I found that the issue is complicated further by a lower rate (.55% as opposed to .7%) and a lump-sum deduction (€129.11) for 'first home' owners.

(I used to think that our accountant was making out like a bandit by charging us €66 to calculate and pay our ICI, which amounts to €44, but now I'm not so sure!)

There's some more information, in English, over at:
[url]http://www.fiscooggi.it/reader/?MIval=cw_usr_view_articoloIng&articolo=10213&giornale=102072[/url]

It is rigid, but as a non resident you can pay in June. There are lots of people who will do this for you (for a fee) it is possible to work out the amount and produce the bill yourself but unless you know what your doing it is a lot of work.
I think in a previous post Anne gave instructions on how to do it.

Susi

Marc, your accountant is making out like a bandit! You can do the whole thing online in a minute. All you need to know is the catastale value. Check out [url]http://www.dossier.net/guida/calcola.htm[/url]

The best thing to do (to be sure) is to visit the Comune ICI office and ask them about the amount payable. They generally refer to 7/1000 (0.7%) but this can certainly vary. For those of you in arrears, they generally apply a fine that varies according to the "over due" duration and add a "legal" interest.
As for payment, I would tend to suggest internet banking as the best solution for those of you absent around the due dates.

David
[url]www.ourtoscana.com[/url]

you might find this useful as well

Notional Income Tax
There is also a tax to pay upon the notional rental value of your house, even if you do not actually rent it out. This is based on the official rendita catastrale (rateable value). It is normally small.

hope that helps

Susi

Many thanks to everyone who's pitched in on this one.

Marc - I don't think we are confusing the issue with the ICI. My instinct is that Susi is right - everyone with a second home in Italy needs to complete a tax return, whether they rent it out or not, whether they're resident or not. What I was really wondering was - without employing a commercialista - where can we go to get those tax returns? Anyone any experience?

Now let's talk ICI. Flyingveepixie - we now have the ICI more or less sorted out - a mere two years after buying! (This is probably because we've so far decided not to pay accountants to handle all this kind of thing, preferring, possibly stupidly, the DIY approach.)

We went to our local comune, taking with us our original house purchase documentation show the catastale value of the house. They registered us and worked out all the figures (including the rubbish tax) for us. You really shouldn't need to worry about all those complicated formulae! We explained we're based abroad, and please could we have the bill sent to us in Britain. But as David's really helpful post above points out, NOBODY gets bills, whether Italian or foreign. So we ended up paying late, and having to pay a small amount (about 15 euros) as a penalty, because the expected bill never materialised. Now, of course, we know that on or around the magic date of June 30 each year, we need to be badgering the comune to tell us how much we owe.

The other complication is of course that though your comune may be able to tell you what's due, you can't actually pay the bill there. And here in Bagni di Lucca (hi Susi!) it seems you can't just walk into the local post office to pay it - we now have to drive half an hour to Lucca or Castelnuovo to a special office to do that.

The only absolutely straightforward experience we have with bill-paying in Italy is with ENEL, the monopoly electricity supplier. You can do this online from anywhere in the world via a credit card. Wonderful!

I've always found it really strange that in a country so fascinated by matters internet, you still can't pay many of your household bills online. Has that been everyone else's experience - or are we just unlucky?!

Yes I think you are probably right about the tax return situation. I am quite horrified at the prospect of doing this as well as getting this troublesome ICI thing sorted out. My Italian is currrently beginners level so I would anticipate some fun and games in trying to do these things on my next trip. To be honest I'm beginning to wonder if it's all worth the hassle for a couple of little trips a year !

As a point of interest; no one comes to collect our rubbish, we have to put it in the back of the car and drive to the nearest bin so will we still have to pay rubbish collection tax or whatever it's called?

Yes you do! Remember (....puts on tree-hugger hat....) your rubbish isn't just disposed of when it leaves the confines of your home;-)

Flyingveepixie: "To be honest I'm beginning to wonder if it's all worth the hassle for a couple of little trips a year !"

Yes, yes and thrice yes - it really [I]is[/I] worth it, in my humble opinion. While Italian bureaucracy can be blood-boiling at times, you have somewhere to live in one of the most invigorating and beautiful places on earth.

My advice to you, if don't mind paying for a quiet life, would be to track down an English-speaking commercialista via e-mail who can sort it all out for you. Just go to [url]www.paginegialle.it[/url] (Italian yellow pages), type in "commercialista", your CAP code or address, then e-mail a few in your area. Many, I'm sure, would have good enough English to help you out.

Buona fortuna! :)

Yes I know it's worth it. I love my little house and my garden and all my nice trees, and it's so quiet and peaceful down our little lane. There is just so much associated hassle to deal with though and sometimes it gets a bit overwhelming. I'm not going to sell up or anything like that and I'm sure that once my language improves things will get a bit easier. I'll try your suggestion and see if I can find someone who can help a bit.

The property we have recently bought in Puglia isn't habitable, will we need to pay this tax, or do nothing? :cool: All we do is camp in it when we go there for now...and stick our rubbish in a bin on the main road. Should we go along to the tax office and find out?

Not sure if you have to pay ICI on an uninhabitable property. Worth checking this with your comune. But you do get a reduction on these taxes if you declare you're living in your house for six months or less.
As a guide, we pay around 220 euros a year for both ICI and the tassa rifiuti, rubbish tax. Not bad, compared to (say) British council tax. (By the way - everyone puts their rubbish in a big bin on the main road! You still need to cough up for big bin to be emptied...)
Should you do nothing? It's always an option, of course. I get the impression many of my Italian friends wouldn't obsess about the "rules" as much as I do. My usual conclusion, though, is that as "stranieri", foreigners, we could be an easy target for check-ups.
I'd still be interested to hear the experience of anyone who's opted not to pay for an accountant to do all these things.

John

I don't know any Italians that prepare their own ici but I am sure there are many. I think the reason for that is that generally their financial affairs are more complicated than ours. Most of the locals, friends and family own more than one property and a lot of them own property with others, so the ici has to be completed for every property and every person who owns it. We complicated our own because we wanted to avoid inheritance tax in years to come and therefore our son owns 50% of our Italian property, unfortunately it got complicated by Italian law as I wanted my husband to own the other half, he can't own property without me, it's a great idea to protect wives but it meant the remaining 50 % had to be divided between us. That means we have 3 ici bills to prepare each year. Fortunately my sister in law has them prepared for us free of charge, my brother in law belongs to a union and they provide the service for their members. As all Tax is self assessment in Italy most Italians use a comercialista anyway to complete their tax return for them each year so I suppose they get their ici done as part of the package?

Going back to you question about where to pay the ici, I am almost certain that the first year we paid (or rather my sister in law paid) our ici at the Banca Toscana in Bagni. I will check with her this weekend when I speak to her. It is a shame that the payments office at Ponte a Serraglio has closed, nobody seems to know why.

Susi

I have always paid ICI at the post office. In 10 years of owning a property here I have never had a problem. You can ask the postal clerk for a blank bolletino for ICI and then you just have to fill in the blanks.

Hi Cristina
So the post office knows how much you owe? You just go straight there and pay without having checked your bill with the comune first?
Thanks
Mike Johnson

What I do is calculate my ICI due first here [url]http://www.dossier.net/guida/calcola.htm[/url] then I fill in my own blank bolletino and pay at the post office. I have never gone to the comune to check how much I owe as all of the information is already in the program. You just need to check your contract for the catastale value.

Thank you Cristina. I went through the form and the result was something ridiculous - apparently I owe 115,000 euro, whereas what I paid last year (the figure I confirmed with my comune) is around 225 euro!!! I'm obviously doing something badly wrong. Going through the form you mention, you need a few more figures than just the catastale value...
1) I assumed that the "rendita (non rivalutata)" mentioned is the same as the catastale value?
2) And what on earth is the "aliquota ICI"?
3) How about "Mesi possesso primo semestre" - is this the actual number of months you're present in the house, or that you've owned the house, in the first half of the year? Or some other time frame?
4) "Percentuale di possesso" seems straightforward - do you own the property outright... I guess?
Any advice on why my fumbling efforts were so entertainingly off-beam would be welcome.
Mike Johnson

Sorry about the info on how many numbers you need. Last year the program was fully updated and had all of the information for each comune. Maybe closer to the due date it will have it again.

Yes, rendita is catastale. YOu will need to use the currency converter to calculate the euro amount instead of lire. Make sure you use the full stop (period) not a comma for decimals. My rendita is 560.36

The aliquota ICI is a percentage that the comune gives out. I got mine from the program when it was updated last June but you can also get this info from the manifesti that they put everywhere in June or from the comune website. Mine is 8.8.

The detrazione is also gotten from the comune. Mine is 103.29

Mesi posseso primo semestro is how many months in the first semester you owned the property. So from January to June. For me it was 6 months

Percentage of property. If you share the property with others you would have to put in your percentage. I own equally with mu husband so it is 50% for me.

Titolari coabitanti, we are two owners (50/50) so I put in 2.

I put in my comune and clicked the Calcola prima rata and it gave me 38.90 using 25.82 for the detraction [(103.29/2)/2] which is the full amount divided by the two owners then divided by the two payments. You can also make one full payment but each owner must make one for themselves. SO my husband and I each filled out a bolletino and paid 38.90 each in June and did the same again in December. DO NOT LOSE THESE RECEIPTS.

I have given you my numbers so you can see how the calculation works for you using mine if you do not have yours.

Many thanks Cristina.

I have had to go and lie down in a darkened room with an icepack on my head...

Mike

Just wanted to let you all know that since it is ICI time, I wrote a turtorial on how to do it using the program that I wrote about earlier. Pictures and all. Hope this helps and doesn't confuse too much.

[url]http://www.expatsinitaly.com/how/ici.htm[/url]

Cristina

June 30th is the scadenza date (ie last possible date of payment) if you wish to pay ICI in one installment. If you want to pay in 2 installments, the first (50%) known as 'acconto' has to be paid before June 30th and the second, known as 'saldo', between 1st - 20th December. We have on more than one occasion paid the full amount earlier in the year (even as early as Feb /Mar)when it was convenient for us to do so; as long as the amount is paid prior to the scadenza no one worries. Just make sure you complete the form correctly, filling in the appropriate year and that if you are paying in one installment you mark both the acconto and saldo boxes. The forms are available from Post Offices throughout the year and once paid obviously keep the stub as proof of payment. ICI is not as complicated as accountants would have you beleive and you can difinitely work it out yourslf. If in any doubt ask the ICI office of your commune and they will usually be glad to help. When we did after the house had been restored so some of the figures had changed, they even worked out the amount due and filled in the form for us! It took about 5 minutes and was free!
Good luck
Anne2

Thanks again everyone for your replies on this issue. Just shows how useful a forum like this can be.

Only one outstanding question from my original post. Has anyone set about the task of filling in their Italian tax return on their own, ie without a commercialista? If so, how did they get hold of one, and where did they return it to - I'm thinking here maybe of the Guardia di Finanzia?

Or maybe people in general don't bother about such things? ;)

Just to let everyone know what we've done to resolve our original question in this thread about Italian tax returns.

We got a commercialista (accountant) in the end. He advised us that if the rendita catastale of your house is less than 3000 euro (ours is about 180 euro), you are not legally obliged to fill in a tax return.

Your two main tax liabilities are the ICI (see all the previous posts in this thread and elsewhere on the board) and the TARSU (tassa rifuiti - rubbish tax), which falls due in September.

It turned out we'd only been paying the rubbish tax for the past two years, when we actually thought we'd been paying both (the fault of our not-terribly-helpful comune). So we have a bit of a bill for back tax.

One point about the rubbish tax is that it's partly worked out on the size of your house (in square metres). We declared the size given by the estate agent who originally sold the house. Which, surprise surprise, actually turned out to be more generous than in reality. So we've been paying about 30% more TARSU than we needed to for the past couple of years. Luckily, we can get it back. Eventually...

Final piece of advice might be not to ignore these taxes - they will chase you for them in time, and you do get charged interest for late payment.

John,

Everyone must pay ICI if it is due. The only way to know is to calculate it. Many people who are retired for example end up not paying because their catastale is low and the deduction for retirees is higher than the regular.

If you calculate it and it says you owe then you have to pay it. My catastale value is €560 but on our old place it was 290 and I had to pay it. I don't know where your person got the 3000 figure from but they are WRONG.

As for the garbage tax, this is a very risky one not to pay. The late fees on this can add up to thousands. When I was compliling my cost of living section someone wrote that they paid 1000 per year for garbage. I wrote back asking if this was for a business property as the amount was too high. She said no, they had not paid for 4 years and when they got the past due bill and fine it was almost 4000 euro so she just divided it by 4 for our questionnaire. I ended up finding out how much she would have had to pay if she had paid on time and it was 215 per year so they got hit with almost 400% late fees and fines.

Personally, I have yet to meet a commercialista that works with foreigners and is trustworthy.

Hi Will,

For the ICI, did they give you a new rrendita catastale amount (they should have)? If so, you can figure the whole amount out yourself to double check. I have a tutorial on how to calculate it on my site [url]http://www.expatsinitaly.com/how/ici.htm[/url] The amount due is based on the rendita amount and your comune. I have 160sm. and I pay around 250 for the year to give you an idea.

As for the garbage, it is based on square meters and the number of people in the property. If you are an infrequent visitor and (non) resident, you can get a discount. I have the forms somewhere on my computer and will find them and let you know.

I'm still confused about one thing. Is there a second house tax as stated in the first post, or is there only ICI? We pay ICI, rubbish tax, and something to the Comune for water (not sure if this is classified as a tax or not). Is it likely that we should be paying something more?

No, that is it.

Deep sigh of relief

[QUOTE=cristina]John,

Everyone must pay ICI if it is due. The only way to know is to calculate it. Many people who are retired for example end up not paying because their catastale is low and the deduction for retirees is higher than the regular.

If you calculate it and it says you owe then you have to pay it. My catastale value is €560 but on our old place it was 290 and I had to pay it. I don't know where your person got the 3000 figure from but they are WRONG.
[/QUOTE]

Just to track back a few posts to address this one from Cristina.

Cristina - my post mentioning the 3000 euro limit for the rendita catastale wasn't talking about ICI. It related to whether you had to fill in a tax return and pay a nominal amount of tax based on the rental value of your property, whether you were renting it out or not (if you go all the way back to post 1 in this thread, that's how it all started!)

So I don't think our accountant is being misleading.

Obviously, everyone needs to pay ICI and TARSU (rubbish tax).

Licciana asks whether she should be paying more in addition to ICI, rubbish tax and utilities. The answer is no, if his/her rendita catastale is lower than 3000 euro. (This, incidentally, seems a very generous limit - I think you'd have to have a very big house to exceed it!)

I don't wish to confuse anyone any more than we are already...

Mike Johnson

We paid too much rubbish tax for 2002 we are still waiting for the repayment!

Susi
ps there is a notice in the local bar about the ici for this year ie the rates have now been agreed.

[QUOTE=Susi]We paid too much rubbish tax for 2002 we are still waiting for the repayment!

Susi
ps there is a notice in the local bar about the ici for this year ie the rates have now been agreed.[/QUOTE]

Thanks Susi - we were there last week and saw the notices.

Mike

[QUOTE=cristina]

Personally, I have yet to meet a commercialista that works with foreigners and is trustworthy.[/QUOTE]

This is a really interesting one. Anyone got any experiences they'd like to share with the group? :)

Mike

[QUOTE=johnsm13]
Cristina - my post mentioning the 3000 euro limit for the rendita catastale wasn't talking about ICI. It related to whether you had to fill in a tax return and pay a nominal amount of tax based on the rental value of your property, whether you were renting it out or not (if you go all the way back to post 1 in this thread, that's how it all started!)
[/QUOTE]

Mike, could you elaborate on this tax return that you are speaking of. I don't know of this (which stands to reason as my catastale is less than the 3000 that you quote) and would like to be able to let others know about this in the event that they need to pay something else. So info on what this tax is called, which tax return, due dates, etc. or a place where I could look it up (knowing what it is called) would be great.

[QUOTE=cristina]Mike, could you elaborate on this tax return that you are speaking of. I don't know of this (which stands to reason as my catastale is less than the 3000 that you quote) and would like to be able to let others know about this in the event that they need to pay something else. So info on what this tax is called, which tax return, due dates, etc. or a place where I could look it up (knowing what it is called) would be great.[/QUOTE]

Try going to forum New Member, Natio. I have tried to clarify all if this there and still trying to get my head round it all.

Mike

I am surprised you have been paying the rubbish tax thinking it was the ici as they have only just sent out the bill for the 2003 rubbish tax. ps don't forget your mountain tax!!

Susi

We went with our estate agent to the local commune town hall, to the office which deals with the ICI. We took the deeds, Codice Fiscale numbers and passports. And spent the entire morning with some nice girls sorting out how much to pay. In the end we were told we had a 50% discount because the property is not regarded as habitable. A policeman will go to the property at some point to inspect it and make sure it's as we say.

Because we are not going to be here when payment is due, it will be sent to our neighbour who will pay the amount, which is not much, and we will re-imburse him.

Will

If you have a property in the Lucca area you have to pay mountain tax, don't ask me what it is for but there you go. Last year it was 17e, some of these things are samll but left unpaid can cause problems

Susi

[QUOTE=adriatica]we have a bookeeper not an accountant to do our ici plus anything else that we need ... his costs for ici are e10 twice a year which also includes his reminding us....

Very helpful post John. I've been away for a bit so only just catching up on everyone's replies.

Any idea what the Italian is for "book-keeper", as opposed to "commercialista"?

Our "commercialista" is charging us 100 euro a year to keep the taxman from the door. Five times what you're paying.

Did you find your person through local contacts, or some other way?

Thanks
Mike Johnson

[QUOTE=Susi]Mike

I am surprised you have been paying the rubbish tax thinking it was the ici as they have only just sent out the bill for the 2003 rubbish tax. ps don't forget your mountain tax!!

Susi[/QUOTE]

Hi Susi

Apologies for late reply - I've been away.

Mountain tax, now I really have heard it all!

Nobody's ever mentioned this one to us, including the really quite expensive accountant we've recently hired.

Does anyone else pay mountain tax?!!! And are there any other qualifiers for the list of Hilarious Taxes We Have Known?

Mike

There was a very short thread in March [1 post I think]

see

[url]http://italymag.co.uk/forums/showthread.php?t=134[/url]