IMU property tax on second homes: things to know

The IMU property tax on second homes is a topic that frequently sparks discussion. When is it actually due? Are there situations where an exemption applies? Let’s clarify the rules and exceptions.

When purchasing a second home, many focus on the purchase price, notary fees, and potential renovation costs, often overlooking expense in property taxes. The most significant of these is the IMU (Municipal Property Tax), which applies to properties other than the primary residence.

Its amount varies depending on the rates set by each municipality, which can adjust percentages within the limits established by law. Payments are due by specific deadlines throughout the year, and missing them can result in penalties. For this reason, researching this local tax is essential before purchasing a second home, as it directly affects the overall cost of the investment

What is the IMU property tax?

The IMU is the tax that property owners are required to pay to the municipality where their residential asset is located. Introduced in 2012 to replace other local property taxes, it applies with different rules depending on whether the property is a primary or secondary home.

The primary residence is exempt from the IMU, provided it is used as the main residence, meaning the place where the owner resides or lives habitually. However, this exemption does not apply to luxury properties, specifically those classified under the cadastral categories A/1 (prestigious homes), A/8 (villas), and A/9 (castles and historical buildings). In such cases, the IMU property tax is always due.

For second homes, the IMU is always due, although in some cases, a reduction of up to 50% may apply. There is one exception: if the property is occupied unlawfully and the owner reports the situation to the authorities, the IMU is not due.

One important aspect that is often not taken into account is that when a property has to be renovated before moving in, it is considered a second home until the residence is officially transferred. As a result, the IMU will be applicable during the renovation period.

IMU property tax on second homes for rent

Buying a house to rent out is a popular choice, but when it comes to the IMU tax, doubts arise, particularly regarding who is responsible for the payment. Generally, the owner is liable for the tax, while the tenant is not required to pay, unless the rental agreement explicitly states that the IMU should be reimbursed along with the rent.

This matter was clarified by the Court of Cassation in ruling no. 6882 of March 8, 2019, which confirmed that such a clause is valid.

IMU property tax on second homes in free loan for use

A 50% discount on the IMU taxable base is available to those who grant a second home for free use to a child or parent (the so-called "first-degree degree relative in a direct line of descent"). This is an appealing benefit, though it is subject to a series of conditions that must be met.

First of all, the contract must be registered with the Italian Revenue Agency. Additionally, the property must not fall under luxury cadastral categories (A/1, A/8, and A/9) and must be used as the tenant's main residence. Furthermore, to qualify for the tax benefit, the owner must own only one additional property in Italy, besides their primary residence, and must reside and have habitual domicile in the same municipality where the property is being provided for free loan use.

IMU property tax on second homes rented at regulated rates

A reduction on the IMU for second homes can also apply to properties rented at regulated rates. These rental agreements are based on a specific contract type where the rent is linked to price bands set through territorial agreements between property owners and tenant associations.

The owner renting out the property at a regulated rate is entitled to a 25% tax discount, meaning only 75% of the IMU property tax will be due. However, it is essential for the lease contract to be properly registered. Additionally, some municipalities may require specific notifications or a copy of the registered contract, so it's always best to verify the local regulations in force.

IMU property tax on second homes unfit for habitation

If the second home is declared unfit for habitation, the owner is entitled to a 50% discount on the IMU  property tax for the entire period the property remains in this condition. To qualify for the reduction, the unfit status must be confirmed through an assessment conducted by a municipal technician, with the cost of this certification covered by the owner. Alternatively, a self-certification may be submitted.

If the house is in a state of severe degradation and classified as category F2, the IMU is fully waived. This tax is also not applicable if the property becomes uninhabitable due to natural disasters, such as earthquakes or floods; in these cases, a complete exemption is granted.

IMU property tax on unoccupied second homes

If a second home is unoccupied, the IMU must still be paid, even if there are no active utilities. This is because the lack of tenants is a decision made by the owner, not a result of any structural issues with the property.

A discount may be available in certain cases: if the house is uninhabitable, a 50% reduction can be applied. The same 50% reduction also applies to pensioners residing abroad, who own a single home in Italy that is neither rented out nor loaned, making it effectively uninhabited. This applies provided the pensioners are registered with AIRE (Register of Italians Resident Abroad) and have earned their pension through an international agreement with Italy.

IMU property tax on inherited properties

When a second home is inherited, the payment of the IMU tax is the responsibility of the heirs who officially take ownership of the property. If there are multiple heirs, the tax is divided according to their respective ownership shares. And if one of the heirs fails to pay their share, the responsibility remains with the individual, and the other heirs are not required to cover the debt.

If the surviving spouse resides in the inherited property, they gain the right to live there, and the house is considered the primary residence, which exempts it from the IMU (unless it is classified as a luxury property). This exemption extends to the other co-heirs, for example the children, even if they do not live in the house.

How to calculate the IMU property tax on second homes

The starting point to calculate the IMU on a second home is the property’s rateable value, which can be found on the Agenzia delle Entrate website. This value must be increased by 5%, then multiplied by the cadastral coefficient, which is set at 160 for residential properties. Finally, the result is multiplied by the IMU rate determined by the municipality where the property is located.

For example, if the rateable value of the property is €950 and the municipality has set the IMU rate at 0.9%, the IMU to be paid would be €1,436.4, calculated as follows:

• 5% increase: €950 x 5% = €997.50
• application of the cadastral coefficient: €997.50 x 160 = €159,600
• application of the IMU rate: €159,600 x 0.9% = €1,436.4

The IMU can be paid in two installments, with due dates on June 16 and December 16. Alternatively, it can be settled in a single payment by June 16.

How to pay the IMU property tax

Starting this year, the IMU will be paid through a digital platform managed by Italy’s Revenue Agency. This new system aims to simplify the process, ensuring payment traceability and allowing the transaction to be completed in just a few minutes.

The payment notice, previously left to homeowners to remember, will also be digitalized and sent via email or SMS before the deadline, helping to avoid any oversight.

**This article is intended solely to provide general information and cannot in any way replace the advice of a qualified professional.**