Buyer’s Q&A
Italian buyer buying a fractional share: IMU and inheritance position
Italian residents are taxed on worldwide income and assets, and a fractional share fits into that picture. How tax works depends on the country and the home's legal set-up, which our partner explains before you buy; we recommend specialist Italian advice.
The short answer: Italian tax residents face Italian taxation on worldwide income and assets. For an Italian buyer of an Italian fractional share (e.g. Tuscany or Lake Como), the position is familiar territory for Italian accountants, and local IMU on the property is typically shared between the co-owners through the annual fee. For an Italian buyer of a foreign fractional share (e.g. Mallorca or Côte d'Azur), a few Italian-side items apply — IVIE (foreign real-estate tax) or IVAFE (foreign financial assets tax), with tax treaties preventing double taxation. Generous Italian inheritance-tax allowances usually cover a share comfortably. Our partner explains the home's legal set-up before you buy, and an Italian cross-border tax adviser will tailor the reporting to you.
Full guide: Second-home tax by country: Spain, France, Italy, Portugal, Austria and Germany compared
Italian buyer of an Italian fractional share — the straightforward case
For an Italian tax resident buying an Italian fractional share (Lake Como, Tuscany, Sardinia), the Italian tax position is usually familiar territory:
- IMU is paid at the comune level on the property and shared between the co-owners through the annual fee (see Italian IMU explained)
- Any rental income and capital gains on disposal of the share are taxed under Italian rules
- Exactly how the share is reported on your Italian tax return depends on the home's legal set-up
An Italian accountant familiar with real-estate holdings will handle the reporting easily.
Italian buyer of a foreign fractional share — the cross-border case
For an Italian tax resident buying a foreign fractional share (Mallorca, Côte d'Azur, Aspen), three Italian-side items to know:
- IVIE (Imposta sul Valore degli Immobili all'Estero): Italian foreign real-estate tax, charged at 1.06% on the deemed value of foreign real estate held by Italian residents. The fractional share's underlying real-estate value (your proportional share) typically falls within this scope.
- IVAFE (Imposta sul Valore delle Attività Finanziarie Estere): Italian foreign financial-assets tax, charged at lower rates on foreign financial holdings. Whether the fractional share is classified as foreign real estate (IVIE) or foreign financial asset (IVAFE) matters and depends on the structure.
- Italian income tax on foreign-source income: any income from the share is subject to Italian income tax with treaty credits for foreign tax paid.
The IVIE / IVAFE classification
This is the technical point that matters for Italian buyers of foreign fractional shares. Italian tax law distinguishes:
- Foreign real estate → IVIE applies
- Foreign financial assets → IVAFE applies (different rates)
Which applies to a given share depends on the country and the home's legal set-up. An Italian cross-border tax adviser can confirm the classification for your situation.
Italian inheritance tax position
Italian inheritance tax applies to the share, whether the home is in Italy or abroad, at death. Direct-line heirs (spouse, children) benefit from substantial allowances (€1M per child currently), which usually covers a single fractional share comfortably for most family situations.
Resident vs non-domiciled Italian tax position
Italy's tax framework includes a non-domiciled regime for new Italian tax residents (similar in concept to the UK's historical non-dom rules, though structurally different). Qualifying new residents can pay a €100,000 flat annual tax on worldwide income for up to 15 years. For high-net-worth fractional buyers relocating to Italy, this regime can substantially reshape the IVIE / IVAFE picture in the buyer's favour.
What Italian buyers should ask
Four questions. For Italian property: what is the IMU rate, and how are rental income and the share itself taxed for me? For foreign property: is this share classified as IVIE-scope or IVAFE-scope for my situation? What treaty positions apply between Italy and the foreign property's country? Does the Italian non-domiciled regime apply to my circumstances?
Where to find European fractional inventory
Co-Ownership Property's European selection includes Italian and other European fractional inventory.
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