Cadastral income: what it is, how it is calculated

Cadastral income: what it is, how it is calculated and what it is used for Have you ever read a cadastral survey? Among the various items that appear in the different boxes, there is a figure expressed as a euro: “reddito catastale”. That number there is much more relevant than you might think in the real estate world. What is the cadastral income? The cadastral income is a tax value that is used for several purposes: calculate the Imu value of a property; calculate the value of inheritance or gift taxes, mortgage and cadastral taxes; calculate the tax heat, or the amount that affects taxes and duties. How to check the cadastral income? The cadastral income is determined by multiplying the consistency by the specific unit rate for the Municipality, census area and corresponding to the category and class. For real estate units belonging to the groups of categories D and E, the income is determined through direct estimation. As reported by the Revenue Agency website. First of all, the cadastral income is calculated taking into account two factors. The first is the consistency of the property whose income you want to check. This data can be expressed both in rooms and in square meters (example: A, b, c, d). The second factor that you need to know concerns the estimates of the municipality. But let’s see how it is calculated: Consistency of the property x appraisal rates = Cadastral income. The consistency of a property can be expressed in walkable square meters, also considering those of the main and indirect rooms. The estimated rates that are determined by the Revenue Agency Example: Type of property → A2 class surveyed area → 4 immovable → 3 rooms Estimate → 250 x 3 rooms = 750 To recover the cadastral income in a simple and immediate way, you can bypass the calculations by connecting to the internet, for example at the site https://www.rendita-catastale.it/: select whether the property for which you want to know the income belongs to a private individual or to a company; enter your tax code or VAT number; and the province in which the building is located. When is the cadastral income revalued? The cadastral income must be revalued to obtain the cadastral value. To reassess it, it must be multiplied by a coefficient, which varies only according to the category of the property. For example, for buildings belonging to groups A, C D the coefficient is 5%, for those of group B it is 40%. The value obtained must then be multiplied by another coefficient based on the type of property. This table that you can find on the website www.borsinoimmobiliare.it shows all the categories and their respective coefficients. So if we go back to the cadastral income we calculated earlier: 750 x 115 (first house) = € 86,250. But we must be careful: The value of the cadastral income does not coincide with the market value, because they are two different data. For example, The base rate of the IMU 2021 is equal to 8.6 per thousand, this can be revalued up to a maximum of 10.6 per thousand. At any time it is possible to check these values ​​through a free cadastral survey carried out on the BorsinoImmobiliare.it website or that of the Revenue Agency. It is also possible to go to the offices of the local agency or ask a technician for it. How to calculate the assumed cadastral income? The cadastral income can only be known if the properties or land are registered in the land registry. But if this condition does not occur, it is still possible to calculate a presumed cadastral income. Obviously it is calculated provisionally pending the definitive one. The calculation of this type, however, is best entrusted to a technician. The steps are as follows: Properties belonging to categories A, B, C The category is identified on the basis of the technical elements acquired through an external inspection; The class is the middle or higher in the case of even classes present in the census area; The surface is deduced from the aerial-photographic surveys; The consistency in compartments is obtained with the surface / average compartment surface ratio. The costs of the deed of sale also depend on the cadastral income, with the exception of the notary’s fee. In fact, the “price In fact, the” price “of the deed of sale depends precisely on the income. When buying from a private individual: VAT exempt registration tax 2% on the cadastral value fixed mortgage tax of 50 euros fixed cadastral tax of 50 euros

Italy: taxes on the sale of a house, a notary’s advice

Interview with the national advisor of the Italian Notary Board Valentina Rubertelli Contrary to popular belief, even the seller, and not just the buyer, is required to pay taxes in a real estate purchase deed. Valentina Rubertelli, National Notary Board Advisor, explains to Idealista/news which direct and indirect taxes affect the sale of a house In Italy. Even those who sell a property may be required to pay certain taxes, which are split between direct taxes (where the difference is the time elapsed between the purchase of the property and the resale) and indirect (where the discriminating factor is between the first and second house) Direct taxes on the sale of a home or house If you are not resident in Italy, because you reside in another country, you do not have to pay the personal income tax, known as Irpef, in Italy. You should pay this tax in your country of residence. “In the case of direct taxes, or personal income tax – explains Rubertelli – it is the time variable combined with the price variable that comes into play. The Irpef is always paid by the one who resells, at a higher price than the purchase price, his house before 5 years from the time he bought it: if he bought it at 100 and sells it at 200 before 5 years, he has a plus-value of 100 on which the state wants taxes. These can be paid in two different ways: When declaring income (then the personal income tax rate which from time to time is applied to this taxpayer according to his income bracket, will be applied to this capital gain of 100) In the hands of the notary using a mechanism similar to that of the dry coupon: that is to say by paying the notary (who acts as an intermediary with the Public Treasury) a flat rate of 26% to close the accounts with tax authorities (which is handy for those who know they have a normally higher personal tax rate). There are cases where one is exempt from paying personal income tax on the realized capital gain in the event of resale of an inheritance property in the event of resale of a house in which he has lived more than half the time (if I resell after 3 years of purchase, I must have lived there for at least 1 year and 6 months + 1 day). To prove this, the certificate of residence is sufficient, or in the case of domicile, even utility bills. in the event of resale of a house from a donation, he pays capital gains taxes only if more than 5 years have passed since the date of purchase by the donor. Indirect taxes on the sale of a house or accommodation In the case of indirect taxes, what makes the difference is having bought the house as a first house (thus having received the benefits) or as a second home. “Those who bought as their first home received benefits precisely according to the need to satisfy a primary need, which is to have a roof over their head. If they resell within 5 years, the state assumes they have basically “cheated” that is, they speculated. Then, he wants to recover this differential delta on what the early seller has saved (either 7% on the cadastral value or 6% on the price if VAT) and in addition he wants a penalty of 30% and late interest on the same differential. ” “However, if I show that the resale before 5 years is itself motivated by primary needs (for example, I have to move to another bigger house because I had children) then the state does not impose the forfeiture of benefits, as long as a new first house is bought back within one year of the resale of the previous one. In fact in this case it also gives me an incentive (tax credit): it allows to deduct the tax paid on the first purchase from the new tax (if registered) “. A little complicated but logical, right?

In Italy, the future is in small towns

The future is in small towns: where there is life, clean air, slowness, healthy food. The challenge of reconnecting the country to repopulate the villages The future of Italy lies in the small municipalities. It is in these characteristic villages where time seems to have stood still, we breathe clean air, the rhythms flow more slowly and food and wine promote a diet capable of enhancing the territories, that man must return. Rural life, lighter pace and a gaze still able to focus on faces. And maybe even know the names of the neighbors. Well-known architects Stefano Boeri and Massimiliano Fuksas both supported the need to encourage residential dispersal, a kind of ‘city escape’, in response to the Covid-19 pandemic. An “escape from the city” towards small towns, the countryside, places currently less populated. Open and uncontaminated spaces. But Francesco Tarantini, president of Legambiente Puglia, also reminds us of this. The environmental association which has just celebrated on June 2 “Loving Italy 2020”, the festival of small towns which this year – perhaps not surprisingly – focuses on an important issue for the development and future of villages Italians: let’s reconnect the country. Because without (re) connection, the dreams of repopulating these magnificent districts are much more difficult, because the comfort and services offered by cities and large urban centers are still lacking in many small municipalities. And these shortcomings, in a comprehensive assessment of how one’s environment and lifestyle have changed, could have a significant impact. “In small municipalities, there is more life than you can imagine, but these territories are constantly fighting against the abandonment of settlements – explains Francesco Tarantini, president of Legambiente Puglia -. An inherent law exists but the implementation of the decrees is delayed. We remind you that Law 158/2017 is aimed at centers of less than five thousand inhabitants and provides for accompanying measures including the extension of ultra-broadband, an education plan for rural areas, school services, redevelopment of buildings in a state of neglect, construction of power stations from renewable sources, promotion of short chain agribusiness, construction of accommodation facilities. Where is all this? In 2017, we celebrated the approval of the law to save villages after sixteen years of battles. When will we celebrate its implementation? “. For this reason, from Puglia, as well as in the rest of the country, Legambiente appealed to the Prime Minister, Giuseppe Conte, with a document signed by many mayors. The aim is for support measures to be put in place for small municipalities. “The pandemic – we read the appeal – has drawn everyone’s attention to the need to rethink the organization and use of territories and in this regard also the role of small municipalities in maintaining communities. To do this, a great deal of work to reconnect the country is necessary, by recomposing the original polycentrism and the harmonious model of urbanity. At the center of the infrastructure for restarting the economy, there must necessarily be rapid connection as a right of citizenship, which fills the void of the digital divide at certain times. Indeed even today more than 3,900 municipalities do not have no fast internet, 1200 municipalities do not receive a stable signal for mobile telephony and 5 million Italians do not receive television service properly. It is a prerequisite for the territories and communities to be the protagonists of the country’s rebirth”. Without disturbing architects Boeri and Fuksas, it is probably a dream shared by many that of living in less polluting, stressful and deceptive environments. In short, places on a human scale and for children, where to live without giving up all the services and comforts to which we are all used today. Because perhaps the future really lies in the small municipalities, which represent around 54% of the Italian territory. Territories of less than 5000 inhabitants focused on innovation and sustainability, local tourism, development and protection of the environment, gastronomic and oenological circuits, promotion of cultures and traditions. These are the ingredients that small municipalities aim to fight against depopulation and the reduction of essential services. And just take a tour of the splendid villages of the province of Foggia, such as Bovino, Orsara di Puglia, Faeto, Accadia, Deliceto, or in Calabria, Pietra Grande, Staletti, to name but a few, to understand that yes, the not too distant future could be here. And those who stayed in these places saw the future much sooner. Maybe always.

Investing in real estate in southern Italy

The Covid-19 has disrupted our lifestyle and especially work, with a strong impact also on the real estate sector. If until January those who wanted to invest in bricks were targeting the big cities, they are now looking with interest at a market that has remained marginal until now: southern Italy. There are many reasons. Here they are explained in brief. South work, the turning point What appeared to be a momentary phenomenon extends well beyond confinement: students and workers who have left major cities do not seem at all willing to return, at least until exams can be taken remotely and, above all, teleworking will be encouraged by companies. And as many have already announced that flexible working will continue for a long time, if not forever, the scenario becomes clear: the employee with a contract in Milan or Rome will be able to work from home in another region and travel to headquarters. only a few times a month. So why buy or rent a property where the prices are the highest? The cost of brick in comparison To buy a house in Milan or Rome, you have to take into account spending respectively 4 thousand and 3 thousand euros per square meter, while the rents are around 20 and 13 euros / m². In many southern cities, however, demand does not exceed 1000 euros per square meter and in the cheapest (Caltanissetta and Isernia) it does not even reach 750. Not only that: there are also municipalities that sell properties at symbolic figures or even paid by those who move to a small town with few inhabitants, as is the case in Molise where the active residence income initiative was launched. Excellent quality of food in the south, and inexpensive Especially when you look at food prices, the south is really down: the fish, vegetables, fruit, ice cream are delicious and cost about half as much compared to northern Italy. Life is cheap in the south Some highways, like the one connecting Naples to the bottom of Calabria, are free, and even the prices charged by craftsmen, or real estate rentals, are much cheaper than in the north.

Covid-19 and real estate prices in Italy and Europe – S&P report

The S&P report sees Italy among the hardest hit countries, but the decline is contained. What does this mean for the European real estate market? According to S&P, the drop in transactions during the lockdown will only show its effects in a few months. In the meantime, the buying and selling activities will also be weak due to the drop in employment, and therefore in disposable income, due to the pandemic, which will cause the postponement of many purchase decisions. However, analysts do not expect a collapse in real estate prices in Europe: it will be prevented by the income support measures put in place by governments, which will ensure that activities can limit the number of layoffs. The impact of coronavirus on European real estate markets will be that of a drop in house prices. However, according to S&P Global, by 2022 everything should return to pre-pandemic levels thanks to economic policies. Long-term recession According to the report “Government Job Support Will Stem European Housing Market Price Falls”, Europe will face the deepest long-term recession this year. But in the same way, the recovery expected for 2021, albeit more gradual, will be faster than what normally follows a recession in an economic cycle. It is also much stronger than the last recovery, following the 2008 financial crisis. For the past two and a half months we have been forced to stay at home and many Italians have also had to fall back on smart work, with all the pros and cons of the case. More flexible hours and the convenience of not having to travel to work, of course, but also the need to carve out a corner where you can work even in very small apartments that weren’t equipped for such situation. Our relationship with housing has therefore changed, but can the same be said for the search for new housing? According to Carlo Giordano, CEO of Immobiliare.it, in fact not. In an interview with Il Foglio, Giordano explained how the traffic data on the platform is clear: Italians dream of terraces and spacious apartments, but often fall back on the two-room apartment to find more affordable prices. More than the pandemic, the market will therefore undergo further changes due to economic uncertainty: those who have had an activity that had to remain closed for a long time often did not want to take out a mortgage and, in any case, the banks may not have given it to him. In short, people will not leave the city, as was assumed at the start of the emergency, but many properties are intended to remain unsold. The solutions proposed by Giordano are different. First of all, an appeal to the State to guarantee 100% mortgages, in particular favoring young couples looking for permanent accommodation. In this way, there would be new buyers, the state would win on taxes and the banks would feel more protected and could open new positions. In addition, it is time to review the offer. It makes no sense to build certified green buildings, very few are those who can afford it. It is better to focus on the energy efficiency of those that already exist, or on the reconstruction of buildings that are no longer usable, such as apartment buildings, but also schools and other public services. It would also avoid consuming new urban land. Finally, it would be a good idea to transform four-room apartments and oversized apartments into two or three-room apartments, solutions much more in demand by families today, who do not plan to have a lot of children.  

Italy: main innovations of the 2019 tax decree for real estate

Let’s see what are the main innovations of the 2019 tax decree for real estate Confirmation of the coupon option Canceled the rule that provides penalties for those who forget to confirm the option for the coupon (cedolare secca) on rents at the time of the extension of the contract. Short rental identification code Each structure for short-term rental must have an identification code which must be used for “any communication regarding the provision and promotion of services to users”. The same code should also be used by internet portal managers and real estate agents. Penalties from 500 to 5,000 euros for those who do not comply. Tenant data communication with income The data on the tenants of the short rent communicated by the owners to the state police will in turn be communicated (anonymously and aggregated by structure) to the Revenue Agency (IRS) to verify the payment of taxes. Unclaimed taxes For contracts stipulated as of January 1, 2020, the growth decree provides for the possibility of not paying taxes on unclaimed fees if the absence of collection is evidenced by a “notice of eviction for non-payment or obligation to pay”. Expiration of the IMU declaration The deadline for the IMU declaration now set for 30 June is extended to 31 December of the year following the year to which the data to be reported relate. IMU rural instrumental buildings The IMU on instrumental buildings becomes deductible from the company’s income from 2023. Until then, the percentage of deduction will increase: 50% for IMU 2019, 60% for 2020 and 2021 and 70% in 2022. Ecobonus at a reduced price on the invoice A taxpayer who is doing work to improve the energy efficiency of his building or to reduce the seismic risk has the option of receiving an advance from the supplier who performed the intervention instead of a deduction, in the form of a reduction of the amount due. The supplier can recover the contribution in the form of a tax credit or can in turn transfer it to its suppliers of goods and services.  

Italy: compatibility of holiday rental with condominium regulations

In Italy there are many tourist resorts. Even cities like Milan, Naples, Turin enjoy a remarkable tourist attendance. Real estate is not expensive, often less than 1500 € per square meter. On the other hand, demand for short-term rental in almost all the many tourist locations is growing. This is why more and more foreign Italian investors are buying apartments for short-term rentals, or holiday rentals. The compatibility of the holiday rental with the condominium regulations At the same time, there is also an exponential growth in neighborhood complaints from occupants of the same co-ownership to those who deal with this type of entrepreneurial activity. The rules: where are we in Italy? Despite the many legal interventions in this area, in our country, a precise orientation on the nature of b & b and short-term rental activities still seems to be lacking. As explained in a recent article by Sole 24 Ore, it is generally necessary to prohibit these activities in the stipulated co-ownership regulations or regulations; it can also be expressed by a resolution adopted by the co-owners with the consent of all the participants. The same procedure must also concern the resolution of the clause to be included in the current regulations prohibiting the co-ownership operation of this type of activity. In all cases, these are clauses that must be written clearly and explicitly. When, for example, the regulations prohibit the use of the property in question for activities other than residential, the possibility of proposing temporary rentals within the apartment is excluded. Anyone who wishes to use their property for temporary rental purposes should not rely solely on regional laws for the exercise of activities of bed and breakfast or vacation rental: he should   first take into consideration those relating to contractual regulations or conventional condominium by-laws, which override regional legislation.

2019 house improvement reductions in Italy

Higher rates confirmed for retrofit deductions and energy savings. Tax relief also for furniture and new gardens. One more year to renovate the house with a maxi-reduction of 50%. From construction works to equipment, the finance law has postponed all deadlines to 12 months. Slip also for the ecobonus, for which it is possible to implement energy saving measures by recovering 65% on the Irpef. Renovations. The 50% rate provided for the deduction for exceptional maintenance and renovation work will therefore apply to all expenses by the end of the year. Maximum ceiling for each apartment confirmed at 96,000 euros. The deduction allowed even if the payer is the cohabiting partner of the family member, and in the case of de facto couples. Indispensable to use the dedicated bank on which you must expressly indicate the tax code of the person who will use the deduction. In fact, banks have the obligation to communicate these data to the tax authorities in order to refine the precompiled declaration, so that the creation of text only contains these data. We must therefore pay the utmost attention to the establishment of the transfer. In case of energy saving interventions paid with the transfer for renovations such as change of lighting, purchase of air conditioners or gas boilers, photovoltaic panels, pellet stoves, you must also send a communication to ENEA on the site dedicated to renovations, within 90 days of completion of the work. The mobile bonus. Who renovated the house last year or is about to do it now can also count on furniture and appliances. In this case, the maximum cost is 10,000 euros and must take into account what you have already spent last year for the same apartment. Compulsory payment with traceable instruments (bank transfer, credit card, debit card), but it is not necessary to use a bank transfer dedicated to restructuring. Anyone who buys appliances (oven, refrigerator, washing machine, hotplates) must send the communication to Enea within 90 days of purchase. The green bonus. For those who decide to refurbish the walk or terrace, the specific facilitation is in effect, namely the deduction of 36% on a maximum expenditure of 5,000 euros. Even those who have the “green thumb” will have to turn to a gardener, because facilitation is not allowed for DIY work, for example the simple purchase of plants and planters, but only for the renovation of green places to create new gardens, install irrigation systems. In these cases too, payment is required with traceable instruments but not with a dedicated bank transfer. Ecobonus. Another 12 months to take advantage of 65% or 50% reduction rates for energy saving interventions The higher rate applies to jobs that provide higher savings, such as insulation, the replacement of heating systems by condensing boilers equipped with thermo-valves, solar panels. 50% bonus instead for new appliances, sun protection, biomass boilers. In this case also, for the obligatory payments, the transfer dedicated to the ecobonus and the deduction inserted directly in the pre-filled declaration. The condominium works. With the same rules are also confirmed the tax breaks condominium works, including the green premium. In this case, however, all the bureaucracy is charged to the administrator.

House purchase by auction: the first home bonus is valid

The application for tax relief for the purchase of the first house must be made before the transfer order. Buying an auction house can be a big plus. With the online auction portal, you can stay informed of the progress of judicial sales of all assets attached or for which bankruptcy proceedings are ongoing. Research may be limited to houses located in a specific geographic area and within specific price limits. You should almost never participate in the first sale because, in the event that the auction is deserted (that is, in the absence of bidders), at subsequent auctions, the judge may order a reduction of 25%. This is certainly a speculative attitude that is in the end very often the goal of those who buy at auction. In addition to the normal rebate in relation to the market price, home buyers can also benefit from the first housing bonus, ie the tax advantage reserved for those who buy real estate – the first real estate – in the municipality where they have their home or transfer it 18 months after the purchase. A recent decision of the Sondrio Provincial Tax Commission confirmed this. The pronunciation has the important merit of establishing what you need to do to use the first home bonus on the auction purchases. Let’s see more in detail what was said. We do not need to repeat, in this article, all aspects of tax relief for the first home, including the IMU exemption, the property tax. Just remember that it applies to those who have never benefited from the same bonus before and have no other property in the municipality where the house to buy is located. You can get the bonus if you transfer your home within a maximum of 18 months from the purchase in the municipality where the house is located. The first home bonus Does the first home bonus apply to real estate purchases at court auctions? When claiming the first home home bonus for forensic sales? The first home bonus The bonus brings a significant advantage in terms of paying taxes. If the seller is an individual or a company that sells VAT-free, you pay: Proportional register fee of 2% (instead of 9%); Fixed mortgage tax of 50 euros; Fixed register tax of 50 euros. If the seller is a company, with a sale subject to VAT (typical of the manufacturer), you pay: VAT reduced to 4% (instead of 10% VAT for buildings A / 1, A / 8 and A / 9 is 22%); Fixed registration fee of 200 euros; Fixed mortgage tax of 200 euros; Fixed register tax of 200 euros. Does the first home bonus apply to real estate purchases at court auctions? The first house bonus also applies to those who buy a property at auction at the courts. But beware: in order to benefit from the subsidy, it is necessary that the application to benefit from the benefit is presented before registration of the transfer decree with the relevant tax agency. Later, it is impossible to get the bonus. This is the clarification provided by the Sondrio CTP. When to apply for the first house bonus for judicial sales? The judge pointed out that auctions can certainly benefit from the first housing subsidy if the taxpayer declares that he wants to make use of the facilitation at the same time as he asks to be auctioned. This declaration can therefore also be inserted later, with a supplementary act, even after the publication of the decree of transfer, but with the insurmountable delay of the moment of registration of this decree with the Revenue Agency. On this point, the Supreme Court also agrees that it has adopted the same interpretation in the past. Therefore, if the application for use of the bonus is submitted after the registration of the transfer decree, there is no longer any possibility of obtaining the tax benefit.

Real-estate investment tax savings for Italian citizens residing abroad

1) UP-FRONT TAX SAVINGS UPON THE PURCHASE OF A PROPERTY IN ITALY 1a) Requirements These tax savings apply to anyone (national or foreigner) who buys a “Prima Casa” in Italy. The tax savings amount is significant and pegged at 7% (i.e., 2% instead of the 9% ordinary tax rate) of the cadastral value of the property, not the transaction price. Although there can be substantial variations on the difference between the cadastral and commercial value of Italian properties, cadastral values usually fall in the 40%-60% range of the commercial values (source: OMI – Osservatorio Mercato Immobiliare, Italian Ministry of Economy and Finance). Please note that the normal conditions for a property to classify as a “Prima Casa” and thus for the buyer to be advantaged of these up-front tax savings are that: 1) he/she does not already own any other residential property in the same Italian municipality; 2) he/she did not already benefit from “Prima Casa” relief when purchasing another residential property in Italy; and that 3) the property becomes his/her “Main Residence”, which implies that the buyer has to transfer his/her residence to the municipality where the property is situated within 18 months from the date of purchase. For Italian nationals officially residing abroad and registered with AIRE (“Anagrafe dei Cittadini Italiani Residenti all’Estero”), however, although the first two conditions still apply, the third condition does not apply, which means that they are NOT required to move their residency to the property’s municipality to qualify for a “Prima Casa” tax relief. Finally, the “Prima Casa” tax savings apply to any Italian residential property except for those coded as A/1, A/8, and A/9 on the cadastral registry. Please note that these properties only constitute about 0.2% of the entire Italian residential assets (source: OMI’s Cadastral statistics, 2017). 1b) Upfront tax savings – Example For a property with a market value of e.g., Euro 1,000,000 and a corresponding cadastral value of Euro 500,000, the law would allow for an up-front tax saving of Euro 35,000 (i.e., 7% of the cadastral value). 2) ADDITIONAL ANNUAL TAX BENEFITS FOR ITALIANS RESIDING ABROAD 2a) Requirements Section 9 –bis of Law Decree 47/2014, effective from 2015, has introduced further tax benefits to Italian nationals residing abroad who purchase a “Prima Casa” in Italy.  These benefits include a full exemption from the IMU (“Imposta Municipale Propria”) and a 67% tax reduction on the TARI/TASI (“Other municipal properties taxes”). The law states that these further benefits apply to “one property unit only, owned by Italian nationals registered with AIRE, who are retired in their states of residence, providing that such property is not rented or given in use to third parties”. This means that, beyond the conditions that define a “Prima Casa” stated above, two additional requirements must be met to benefit from further tax relief: 1) the owner must receive a pension from his/her country of residence (this condition leaves out Italians who, having moved abroad after retiring, receive an Italian pension); and 2) the property must not be rented out or given in use to third parties. Please note that a potential Italian resident living abroad can therefore benefit with two options: a) buying the property as a “Prima Casa”, benefitting from the municipal tax savings (i.e., IMU, TARI/TASI) but without being able to rent; or b) buying the property as a “Prima Casa”, paying the full IMU/TARI/TASI taxes, but with the option of renting it out. Please note, however, rental taxes amount to 21%. 2b) Upfront and annual tax savings – Example (cont’d) For a property with a market value of e.g., Euro 1,000,000 and a corresponding cadastral value of Euro 500,000, the law would allow for an up-front tax saving of Euro 35,000 (i.e., 7% of the cadastral value) and annual municipal property tax savings of about Euro 5,000 in IMU tax (i.e., full exemption) and Euro 3,500 in TARI-TASI tax (i.e., 67% exemption). Based on these estimates, the present value of the up-front savings of Euro 35,000 and annual tax savings of Euro 8,500 would amount to about Euro 74,000 (i.e., 7.4% of the original investment) over the first 5 years of ownership of the property, Euro 107,500 (i.e., 10.75%) over the first 10 years, Euro 136,500 (i.e., 13.65%) over the first 15 years, and Euro 161,500 (i.e., 16.15%) over the first 20 years of ownership. Values discounted based on the 3% Italian government long-term bond yields. We are experts in Italian real estate law and our practice is happy to provide and determine each individual’s qualification for the legislated tax benefits and best assure each client captures the maximum tax benefits under the law.