Quick answer
Beyond income tax, Italy charges residents several asset taxes in 2026: IVAFE at 0.2% a year on foreign financial assets, IVIE at 1.06% on foreign property, IMU of up to 1.14% on Italian second homes, 0.2% stamp duty on Italian investments, and inheritance tax of 4% to 8% above set allowances. VAT is 22%.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
Heavnn
Stay tax compliant, wherever you work
Answer a few questions and get a clear plan for your own situation.
Find my savings →You have income tax figured out, but Italy also taxes what you own, buy and pass on. After this guide you will know each of these taxes, the 2026 rates, who pays them and how to keep the bill down legally.
Italy specific taxes in 2026: the key figures
| Tax | Rate or rule for 2026 |
|---|---|
| IVAFE (foreign financial assets) | 0.2% a year of value; EUR 34.20 flat per foreign bank account; 0.4% in non-cooperative jurisdictions |
| IVIE (foreign real estate) | 1.06% a year of value; main home exempt unless luxury |
| Stamp duty on Italian investments | 0.2% a year; EUR 34.20 on accounts with average balance above EUR 5,000 |
| IMU (Italian property) | Standard 0.86%, up to 1.14% in many municipalities; main home exempt unless luxury |
| Property purchase tax | 9% registration tax; 2% for a first home (prima casa); or VAT 4%, 10% or 22% from builders |
| Inheritance and gift tax | 4% spouse and children above EUR 1 million each; 6% siblings above EUR 100,000; 6% or 8% others |
| VAT | 22% standard; 10%, 5% and 4% reduced |
| Financial transaction tax | 0.2% on Italian shares (0.1% on regulated markets) |
Is this guide for you?
Read on if you…
- are, or will become, Italian tax resident with savings, crypto or property abroad;
- own or plan to buy property in Italy;
- expect to inherit, give or receive assets with an Italian link.
Probably not your case if you…
- only need income tax rates. See tax landscape overview of Italy;
- run a company and want corporate taxes. Read corporate income taxes in Italy.
Which taxes hit your foreign assets?
Italy has no general wealth tax. Instead, it taxes specific assets, and residents with savings abroad feel it most.
IVAFE: the tax on foreign financial assets
IVAFE (imposta sul valore delle attività finanziarie all'estero) applies to foreign shares, funds, bonds, policies and accounts. The rate is 0.2% a year on the market value at 31 December, pro rata for days held. Foreign current and savings accounts pay a flat EUR 34.20 instead.
Since 2024, assets held in non-cooperative jurisdictions pay 0.4%. Crypto has its own 0.2% tax on the same logic; see cryptocurrency taxes in Italy.
IVIE: the tax on foreign property
IVIE (imposta sul valore degli immobili all'estero) is 1.06% a year of the property's value. Value means the cadastral value in EU and EEA countries, otherwise the purchase price or market value. A foreign main home is exempt, unless it is a luxury property. Tax under EUR 200 is not due.
Here's the catch: both taxes come with a reporting duty. You list every foreign asset in quadro RW of the Redditi PF return. Missing it costs 3% to 15% of the value per year, doubled for black-list countries.
Credits for foreign taxes
Already paying a wealth or property tax abroad on the same asset? You can deduct it from IVIE or IVAFE, up to the Italian amount.
How much does Italian property cost you each year?
IMU: the municipal property tax
IMU (imposta municipale propria) is the annual property tax. The base is the cadastral income, revalued by 5% and multiplied by 160 for homes. The standard rate is 0.86%, and municipalities can raise it to 1.06%, or 1.14% where they applied the old surcharge.
Your main home is exempt, unless it is in luxury categories A/1, A/8 or A/9, taxed at 0.5% with a EUR 200 allowance. You pay IMU in two instalments, by 16 June and 16 December.
Non-residents pay IMU on their Italian homes. Since 2015, retired Italians abroad got reductions; the rules changed several times.
Buying property
On a purchase from a private seller you pay registration tax of 9% on the cadastral value. A first home (prima casa) pays 2%, if you move your residence to that municipality within 18 months. Mortgage and cadastral taxes add EUR 50 each.
Buying from a builder triggers VAT instead: 4% for a first home, 10% for others, 22% for luxury homes. Fixed registration taxes of EUR 200 each apply.
Rental income can use the cedolare secca, a flat 21% tax instead of IRPEF, or 10% for regulated-rent contracts. Since 2024, the second short-term let in the same year pays 26%.
How are inheritance and gifts taxed in Italy?
Italy's inheritance and gift tax is moderate by European standards. Rates and allowances depend on the relationship.
| Beneficiary | Allowance per person | Rate above it |
|---|---|---|
| Spouse, children, parents | EUR 1,000,000 | 4% |
| Siblings | EUR 100,000 | 6% |
| Other relatives up to 4th degree, in-laws | None | 6% |
| Anyone else | None | 8% |
| Disabled beneficiaries | EUR 1,500,000 | Rate of the relationship |
Inherited property also pays mortgage and cadastral taxes of 2% and 1%, or EUR 200 each for a first home. Italian government bonds, PIR plans and life policies are exempt.
Since 2025, Legislative Decree 139/2024 introduced self-assessment: heirs calculate and pay the tax themselves.
Who is taxed? If the deceased was Italian resident, worldwide assets are taxed. If not, only assets in Italy. Residence of the heir does not matter.
What other taxes might you meet?
- VAT (IVA): 22% standard rate, 10% on many foods and restaurants, 5% and 4% on essentials. Freelancers under the forfettario do not charge it.
- Financial transaction tax: 0.2% on transfers of shares of Italian companies, 0.1% on regulated markets. Small-cap companies are exempt.
- Stamp duty on Italian investments: 0.2% a year on securities held with Italian banks; EUR 34.20 on accounts averaging over EUR 5,000.
- Car ownership tax (bollo auto): regional, based on engine power.
- Waste tax (TARI) and tourist tax (imposta di soggiorno): set locally.
- TV licence (canone RAI): EUR 90 a year, added to the electricity bill.
How can you legally pay less?
- Elect the flat tax for new residents if you are wealthy. It removes IVIE, IVAFE, RW reporting and inheritance tax on foreign assets; see tax incentives for expats and digital nomads in Italy.
- Keep foreign accounts lean. A current account pays a flat EUR 34.20, while invested assets pay 0.2% of value.
- Use a first-home purchase for the 2% rate, and respect the 18-month residence move.
- Use lifetime gifts within the EUR 1 million allowance per child, and keep records.
- Check the move-out timing. Becoming non-resident ends IVAFE and IVIE from your exit; see ceasing your tax residency in Italy.
For comparison, see specific taxes in Portugal and overview of specific taxes in Spain, where wealth tax still exists.
Example – Thomas, French remote engineer, resident in Florence since 2025
Thomas holds a EUR 300,000 ETF portfolio with a Luxembourg broker and EUR 20,000 in a French bank account. He still owns his Paris flat, cadastral value EUR 250,000, which he rents out. IVAFE: 0.2% of 300,000 = EUR 600, plus EUR 34.20 for the account. IVIE: 1.06% of 250,000 = EUR 2,650, reduced by the EUR 1,400 of French property tax. Total: about EUR 1,884 a year, plus correct RW reporting.
Thomas pays almost EUR 1,900 a year just for holding assets abroad. Yours could look similar.
Get a personalised review of your Italian asset taxes and RW reporting.
Find my savings →Common mistakes (and what they cost)
- Forgetting quadro RW. Penalties of 3% to 15% of the undeclared value per year, on top of the unpaid IVAFE or IVIE.
- Claiming the prima casa rate without moving. If you do not move residence within 18 months, the benefit is revoked with a 30% penalty.
- Ignoring IMU on an inherited flat. Late payment costs 25% of the tax, reduced with prompt ravvedimento.
- Leaving assets in a non-cooperative jurisdiction. IVAFE doubles to 0.4%, and RW penalties double too.
- Missing the inheritance return deadline. It is due within 12 months of death; late filing adds penalties from 120% of the tax.
Frequently asked questions
Does Italy have a wealth tax in 2026?
Not a general one. Italy taxes specific assets instead: IVAFE at 0.2% a year on foreign financial assets, IVIE at 1.06% on foreign property, stamp duty at 0.2% on Italian investments, and IMU on Italian property other than the main home. Together they work like a partial wealth tax for residents with savings abroad.
What is IVAFE in Italy?
IVAFE is a yearly tax of 0.2% on the value of financial assets held abroad by Italian residents: shares, funds, bonds and policies. Foreign bank accounts pay a flat EUR 34.20 per year. Assets in non-cooperative jurisdictions pay 0.4%. You calculate it in quadro RW of the Redditi PF return and pay it with income tax.
How much is inheritance tax in Italy?
Spouses, children and parents pay 4% on what they receive above EUR 1 million each. Siblings pay 6% above EUR 100,000. Other relatives pay 6% from the first euro, and unrelated heirs 8%. Property also pays mortgage and cadastral taxes. Italian government bonds and PIR plans are exempt from inheritance tax.
Do non-residents pay IMU in Italy?
Yes. IMU is due on any Italian property you own, whatever your residence, unless it is your main home in Italy. Non-residents therefore usually pay the full municipal rate, up to 1.14%. Payment is in two instalments, by 16 June and 16 December. Special relief for certain retired Italians abroad has changed several times.
What taxes do I pay when buying a house in Italy?
From a private seller, you pay 9% registration tax on the cadastral value, or 2% for a first home, plus EUR 50 each of mortgage and cadastral tax. From a builder, you pay VAT of 4%, 10% or 22% plus fixed taxes of EUR 200 each. Notary and agent fees come on top.
Does the flat tax for new residents cover IVAFE and IVIE?
Yes. People who elect the flat tax for new residents under article 24-bis TUIR are exempt from IVAFE and IVIE on foreign assets, and from RW reporting. Foreign assets are also outside inheritance and gift tax while the regime lasts. Italian assets remain fully taxable, including IMU on Italian property.
Related guides
- Cryptocurrency taxes in Italy: rates, reporting and the 0.2% tax
- Capital gains tax in Italy: shares, funds and property
- Tax incentives for expats and digital nomads in Italy
- Practical guide to ceasing your tax residency in Italy
- Specific taxes in Portugal
- Overview of specific taxes in Spain
- Tax landscape overview of Italy
- All country tax guides
Sources
- Agenzia delle Entrate – IVAFE, IVIE and inheritance tax
- Ministry of Economy and Finance – Dipartimento delle Finanze (IMU)
- Normattiva – Decree-Law 201/2011, Legislative Decree 346/1990 and Legislative Decree 139/2024
- Gazzetta Ufficiale – Budget Laws 2024 to 2026
- European Commission – VAT rates database
- PwC Worldwide Tax Summaries – Italy
This guide is general information, not personalised tax advice. See how we research and review.
Find out what your assets really cost you in Italy
Get a personalised check of IVAFE, IVIE, IMU and inheritance exposure from Heavnn.
Start with Heavnn →
