Tax Residency Rules in Italy

A practical guide for expats and anyone planning to buy property

Buying a home in Italy — whether it’s a rustic trullo in Puglia, a seaside apartment in Sicily, or a pied-à-terre elsewhere — is an exciting step for expats, digital nomads, and young professionals. But owning property or relocating to Italy raises important questions about tax residency. Understanding the Italian tax residency rules is essential to avoid unexpected tax liabilities and to benefit from the incentives available under Italian law or international double-tax treaties.

This guide explains how tax residency works in Italy, with practical advice for individuals and families who want to invest or move to the country.

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What is tax residency in Italy?

Tax residency determines whether Italy may tax only income produced in Italy, or your worldwide income. For foreigners who buy property or spend significant time in Italy, knowing whether you will be treated as a tax resident is crucial for planning obligations correctly. Owning a property can influence residency status, especially when combined with long stays in the country.

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Legal criteria

Tax residency is defined by Article 2 of the Italian Income Tax Code (TUIR).
A person is considered an Italian tax resident if, for more than half of the tax year (183 days, or 184 in leap years), even if not consecutive, they meet at least one of the following conditions:

• They are registered as a resident at the local Registry Office (Anagrafe).

• They have their domicile in Italy (the centre of personal and family life).

• They have their habitual residence in Italy.

• They are physically present in Italy.

These conditions are alternative, not cumulative: meeting even one is enough for the person to be considered an Italian tax resident.

Recent legislative updates introduced the following clarifications:

• Physical presence is now an autonomous criterion for residency.

• Domicile is interpreted mainly as the centre of personal and family ties (not business ties).

• Registration at the Anagrafe creates only a rebuttable presumption of residency (you may prove otherwise).

• Fractions of a day spent in Italy count toward the 183-day threshold.

Tax residency applies to the entire tax year (January–December). No partial-year residency exists, except in special cases governed by double-tax treaties — notably with Germany and Switzerland.

When a person could be considered resident in both Italy and another country, the Double Tax Treaty (DTT) decides in which country they are primarily resident.

Example:
A UK digital nomad buys a €150,000 apartment in Sicily and spends 200 days a year working remotely from Italy. They will likely be considered an Italian tax resident and must declare their worldwide income. The UK–Italy DTT may reduce or eliminate double taxation.

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Tax obligations: residents vs. non-residents

Tax residency determines what income must be declared in Italy:

Tax residents

Must declare and pay taxes on worldwide income, including:

• Employment income (progressive rates 23–43%)

• Investment income such as dividends, interest, and capital gains (26%)

Non-residents

Pay taxes only on Italian-source income, such as rental income, which can be taxed under:

• Cedolare secca (a flat tax), or

• Progressive taxation, depending on the owner’s choice.

Example:
A UK expat owns a holiday home in Puglia but lives in London. They rent it out for €12,000 per year. As a non-resident, they pay 21% cedolare secca (€2,520) and do not declare UK income in Italy.

For more detailed guidance on property taxation, see the article “Italian Property Taxes: IMU, TASI and More.”

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Does owning property make you an Italian tax resident?

Owning a home in Italy does not automatically make you a tax resident, but it can influence your status when combined with your actual presence and family ties. Key scenarios include:

• Primary residence (“prima casa”)
  Buying a home as your main residence and registering at that address within 18 months triggers first-home tax benefits and signals to the authorities that Italy is your primary base.

• Property rented out
  If you own property but live abroad and rent it out, you generally remain a non-resident and pay taxes only on Italian income.

• Frequent stays
  Spending more than 183 days in Italy — even without registering — can make you a tax resident.

Example:
A northern European family buys a €250,000 villa in Puglia as their primary residence, registers with the Anagrafe, and spends most of the year in Italy. They become Italian tax residents, gain first-home benefits, but must declare foreign income and assets.

See also the article “Italian Property Taxes: IMU, TASI and More” for an overview of tax benefits for primary residences.

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Double Tax Treaties (DTTs)

Italy has treaties with more than 90 countries (including the UK, USA, and all EU states) to prevent double taxation.

How DTTs work

• Some treaties allocate taxing rights to one country only.

• More commonly, Italy taxes the income but grants a foreign tax credit for taxes already paid abroad.

Benefits

• Reduced withholding tax on dividends, interest, and royalties.

• Possible exemptions for certain categories (e.g., some pensions).

Documentation

You generally need:

• A certificate of tax residency

• Evidence of taxes paid abroad

• Professional advice for correct treaty application.

Example:
A US professional with a property in Sicily and $60,000 in remote-work income declares everything in Italy as a tax resident. Under the US–Italy treaty, she can claim a credit for US taxes paid.

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Practical tips for managing tax residency

• Track your days
  Keep a log of days spent in Italy to avoid unintentionally exceeding the 183-day threshold.

• Register only when necessary
  Registration at the Anagrafe can determine residency; use it strategically (e.g., to access first-home benefits or long-term stays).

• Consult a tax advisor
  Especially important for cross-border income and digital nomads relying on treaties.

• Know your local property taxes
  Even as a non-resident, you may owe IMU (unless the property is your principal residence) or TASI.

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Next steps: plan ahead

Understanding how Italy defines tax residency is essential for a smooth relocation or property purchase. Whether you’re a young professional, an expat, or a digital nomad, clear rules help you avoid problems and maximise the benefits available.

For personalised guidance, book a session through ITS Journal’s tax advisory service starting at €50 via Substack chat.

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Disclaimer

This guide provides general information on Italy’s tax residency rules for foreign buyers and expats. For tailored advice, consult a qualified tax professional via our premium service.

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