Rental Income and Tax for non-residents

Hi all,

we (as non-residents and non-EU residents) own a house in Italy and last year was the first year in which we had rental income.
The local property management company we use just informed us that we have to pay tax on our  rental income which is something we were expecting (and are kind of happy to do)

What surprises me are 2 things:

1. The tax for the rental income of around 11,000 EURO is apparently almost 4,600 EURO which I think is a lot, that would almost be 44% tax.

2. The tax accountant asked for the rental income but not for any expenses (cleaning services, landscaping services, utilities, etc) and we were told you can not deduct any of the expenses against the rental income.
Is this indeed the case?

To be honest, if these 2 statements are true, I can not see how a rental property in Italy can make a lot of sense

Any insight into this?
I do not expect any tax advise, I understand it always depends on your personal situation but I am just looking for some general information

thanks

Hi. The tax seems too high. It is true you can't deduct any kind of expenses assuming you are not set up as a business with partita IVA etc. The rate of tax depends on what type of rentals you do and whther you are set up as a business or not.

Basically here are the types:
- Affitto Casa Vacanze (selected to use 'cedolare secca') : 21%
- Redditti Diversi (no specific regime or benefits so taxed as usual rate): from 23% to 43%
- Redditto di Impresa (you are set up as a business with P.IVA) : regular business rates of tax
- Redditti Fondiari (occasional rentals of not more than 30 dyas at a time*) : Taxed in the same way as the notional rental value of your property but in any case far less that the sum you have paid

* some comuni have rules about how many days max you may rent to qualify for this tax treatment

In any case, unless you are set up with a P.IVA (which frankly would be crazy unless you have many properties or the amouns are substantial) you should nmot be paying that much. I would go back to the agency and ask them which tax regime you are paying the tax under and to break down the figures for you. Remember that you may have to pay 50% of this year's tax on account for next year on top of your tax bill so the first year will be higher for that reason.