The possession of real estate not rented in the same municipality as the main residence determines the obligation to declare an income for IRPEF purposes. The income is equal to 50% of the cadastral income revalued by 5% increased by 1/3. This is in addition to the normal IMU payment. All info in this article.
Individuals who own non-rented property in the same municipality as their primary residence should be careful.
These parties are required to subject to IRPEF taxation 50% of the cadastral income, recorded or registerable in the land register of the same property, revalued by 5%, and increased by 1/3.
This is a special case of exemption from the principle of alternating IMU IRPEF for real estate.
This particular taxation was introduced by Article 9 of Legislative Decree no. 23/11, amended by Legislative Decree no. 147/13, Article 1, paragraph 717. This legislation, in fact, has changed the rules for the alternative taxation between IMU and IRPEF of non-rented property.
In this article, you need to understand which cases you need to submit the tax return for the possession of the non-rented property in the same municipality of the main house.
Principle of alternation between IMU and IRPEF
Article 8 of Legislative Decree no. 23/11 established a general principle of alternating between the taxation of IMU and IRPEF (with related additional taxes) on property income relating to the non-rented property.
Basically, the general rule is that a non-rented property is not subject to IMU taxation. For this reason, such property must not also be subject to IRPEF taxation (of the cadastral type).
Alongside this general rule, Decree-Law No. 147/13 established a particular exception. In particular, Article 1, paragraph 717, confirmed that:
“The income from non-rented residential property located in the same municipality as the property used as the main residence, subject to municipal taxation, contributes to the formation of the taxable base for personal income tax (Irpef) and related additional taxes, to the extent of 50%“.
IRPEF taxation for non-rented property
The exemption from the rules governing the alternation between IMU and IRPEF for non-rented property (Decree-Law No. 147/13) applies only in some instances.
In particular, the following conditions must be met simultaneously:
- Ownership (or other rights in rem) of non-rented residential property;
- Property subject to IMU;
- Property located in the same municipality as the main residence.
Before examining the scope of application of this provision, it should be noted that it must be seen to the provisions of Article 41 of Presidential Decree 917/86.
This article provides that if the real estate units for residential use are at the “disposal” of the owner or his family members (and therefore different from the one used as the main residence, or for the exercise of business or arts and professions), the taxable income (revalued cadastral income) is increased by 1/3.
Combining the legislation with Article 41 of Presidential Decree No. 917/86, it emerges that:
for the properties concerned, taxation for Irpef purposes takes place on the cadastral income of the real estate unit revalued by 5%, increased by 1/3 (since it is a property held at disposal), and reduced to 50% as a result of the provisions of Decree-Law No. 147/2013.
Let us now go into more detail about this legislation.
What is meant by the main residence and a non-rented property?
When we speak of property used as the main residence, according to the clarification of the Ministry of Economy (Resolution No. 1/DF of March 4, 2009, on ICI), must be implied a link of ownership with the property itself.
For this reason, the criterion to be adopted for the definition of principal residence is the one used in income tax legislation for deduction from IRPEF.
This means that if the taxpayer has his main home in a property not owned by him, he will not meet the requirement of being subject to IRPEF of 50% of the cadastral income.
Therefore, for the rule of 50% of the cadastral income for IRPEF purposes to be valid, it is necessary to own, exclusively or co-ownership, all the real estate. Thus, both the main house and the other non-rented properties are kept at the disposal of the taxpayer.
In addition, the non-rented property includes both dwellings kept available for any reason (holiday home, vacant property) and property granted on loan to a family member.
Non-rented property: the cases in the tax return
Once the reference legislation has been analyzed, we will see below the various cases in which the taxpayer may find himself.
Let’s see them below.
Property leased irrespective of the municipality where it is located
In the case of a second property (in addition to the main house) rented, the taxation of the same is done in this way:
The greater the property’s cadastral income revalued by 5% and 95% of the rent must be taxed. This value must be subject to IRPEF.
Alternatively, the rental income can be taxed at 10% (contracts at agreed rent) or 21% (contracts at free rent). This is if you have made use of the “Cedolare Secca.”
In addition, IMU must be paid.
As regards the cases of exemption from the tax return, it is necessary to make some clarifications.
If a taxpayer owns the main house and one or more rented properties (without other income), he is always required to submit the declaration. Thus, in essence, there are never situations of exemption.
The taxpayer must submit the declaration to subject the income from the lease to IRPEF or to Cedolare Secca.
Non-rented property located in a municipality other than that of the main residence
The possession of the main residence and a second non-rented property located in a different municipality does not determine IRPEF taxation.
The two properties being located in different municipalities determine the general criterion of alternation between IMU and IRPEF.
This means that the only tax obligation relates to the payment of IMU on the non-rented property.
In this case, you fall into one of the exemption cases from the obligation to submit the tax return. All this, provided that the taxpayer does not have other taxable income IRPEF.
In fact, if the taxpayer owns only income from non-rented buildings (and no other income), he is not required to submit the declaration.
As far as the Unico form is concerned, if the building is kept at disposal (code 2 in column 2 “Use“), it is necessary to indicate in column 17 (Non-rented property) the amount of the cadastral rent (column 1) revalued by 5%, increased by one third and related to the days (column 3) and the percentage of possession (column 4).
If code 1 is indicated in the box “Casi particolari Imu,” the income must be reported in column 13 (Taxable income for ordinary taxation) rather than in column 17 (Non-rented property). This is because the income in the “Non-rented property” box is naturally not taxable for Irpef.
Non-rented property in the same municipality as the primary dwelling
In case of ownership of non-rented property located in the same municipality as the main house and the payment of IMU is also due IRPEF.
The taxpayer is called, in fact, to tax the land income in his income tax return. He will do it to measure 50% of the cadastral income revalued and increase by 1/3.
As we have seen, in this case, the principle of alternating IMU/IRPEF is waived.
This is because the legislator does not privilege those who hold non-rented properties. If these are located in the same municipality as the main home, the owner must pay an additional amount of IRPEF.
The purpose of this surcharge is to encourage the rental of vacant properties.
In this case, the taxpayer is always required to file a tax return.
As far as the compilation of the declaration is concerned, the income framework of reference is that of property income:
- Schedule B for those who submit the 730 model;
- Table RB for those who submit the Income Model PF.
Non-rented property and tax returns
The possession of non-rented property held in the same municipality as the main residence involves IRPEF taxation.
This means an obligation to file a tax return, even if you have no other income.
In particular, the obligation to submit the tax return is triggered when the revalued income increased by 1/3 exceeds the threshold of €. 500.00.
Below this threshold, you fall under the cases of exemption from the tax return.
Directions for the compilation of the income model PF for non-rented property
About the compilation of the Redditi PF model, care must be taken.
The reference income framework is that of property income:
- Schedule B for those who submit the 730 model;
- Table RB for those who submit the Income Model PF.
Since the building is kept at disposal, code 2 must be entered in column 2, “Use.” At the same time, code 3 must be entered in the Special cases IMU box.
In this way, 50% of the income (cadastral income revalued by 5% and increased by 1/3) will be reported in column 17 (non-rented property). While for the further 50 percent in column 13 (Ordinary IRPEF taxation).
Special cases IMU: the cases
At the end of this article, it may be helpful to summarize the three cases related to the “special cases IMU” indicated in the RB 12 row of the Income Form PF.
One of the following codes must be indicated on this line if there are particular situations concerning the application of IMU:
Special cases IMU 1
A building, other than the principal residence and its appurtenances, which is completely exempt from IMU or for which IMU is not due but is subject to income tax. In this case, the building’s income is subject to Irpef and the relative additional taxes even if it is not rented out.
Special cases IMU 2
Main house and appurtenances subject to Imu. This is, for example, the main homes classified in the cadastral categories A/1, A/8, and A/9 (“luxury homes“). If you indicate this code on the relative income, you do not have to pay IRPEF and additional taxes because they are substituted
By IMU. This code must also be indicated for the appurtenances subject to IMU.
Special cases IMU 3
Property for residential use not leased, subject to IMU, located in the same municipality in which the property used as the main residence is located. In this case, the property’s income contributes to the formation of the taxable base of Irpef and related additional to the extent of 50 percent. It should be noted that the main residence is the property where the owner (or holder of another right in rem), or his family members usually live (code 1 in column 2). This includes rural buildings used as the main dwelling, even if they are not included in the RB box.
