What Israeli Citizens Need to Know When Buying Property in Italy: Taxes, Agreements, and How to Avoid Extra Costs
Buying property in Italy is not only a financial investment but also an important legal step. Like any international investment, it requires careful attention, especially to tax matters. If you're an Israeli citizen looking to purchase property in Italy, it's crucial to understand how to avoid unnecessary taxes and make the process as beneficial and transparent as possible.
Taxes on Property Purchase: Pay Only in Italy
When you buy property in Italy, you don’t need to worry about paying taxes in Israel. Israeli "Land Law" does not apply to foreign assets. All taxes related to the purchase, such as registration tax and property transfer tax, are paid exclusively in Italy. Importantly, there are no additional tax obligations in Israel at the time of purchase.
Taxes on Rental Income: How to Avoid Overpaying
If you plan to rent out your property, you’ll need to pay taxes both in Italy and Israel. But don’t worry — thanks to the double taxation agreement, you can avoid paying taxes twice on the same income. For example, taxes paid in Italy can be credited against your tax liability in Israel, helping you reduce your overall tax burden.
How the Double Taxation Agreement Between Israel and Italy Works
No need to fear double taxes! Israel and Italy have signed a double taxation agreement that protects you from unnecessary expenses. This agreement covers not only rental income but also property sales. For example, if you decide to sell your property in Italy, the capital gains tax paid in Italy will be credited when calculating your tax in Israel. This simplifies things and helps you avoid unnecessary costs.
Tips for Israeli Investors: How to Proceed Correctly
To avoid surprises and confidently move forward with your investment, it’s important to consult with tax professionals in both Israel and Italy. This will help you understand how to properly declare income and minimize risks. Additionally, keep in mind that tax agreements can be updated, and regular consultations with professionals will help you stay informed.
Conclusion
Knowing all the tax nuances will help you avoid mistakes and make your property purchase in Italy not only profitable but also safe. With the right preparation, you can save on taxes and avoid excessive expenses, making your investment more profitable and effective.