Real estate, wealth and inheritance

Swiss property of Italian residents

Many Italian families own holiday homes on the lakes of Lugano and Maggiore, and some own rental property in Ticino as an investment. Article 6 allocates income from immovable property, including income from agriculture and forestry, to the state in which the property is situated, without excluding taxation in the state of residence.¹ Article 13 paragraph 1 does the same for gains from the alienation of immovable property, and Article 22 paragraph 1 for capital represented by immovable property.² Switzerland therefore taxes the rental income of a Ticino flat owned by a Milan resident, the imputed rental value (valore locativo, Eigenmietwert) if the owner uses it himself, the wealth tax on its value and the real estate gains tax on its sale. Nonresidents are subject to limited tax liability in Ticino for these purposes, and the rates are determined by reference to their worldwide income and assets, which they must declare for that purpose.³

The Swiss taxation of imputed rental value will change. On 28 September 2025 Swiss voters approved the abolition of the imputed rental value on owner-occupied property, with 57.7 per cent in favour. The reform also abolishes the deduction of mortgage interest on owner-occupied homes and allows the cantons to introduce a special property tax on second homes.⁴ On 1 April 2026 the Federal Council fixed the entry into force for 1 January 2029, so that the cantons have time to decide whether to levy the new tax on second homes.⁵ For Italian owners of holiday homes in Ticino, the reform will remove the imputed rental value from 2029. Whether Ticino will introduce a property tax on second homes, which would fall mainly on non-resident owners, is a political question that the canton has yet to decide.

IVIE and the Italian side

In Italy, the resident owner of a foreign property must report it in section RW and pay the tax on the value of real estate held abroad (IVIE). The rate is 1.06 per cent a year. For property in a non-EU state such as Switzerland, the taxable base is the cost shown in the purchase deed or, in its absence, the market value at the end of the year in the place where the property is situated. No tax is due where the amount does not exceed EUR 200.⁶ Article 19 paragraph 16 of Decree-Law No. 201 of 2011 allows a credit against IVIE, up to its amount, for any wealth tax paid in the state where the property is situated. For Swiss property the Agenzia delle Entrate has accepted the cantonal and communal wealth tax of individuals and the cantonal real estate tax, in so far as they relate to the property and were paid in the same calendar year.⁷ Since the Swiss wealth tax on a property is levied on its tax value, often well below market value, and at rates that rarely exceed a few per mille, the credit seldom eliminates IVIE altogether.

The income from the Swiss property is taxable in Italy under Article 70 TUIR. Rental income is included in the Italian taxable income, with a credit for the Swiss income tax on it under Article 24 paragraph 2 of the convention and Article 165 TUIR.⁸ Article 70 paragraph 2 TUIR includes income from foreign property in the Italian total income in the net amount resulting from the valuation in the foreign state, and for buildings not subject to income tax abroad it provides a flat deduction of 15 per cent for expenses. The Swiss imputed rental value on an owner-occupied holiday home does not, however, generate Italian income tax. Since the Stability Law for 2013 (Law No. 228 of 24 December 2012), Article 19 paragraph 15-ter of Decree-Law No. 201 of 2011 has excluded property that is not let and is subject to IVIE from Article 70 paragraph 2 TUIR, so that IVIE takes the place of the income tax on such property while the reporting duty in section RW remains.⁹ For Italian residents under the flat tax regime of Article 24-bis TUIR described in Chapter E.V, foreign property is exempt from IVIE and from reporting in section RW.

Notes

1. Convention, Art. 6, text (above): "sono imponibili nello Stato contraente in cui detti beni sono situati". ↩
2. Convention, Art. 13 para. 1 and Art. 22 para. 1, text (above). ↩
3. Legge tributaria del Cantone Ticino of 21 June 1994 (LT), Arts. 3 and 4 (economic affiliation of non-residents, including real property) and Art. 6 (tax "all'aliquota corrispondente alla totalità dei loro redditi"), https://m3.ti.ch/CAN/RLeggi/public/index.php/raccolta-leggi/legge/num/580; StHG, Art. 4 para. 1 (natural persons without domicile who "Grundstücke besitzen, nutzen oder damit handeln"), https://www.droit-bilingue.ch/de-it/6/64/642.14-4-7.html. ↩
4. Taxolution, "Imputed Rental Value in Switzerland: What Property Owners Need to Know in 2026", updated 20 April 2026, https://www.taxolution.ch/?p=4588 (vote of 28 September 2025, 57.7 per cent in favour, turnout 49.5 per cent; cantonal property tax on second homes). ↩
5. Swiss Radio and Television (SRF), "Bundesrat setzt Abschaffung des Eigenmietwerts ab 2029 in Kraft", 1 April 2026, https://www.srf.ch/news/schweiz/bundesratsentscheid-bundesrat-setzt-abschaffung-des-eigenmietwerts-ab-2029-in-kraft. ↩
6. Federico Migliorini, "Investimento immobiliare in Svizzera", Fiscomania, 15 July 2026, https://fiscomania.com/investimento-immobiliare-svizzera/ (IVIE 1.06 per cent; base: purchase cost or market value; threshold EUR 200). ↩
7. Decree-Law No. 201 of 6 December 2011, Art. 19 para. 16 ("dall'Ivie si deduce, fino a concorrenza del suo ammontare, un credito d'imposta pari all'ammontare dell'eventuale imposta patrimoniale versata nello Stato in cui è situato l'immobile"), quoted in Ennio Vial and Vita Pozzi, "Il credito per le patrimoniali estere", Euroconference News, 27 June 2014, https://www.ecnews.it/fiscale/fisco-e-patrimonio/fisco-internazionale/il-credito-per-le-patrimoniali-estere/ (Circular No. 28/E of 2 July 2012 lists, for Switzerland, the imposta sulla sostanza delle persone fisiche and the imposta immobiliare; credit for taxes paid in the same calendar year). ↩
8. Convention, Art. 24 para. 2, text (above); Federico Migliorini, "Immobile estero: il regime di tassazione", Fiscomania, 19 December 2025, https://fiscomania.com/immobile-estero-il-regime-di-tassazione/ (rental income under Art. 70 TUIR, net amount as declared abroad, credit under Art. 165 TUIR for taxes definitively paid abroad); Migliorini, "Investimento immobiliare in Svizzera" (above) (rental income declared in both states, credit under Art. 165 TUIR). ↩
9. TUIR, Art. 70 para. 2, Brocardi.it, https://brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-vii/ art70.html ("nell'ammontare netto risultante dalla valutazione effettuata nello Stato estero"; reduction of 15 per cent for buildings not subject to income tax abroad); Marcello Maiorino, "La gestione fiscale degli immobili sfitti detenuti all'estero", Informazione Fiscale, 7 June 2024, https://www.informazionefiscale.it/immobili-sfitti-detenuti-all-estero-trattamento-fiscale (Decree-Law No. 201 of 2011, Art. 19 para. 15-ter, introduced by Law No. 228 of 24 December 2012, Art. 1 para. 518 lit. c: property not let and subject to IVIE is not subject to Art. 70 para. 2 TUIR; RW reporting remains). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.