Is there inheritance tax in Italy? The actual numbers

This guide is general information, not tax advice. Carroll Law handles an Italian estate on both sides — who inherits and how the assets transfer, and the Italian succession tax itself: we compute it, prepare the declaration and file it as part of the work. Tax back home is not ours, and we say plainly and early where an adviser there is needed.

How Italian inheritance tax works

The imposta di successione is charged on what each heir receives, not on the estate as a whole, at rates set by the closeness of the relationship, each with its own tax-free allowance (franchigia):

• Spouse and children (and parents): 4% — but only on what each receives above €1,000,000. Below that: nothing.
• Brothers and sisters: 6% above €100,000 each.
• Other relatives to the fourth degree (nephews, nieces, uncles, cousins): 6%, no allowance.
• Unrelated persons: 8%, no allowance.
• Heirs with a severe disability: allowance raised to €1,500,000, whatever the relationship.

A non-resident heir inheriting from a non-resident owner is taxed only on the assets in Italy — the Italian property and Italian accounts.

So does a family estate really pay nothing?

On the inheritance tax itself, very often yes: with €1,000,000 of allowance per heir, a holiday home and a bank account passing to a spouse and children almost never touch the 4%. Italy is, for close family, one of the lightest inheritance-tax countries in Europe.

The cost that does arrive: the property transfer taxes

Where Italian real estate passes, two further taxes are always due on the transfer: the imposta ipotecaria (2%) and the imposta catastale (1%) — 3% in total, charged on the property’s cadastral value, not its market value. The cadastral value is the property’s official value on the tax register: it is worked out from a notional annual rent the authorities assign the property for its size, class and location, then multiplied up by fixed statutory figures — so it has nothing to do with what anyone would pay for the house, and it is revised only rarely. Cadastral values are therefore typically far below what the property would sell for, which softens the real cost considerably (a flat worth €200,000 on the market may carry a cadastral value nearer half that, making the 3% roughly €3,000–€3,500 rather than €6,000). Each tax has a minimum of €200, and an heir who qualifies for Italy’s main-home relief pays a fixed €200 each instead — though the residence conditions are hard for heirs living abroad to meet.

A worked example

An estate of a house and a bank account passing half to the surviving spouse and a quarter to each of two children, all living abroad: every share sits comfortably inside its €1,000,000 allowance, so the inheritance tax is nil for all three — and the only tax bill is the 3% of the house’s cadastral value, paid once on filing. The exact cadastral figure comes off the property’s registry record, and we obtain it at the start so the number is known before anyone commits to anything.

The deadline, and the 2025 reform

The succession declaration (dichiarazione di successione) must be filed electronically within twelve months of the death. For deaths from 1 January 2025 Italy moved to self-assessment: the property transfer taxes are paid on filing, and any inheritance tax is self-computed and paid shortly after, with instalments available for larger amounts. Filing also updates the land registry records automatically.

And if the deadline is missed? Italy rewrote its penalties in 2024, and they are now fixed rather than banded. File nothing at all and the penalty is 120% of the tax. File within thirty days of the deadline and it falls to 45%. Declare too little and it is 80%. Paying late, or paying short, carries its own 25%. Interest runs on top, at 1.60% for 2026. Coming forward voluntarily, before the tax office raises it, reduces these substantially — which is the whole argument for preparing the declaration early rather than letting the twelve months run down.

Why nothing moves until the declaration is filed

Italian law bars banks from releasing a deceased customer’s funds until they see proof the succession declaration has been filed — the tax office issues the receipt that unlocks everything. This is why, in our own process, the declaration is prepared early rather than left to drift toward the twelve-month deadline.

What about tax at home?

The United Kingdom and Italy have an inheritance-tax convention dating from 1966 (in force 1968): Italian inheritance tax paid on Italian property is credited against UK inheritance tax on the same asset. The 3% property transfer taxes are treated less kindly — HMRC often resists giving treaty credit for them, and relief is then pursued under the UK’s unilateral rules. Because Italian family rates are so low, a UK-taxable estate usually finds the UK side is where the real tax conversation happens — which is exactly where your UK adviser comes in.

The same question in our other countries: Portugal · Spain · France.