19 May 2023
DICHIARAZIONE DEI REDDITI
Investing in real estate assets is probably among the most challenging forms of investment, and for this very reason it is also considered among the most attractive.
Investing in real estate, in fact, requires a set of multidisciplinary skills and knowledge that make the real estate investor a committed figure capable of solving problems on multiple levels.
One of the levels on which the real estate investor is called upon to have knowledge and solve any critical issues is the tax level. The declaration of a real estate investment is not entirely straightforward; it has differences related to the type of property invested in.
Thanks to the digitization of investments, then, the real estate sector has also benefited with the emergence of real estate crowdfunding. This is a new way of investing in real estate that expands the frontiers and makes it easier to invest in real estate, but it needs to be fully understood in order to take full advantage of it. Also from a tax perspective.
In this guide structured in the form of questions and answers, therefore, we will provide you with a series of answers to the main questions related to how to declare an investment property when you file your tax return with the Internal Revenue Service. By the end of the reading you will have a clearer overview that will enable you to approach the field with greater awareness.
When it comes time to file your personal tax return, some basic documents are a must. Namely:
In addition to these basic documents, the following documentation must be prepared for the declaration of income from the ownership of real estate and land:
To which can be added the copy of the lease agreement, SIRIA form and Form 69 in the specific cases provided.
Declaring investment property in the tax return is always mandatory, but the procedure to follow varies depending on the intended use of the property and its nature.
Regarding the declaration of rental income generated by investment property, specifically, Legislative Decree Number 23 of 2011 establishes the option for the taxpayer to choose a substitute tax regime on rental income. This is the dry rent coupon, which applies to individuals who own real estate in lieu of IRPEF.
It goes without saying that the declaration of rental income follows a dual track that the taxpayer can choose according to his or her tax situation: IRPEF taxation of rented property; taxation of buildings with the dry coupon tax.
Tax obligations related to real estate crowdfunding have not yet received a dedicated regulatory framework. So one has to refer to the existing tax framework that has instead regulated crowdfunding platforms with Law No. 205/17, which introduced the 26 percent withholding tax on equity crowdfunding.
To be eligible for the 26% regime, two conditions must be met:
By meeting these conditions, you will not have to subject the gain to IRPEF taxation. The company in which you invested will levy a 26 percent tax on the return generated by the real estate transaction, that is, only on dividends and not on the invested capital. In this case, the company will act as a tax withholding agent and you will not have to declare anything on your tax return.
It is clear, therefore, that for the individual who invests in real estate through a crowdfunding platform, the tax return is greatly simplified compared to the case of the direct purchase of a property. Nor will he or she have to worry about how to include capital gains or losses in the tax return when investing through a real estate crowdfunding platform.
However, in the following chapter we will look at the specific cases in which it is necessary to declare capital gains or losses as a result of a real estate investment.
Capital gains on real estate investment resulting from the purchase of a building or real estate unit should be declared only in specific cases. These specific cases include the resale of the property within 5 years of purchase or if sold within 5 years of its construction.
The declaration of this type of capital gain has two paths.
However, Articles 67 and 68 of the Consolidated Income Tax Act (TUIR) provide guidance regarding the declaration of capital gains and losses accrued also as a result of the purchase of financial securities.
Financial securities may include shares in listed or unlisted real estate companies or builders, as well as shares held in a real estate fund.
The taxpayer is required to declare capital gains and losses of financial securities related to real estate values using Form 730 or the Individual Income Form.
Through our guide to declaring real estate investments in your tax return, you learned how complex it can be to manage the tax part of a physical property held in Italy or abroad.
And you have also discovered how much more immediate and simple it can be to invest in real estate through real estate crowdfunding.
In fact, when you you invest in real estate with crowdfunding platforms, you do not have to declare ownership of the property, since yours turns out to be a financial investment. A single, fixed tax rate of 26 percent applies to financial investments, which regulated platforms in Italy can also withhold at source, acting as a tax withholding agent.
A great advantage the latter since it frees you from the paperwork involved in declaring physical property held, reduces to zero the hours you have to spend figuring out how to declare any property held abroad and/or special cases. In no small part, it reduces the cost item related to the accountant.
In addition, real estate crowdfunding makes investing in real estate accessible to everyone, even those who cannot invest large assets. Real estate crowdfunding, then, offers a range of investment options and participation levels that can adapt to investors' different needs.
Ultimately, real estate crowdfunding makes investing in real estate accessible to everyone, simplifies bureaucracy and your tax return consistently.
Warnings pursuant to Article 19(2)
crowdfunding services provided by Mamacrowd are not covered by the Deposit Guarantee Scheme established in accordance with Directive 2014/49/EU*; securities and instruments eligible for crowdfunding purposes that can be acquired through this crowdfunding platform are not covered by the Investor Compensation Scheme established in accordance with Directive 97/9/EC**.
* Directive 2014/49/EU of the European Parliament and of the Council on Deposit Guarantee Schemes.
** Directive 97/9/EC of the European Parliament and of the Council on investor-compensation schemes.
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