Inheritance and Estate Tax in Italy

Italy's inheritance and gift tax — imposta sulle successioni e donazioni — is governed by Decreto Legislativo 346/1990 and administered by the Agenzia delle Entrate. The tax applies to the share received by each beneficiary, not to the overall estate, and uses a three-tier rate structure that is among the most moderate in the European Union. Legislative Decree 139/2024, effective 1 January 2025, made the most significant procedural changes to the regime in over two decades, shifting the burden of calculation and payment from the tax authority to the heirs themselves.

What rates and allowances apply depending on the relationship to the deceased?

The rate and the per-beneficiary allowance are determined by the heir's relationship to the person who died. Spouses and direct-line relatives — children, grandchildren, parents, grandparents — pay 4% on the portion of their individual share that exceeds EUR 1,000,000. Siblings pay 6% on the portion exceeding EUR 100,000 per person. Other relatives within the fourth degree of kinship, such as uncles, aunts, nephews, and nieces, pay 6% on their entire share with no tax-free allowance. Unrelated individuals pay 8% on their entire share with no allowance. Beneficiaries recognised as severely disabled under Article 3(3) of Law 104/1992 receive an enhanced allowance of EUR 1,500,000, regardless of their family connection to the deceased. Because the allowance is per-beneficiary, splitting an estate among several direct descendants — each with their own EUR 1,000,000 threshold — can result in little or no tax at all on moderately sized estates. [Source: Agenzia delle Entrate, Successioni e Donazioni.]

What did the 2025 reform under Legislative Decree 139/2024 change?

Legislative Decree 139/2024, published in the Official Gazette on 2 October 2024 and operative for successions opened from 1 January 2025, overhauled procedural aspects of the regime while leaving the substantive rates and allowances unchanged. The most consequential change is mandatory self-assessment: heirs are now required to calculate the inheritance tax due themselves and pay it within 90 days of submitting the succession declaration, rather than waiting for the Agenzia delle Entrate to issue an assessment notice. The authority retains two years from the declaration date to challenge calculations and issue additional demands. A second major change abolished the coacervo successorio rule, which had previously required lifetime gifts to be added back to the estate when calculating the EUR 1,000,000 allowance threshold. From 1 January 2025, gifts made during the deceased's lifetime and assets passing at death have independent allowances, in effect allowing each qualifying heir up to EUR 2,000,000 in combined lifetime gifts and inheritance before any tax is due. Trusts are now expressly confirmed as taxable events, with inheritance tax applied when assets are finally transferred to beneficiaries. [Source: Belluzzo International Partners, Donation and Inheritance Tax Reform in Italy, 2025; The Italian Lawyer, Italian Inheritance Tax Calculation Updates 2025.]

How does inheritance of real estate work, and what are the mortgage and cadastral taxes?

When real property passes on death, two additional transfer taxes apply alongside the main inheritance tax. The imposta ipotecaria (mortgage registration tax) is charged at 2% of the cadastral value of the property share transferred. The imposta catastale (cadastral updating tax) is charged at 1% of the same cadastral value. Cadastral values in Italy typically run 30 to 70 percent below market value, which reduces the effective tax burden on the real estate component. For a property that qualifies as the heir's first home — prima casa — both taxes are reduced to a fixed amount of EUR 200 each (EUR 400 in total), provided the heir registers the property as their habitual residence within 18 months of accepting the inheritance. An heir who inherits a property in Milan with a cadastral value of EUR 300,000 as a non-prima-casa transfer would therefore owe EUR 6,000 in imposta ipotecaria and EUR 3,000 in imposta catastale, in addition to any inheritance tax due on their share of the estate. [Source: Oliver Partners, New Rules - Inheritance Tax and Gift Tax in Italy; Estatefy, Inheritance and Gift Tax in Italy.]

Who is subject to Italian inheritance tax, and does it apply to worldwide assets?

If the person who died was a tax resident of Italy, the inheritance tax extends to all assets wherever they are located in the world — Italian real estate, overseas bank accounts, foreign shares, and property held abroad are all within scope. If the deceased was not an Italian tax resident, the tax applies only to assets physically situated in Italy, including Italian real property, shares in Italian-resident companies, Italian bank deposits, and Italian-registered financial accounts. Beneficiaries who are themselves non-residents are subject to the same rate-card and per-heir allowances as resident heirs; residence of the heir does not affect the rate. Italy has bilateral inheritance and gift tax treaties with seven countries — the United States, the United Kingdom, France, Sweden, Greece, Denmark, and Israel — to address potential double taxation on cross-border estates. For other countries, Italian law provides a unilateral credit under Article 26 of D.Lgs 346/1990 for equivalent foreign succession taxes paid on Italian-sited assets. [Source: Arletti Partners, International Succession and Italian Inheritance Tax Law.]

What are the filing requirements and deadlines?

A succession declaration must be filed electronically with the Agenzia delle Entrate within 12 months of the date of death. Italian residents and those with access to professional intermediaries (a notaio, commercialista, or avvocato) file through the authority's online portal using the approved succession form; non-residents unable to file electronically may submit by registered post. Under the self-assessment rules in force from 1 January 2025, payment is due within 90 days of submitting the declaration. Where the amount exceeds EUR 1,000, instalment payments are permitted: at least 20% is due upfront, with the remainder payable in up to eight quarterly instalments, or twelve instalments where the total exceeds EUR 20,000. Filing late or submitting an incorrect return carries significant penalties — a fixed penalty of 120% of the tax due for failure to file, or 80% of underpaid tax for an incorrect return — so accuracy at the self-assessment stage is important. Consulting a commercialista or qualified tax professional before filing is strongly recommended for estates of any complexity. See the Italy country overview for further context on Italian tax residency and cross-border considerations.

For an estate with any international dimension, significant real property, business interests, or a beneficiary with disabilities, the calculation can be complex. A qualified commercialista with succession experience can help heirs meet the new self-assessment obligations accurately and on time.