Registered comodato
Worthwhile when all the IMU requirements are met: the tax saving far outweighs the cost of registration.
Property · Family use
Lending a home free of charge: the comodato
Giving your child a home to live in without renting it to them is perfectly normal. Getting the IMU (Italian municipal property tax) reduction for doing so is another matter: there are five requirements, they must all be met at the same time, and missing just one is enough to lose the benefit.
01 · The contract
Lending a home to family in Italy: what a comodato is
The comodato d'uso gratuito (free loan for use) is the contract by which one party hands an asset over to another so that they can use it for a set time or purpose, with the obligation to give it back. Its essential feature is that it is free of charge: if there is any payment in return, it is not a comodato but a lease.
Applied to property, it is the tool used to let a family member live in a home without receiving rent. In itself it would not need to be in writing, but to obtain the IMU relief a written contract and its registration are essential.
- The borrower can be required to pay the ordinary costs of upkeep and use: this is not payment in return.
- Having the utility bills paid by whoever uses the property does not undermine the free-of-charge nature.
- A reasonable reimbursement of expenses is compatible; a fixed, disproportionate periodic amount risks the arrangement being reclassified as a lease.
- The comodato can be for a fixed term or open-ended, with different rules on returning the property.
- The lender can ask for the property back early only in case of urgent and unforeseen need.
Reclassification as a lease is not theoretical: if regular payments from the borrower to the lender come to light, the arrangement can be treated as an undeclared lease, with tax recovered, penalties and loss of the IMU relief.
02 · The benefit
The reduction in the IMU taxable base when you lend a home
It is the reason almost everyone registers a comodato. The law provides for a reduction in the taxable base for a property lent to a first-degree relative in the direct line, but only when all the conditions are met.
- The borrower must be the lender's child or parent: only the first degree in the direct line.
- The borrower must have their registered residence and habitual home in the property.
- The lender must reside in the same Comune (municipality) where the lent property is located.
- The lender must not own any other residential property in Italy besides their own main home and the one lent, both in the same Comune.
- The property must not belong to the luxury cadastral categories.
- The contract must be registered.
The requirement that sinks the most cases is owning other property: an inherited share of a house in another Comune is enough to lose the benefit. The land registry searches for every property must be checked, not only for the one being lent.
03 · The formalities
How to register it
Without registration there is no relief, and the registration date is the date from which the benefit runs.
The written contract
It must be drawn up in writing, stating the parties, the property with its cadastral details, the duration and that it is free of charge.
Registration
With the Agenzia delle Entrate (the Italian Revenue Agency), paying the fixed registration tax and the revenue stamps. It can be done online.
The IMU declaration
It must be filed with the Comune to show that the requirements are met, within the set deadlines.
Start date
The benefit applies from the month in which the conditions are met, with the month-by-month count used for IMU.
What registration costs
The items are few and the amounts modest.
- Registration tax at a fixed rate
- Revenue stamps, depending on the number of pages and copies
- No proportional tax, because there is no payment in return
- The cost is almost always recovered with the first year of IMU reduction
04 · The consequences
The other effects of a comodato
The IMU reduction is not the only effect: the comodato affects local taxes, the income tax return and the ISEE (the Italian means-test indicator).
| Aspect | Effect |
|---|---|
| IMU | Paid by the owner, with the reduction if the requirements are met |
| TARI (municipal waste tax) | Paid by whoever occupies the property, that is the borrower |
| Income tax return | The owner declares the cadastral income; there is no rent to tax |
| Lender's ISEE | The property remains among their assets |
| Borrower's ISEE | The property is not theirs, but their residence affects other items |
| Rent tax credit | Not available: there is no lease and no rent |
A borrower living in the property cannot claim any rent tax credit, because they pay no rent. Anyone who needs the tenant tax credit should consider a lease instead, perhaps on an agreed-rent contract, which has advantages for both parties.
05 · The assessment
When it is worthwhile and when it is not
The choice is between three routes: a registered comodato, an informal comodato with no registration, or a lease. Each has a cost and a benefit.
Unregistered comodato
Legitimate but with no relief at all. It only makes sense when the requirements are not met anyway.
Agreed-rent lease
If there is rent, or your child needs the tax credit, it is the correct route and has reliefs of its own.
If a requirement is missing
Registering for IMU purposes serves no purpose. It is worth checking whether the situation can be put right, for example by rearranging the properties owned.
If the property is jointly owned
The reduction applies pro rata, according to each co-owner's position with respect to the requirements.
If your child studies away from home
Registered residence in the property is a necessary condition: without it, there is no benefit.
06 · When it ends
How a comodato ends
The end of the arrangement needs to be managed, because it has immediate tax effects.
- A fixed-term comodato ends when the term expires, and the property must be returned.
- An open-ended comodato ends when the lender asks for the property back, unless it was granted for a specific use.
- The end must be notified to the Comune for IMU purposes, because the benefit stops.
- The termination of the registered contract must be notified to the Agenzia delle Entrate.
- Losing even a single requirement during the year stops the relief, counted month by month.
- If the requirements are no longer met and nothing is notified, too little IMU has been paid: the difference is recovered with ravvedimento (voluntary correction).
The recurring case: the child moves out and changes residence, but nobody tells the Comune and IMU continues to be paid at the reduced amount. The mismatch between the civil registry and the IMU declaration comes to light in cross-checks, and putting it right costs more than the tax difference.
Frequently asked
The questions that keep coming up
I have a home in Turin and a garage in another Comune. Do I lose the relief?
The requirement concerns residential property: appurtenances such as garages and cellars, if classified in the corresponding cadastral categories, follow their own rules.
The point must be checked on the land registry searches, because the actual cadastral classification counts more than how the space is used. A room registered as residential, even if used for storage, costs you the benefit.
Can I lend a property to my brother?
The contract, yes, and it is fully valid. The IMU reduction, no: the law reserves the relief for first-degree relatives in the direct line, that is parents and children.
Brothers and sisters, nephews and nieces, parents-in-law are left out of the relief, however genuine and registered the comodato may be.
My son gives me something towards the expenses. Does the comodato still hold?
Reimbursing the ordinary costs of upkeep and use, and paying the utility bills, are compatible with the free-of-charge nature of the comodato.
A fixed periodic amount, out of proportion to the actual expenses, is a different matter: in that case the arrangement risks being reclassified as an undeclared lease, with heavy consequences in taxes and penalties.
Do I have to register it even if I do not meet the IMU requirements?
It is not compulsory: a comodato of property can even be verbal. Registration is only needed for the IMU relief.
It can still be useful to register it anyway, to give the agreement a certain date and clarify the relationship between the parties, especially when the property is jointly owned or other family members are involved.
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