Capital gain on the sale of a property is payable only if you sell within five years of purchase, and not always. Properties received by inheritance are excluded — totally and without time limits — as well as those that were your or your family member’s main residence for the majority of the ownership period.
The rate, when applicable, is 26% with substitute tax, as an alternative to ordinary IRPEF taxation. Starting in 2024, there is also a special ten-year regime for properties on which interventions with the Superbonus have been carried out.
The general rule
Article 67, paragraph 1, letter b) of the TUIR considers capital gains realized by selling properties purchased or built no more than five years ago as miscellaneous income, with two exceptions explicitly stated in the law itself:
- properties acquired by inheritance;
- real estate units that, for the majority of the period between purchase or construction and sale, were used as the main residence of the seller or their family members.
Building land is a separate matter: it is always taxable, with no time limits, and excluded from the substitute tax regime.
Two clarifications that change the outcome
The main residence does not require five years. It is sufficient that the property was used as such for the majority of the ownership period: if you bought it two years ago and lived there for fourteen months, the exemption applies even if you sell now. This also applies if a family member lived there.
Inheritance always exempts. Even if selling the day after the succession opens, and even if the deceased had purchased the property just a month before.
Donation is not an exemption — a common mistake
Here is a point that is often wrong everywhere, including some outdated notary sites: donation is not listed among the exemptions.
According to article 37, paragraph 38, of decree law 223/2006, when the property was received by donation the five-year period starts from the donor’s purchase date. The consequences are symmetrical:
- if the donor owned the property for more than five years, no capital gains tax applies, even if sold immediately after the donation;
- if the donor owned it for less than five years, capital gains tax applies, and the purchase cost is assumed as that sustained by the donor, increased by the donation tax.
Donation and inheritance are not at all the same fiscally. If someone tells you otherwise, check the citation date of the information.
How to calculate it
Article 68, paragraph 1, of the TUIR defines the capital gain as the difference between the amount received and the purchase price or construction cost, increased by all other related expenses.
That phrase, “all other related expenses,” is important, as it allows you to increase the purchase cost by including:
- taxes paid at purchase — registry, mortgage, cadastral, or VAT;
- notarial fees incurred for the purchase;
- intermediary commissions;
- incremental expenses, that is, renovations that increased the property’s value;
- expenses incurred to free the property from encumbrances.
Mortgage interest is not deductible.
Keeping invoices for renovations is therefore not just good accounting practice: it concretely reduces the taxable amount. Those who discarded them pay more.
The 26% rate and how to choose it
The 26% substitute tax is provided by article 1, paragraph 496, of law 266/2005; the rate was set at 26% by article 1, paragraph 695, of law 160/2019, for sales made from January 1, 2020. It can only be used by individuals not acting in a business, art, or professional context.
The option must be exercised by an explicit request to the notary at the time of sale, to be included as a clause in the deed. The notary applies the rate to the capital gain declared by the seller — without verification — pays the tax using the F24 form and transmits the data to the Agenzia delle Entrate. The seller is thus exempt from declaring it on their tax return.
The alternative is ordinary IRPEF taxation, declaring the capital gain in the RL form: it is aggregated with other income and taxed at the marginal rate. The 26% rate is convenient for those above the first bracket, while those with very low overall income should compare the two options.
The Superbonus regime: ten years, not five
From January 1, 2024, there is a distinct case, letter b-bis) of article 67 of the TUIR, introduced by article 1, paragraph 64, of law 213/2023.
It concerns properties on which the seller or other entitled parties have carried out interventions eligible under article 119 of decree law 34/2020 — the Superbonus — concluded no more than ten years before the sale.
The term starts from the date of completion of the interventions, not the property’s purchase date. This was clarified by the Agenzia delle Entrate with circular 13/E of June 13, 2024.
Exclusions and precise wording
Excluded remain properties acquired by inheritance and those used as the main residence of the seller or their family members for the majority of the ten years prior to the sale — or, if less than ten years have elapsed between purchase and sale, for the majority of that period.
Attention to wording: interpretations circulate suggesting it would be sufficient for the main residence to have been for most of the period between the end of works and the sale. The law says otherwise and is more stringent.
Donation is not a ground for exclusion: only inheritance is. Those who receive by donation and resell within ten years are taxed, even if the works were done by the donor.
What circular 13/E clarified
- Only the first onerous sale following the completion of works is relevant.
- The amount of deduction is irrelevant: 110%, 90%, 70%, or 65% all apply to the new case.
- The form of enjoying the benefit is irrelevant: direct deduction, invoice discount, or credit transfer.
- In condominiums, it is sufficient that the interventions involved common parts, regardless of whether they were train or driven interventions.
How to calculate the purchase cost
This is the most technically delicate point, and conditions must be read carefully because they must apply jointly.
| When the works were completed | Treatment of expenses |
|---|---|
| Not more than 5 years ago | Expenses are not counted if the 110% incentive was enjoyed and options of invoice discount or credit transfer were exercised |
| More than 5 and up to 10 years ago | 50% of the expenses are counted if the 110% incentive was enjoyed |
One often-overlooked consequence: those who enjoyed the Superbonus with direct deduction in the tax return, or with rates lower than 110%, maintain the expenses as computable in the purchase cost. Not all beneficiaries of the Superbonus are in the same situation.
For properties under letter b-bis) owned for more than five years, the cost is also revalued according to the ISTAT consumer price index. These capital gains are also subject to 26% substitute tax, under article 1, paragraph 65, of law 213/2023.
In summary
Outside five years, with inheritance or after living there for the majority of ownership, no tax is due. When payable, the 26% substitute tax is requested from the notary at the time of sale and is almost always advantageous compared to ordinary IRPEF. Two common traps: donation does not exempt — the donor’s date matters — and properties with Superbonus interventions have a ten-year term, not five.
The matter is technical and the calculation should be made on the specific case, preferably with your accountant. If you are considering a sale in Milano San Felice or Segrate and want to assess your situation before moving forward, we can provide initial guidance.
Frequently Asked Questions
When is capital gain on the sale of a house not payable?
When more than five years have passed since purchase or construction; when the property was acquired by inheritance, with no time limits; and when it was the main residence of you or a family member for the majority of the ownership period. For properties with Superbonus interventions, the term is ten years from the completion of the works.
When is the 26% capital gain tax paid?
The 26% is the substitute tax that can be chosen when capital gain is taxable, as an alternative to ordinary IRPEF taxation. The option must be expressly requested from the notary at the sale act, with a clause in the deed; the notary pays the tax and communicates the data to the Agenzia delle Entrate.
When does capital gain arise on properties?
By selling within five years from purchase or construction, except for exclusions due to inheritance and main residence. For properties with Superbonus interventions concluded less than ten years ago, the new autonomous regime introduced in 2024 applies, limited to the first onerous sale following completion of works.
How much is paid on the capital gain of a property?
26% on the capital gain, with substitute tax. Alternatively, the IRPEF marginal rate applying ordinary taxation. The capital gain is the difference between the sale price and the purchase cost increased by all related expenses: taxes paid at purchase, notarial fees, commissions, and renovation expenses.
Do renovations reduce the capital gain?
Yes. Incremental expenses add to the purchase cost and thus reduce the taxable amount. Keeping invoices is what makes it possible to prove it. Mortgage interest, however, is not deductible.
If I inherited the house, do I have to pay capital gain tax?
No. Properties acquired by inheritance are fully and unconditionally excluded, even if sold immediately. The exclusion also applies under the special regime for properties with Superbonus interventions.
