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IMU tax for unusable buildings: Resolution n. 4/DF of November 16th 2023

The Italian Revenue Agency clarifies a series of cases concerning IMU tax.

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Through Resolution n. 4/2023 of November 16th, the Italian Department of Finance has clarified different issues regarding IMU tax, specifically for unusable buildings and instrumental rural buildings.

The questions submitted by the applicants

The first issue

The first question raised by the applicants concerns the legitimacy of the application of IMU on unusable buildings, registered in cadastral category F/2. Applicants claim that Municipalities try to classify such buildings as building land, which is subject to IMU. On the other hand, the Department’s resolution clarifies that, although they are considered buildings, the absence of income, due to the lack of income autonomy, excludes the application of IMU. The tax assumption is the taxpaying capacity of the asset, which is absent in this type of buildings.

Unusable buildings are defined as buildings in the land registry and they may not be categorised as building land, as Municipalities claim. This interpretation is in line with sentence n. 8620/2019 by the Court of Cassation, which established that buildings registered as unusable are taxable neither as buildings nor as building land. This applies unless demolition provides autonomy to the building area, which will then be subject to taxation, starting from that moment.

In conclusion, according to the Department of Finance’s resolution and the sentences mentioned above, IMU is not due on unusable buildings, because of the absence of income autonomy and the lack of taxpaying capacity.

The second issue

The second question tackled concerns the requirements to benefit from a reduced tax rate of IMU on instrumental rural buildings, provided for by the 2020 Budget Law. Such tax rate, which may be reduced up to zero, does not necessarily require to be a farmer, as opposed to what Municipalities claim. Indeed, Municipalities consider the status of farmer or professional agricultural entrepreneur essential to obtain the benefit on IMU. Moreover, Municipalities do not recognise loan contracts as valid documents to certify the lease of instrumental buildings.

The Department of Finance rejects this claim, highlighting that the status of farmer or agricultural entrepreneur is not relevant for the tax discount and confirming that loan contracts are valid to demonstrate the rurality requirement.

The resolution states that the determination of reduced IMU must be based exclusively on the classification of the asset in cadastral category D/10 or on the affixing of the related annotation, not on the status of farmer or agricultural entrepreneur.

This interpretation is in line with the opinion of the Court of Cassation. Indeed, the Court has established that, if a building is classified as rural in the land register, any assessment related to ICI (Municipal Tax on Immovable Property) must be linked to a specific appeal to the cadastral classification.

In conclusion, according to the Department’s resolution and the case law mentioned above, the status of farmer is not a requirement to benefit from the reduced tax rate of IMU on instrumental rural buildings. In addition, loan contracts are considered valid to demonstrate the rurality of the building.

The third issue

The third question examined by the Department of Finance concerns the exemption from IMU in case of associated lease of land. Common contractual forms in this context are the network agricultural contract and the agricultural co-partnership. Through these contracts, agricultural entrepreneurs/farmers or professional agricultural entrepreneurs manage their own land in partnership with other entrepreneurs, for a specific period of time.

According to the applicants, these professional figures do not lose the right to use their land, but they manage them in an associated form, thus retaining the requirement for exemption from IMU. The exemption is a benefit which is recognised to agricultural land owned and used by farmers and by agricultural entrepreneurs enrolled in agricultural social security, including agricultural companies, independently from their location. According to the Department of Finance, in order to access this benefit, it is sufficient for land owners to be enrolled in social security and to use the land.

The resolution rejects the restrictive interpretation of the Municipalities that did not recognise this benefit. The Department of Finance clarifies that associated management of land is an adequate element to justify the application of the exemption from IMU, in compliance with the legislator’s will, as indicated in Art. 1, Par. 758 of the 2020 Budget Law.

Regulatory Framework

Resolution n. 4/DF

Reference (Italian only)

2020 Budget Law

Reference (Italian only)

Article 1 of Legislative Decree n. 99/2004

Reference (Italian only)

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