The loss of a loved one brings with it, beyond the grief, a series of bureaucratic and tax obligations that often catch people unprepared. Among these, calculating and paying inheritance tax represents one of the most complex and least understood aspects. In this comprehensive guide, we analyze in detail how inheritance taxes work in Italy in 2026, what the rates are, the exemptions, and how to calculate exactly how much you need to pay.
What Is Inheritance Tax
Inheritance tax is a levy on the transfer of assets and rights upon the death of a person (the "de cuius" or deceased). It applies to the entire estate of the deceased transferred to the heirs, including real estate, movable property, money, securities, corporate shares, credits, and any other property rights.
The tax is governed by Legislative Decree 346/1990 (Consolidated Text of provisions concerning inheritance and gift tax), and was reintroduced in 2006 after a period of abolition. Italy has one of the most favorable inheritance tax regimes in Europe, thanks to high exemption thresholds and relatively low rates compared to other countries.
Who Must Pay Inheritance Tax
The tax is owed by each heir or legatee in proportion to their share of the inheritance. The main obligations are:
- Filing the inheritance tax return: mandatory within 12 months of the date of death, it must be submitted to the Italian Revenue Agency (Agenzia delle Entrate) — since 2019, exclusively online.
- Tax payment: the Revenue Agency calculates the tax and issues a tax assessment notice. Payment must be made within 60 days of notification.
- Mortgage and cadastral taxes: if the inheritance includes real estate, these taxes must be paid at the time of filing the inheritance tax return.
The spouse and direct-line relatives are exempt from filing the return if the estate does not exceed 100,000 euros and does not include real estate.
Inheritance Tax Rates
The Italian system provides differentiated rates based on the degree of kinship between the deceased and the beneficiary. This principle reflects the legislator's intent to provide greater protection for transfers within the immediate family.
Spouse and Direct-Line Relatives: 4%
For the spouse, children (including adopted children), parents, grandparents, and direct grandchildren (children of children), the rate is 4% with an exemption threshold of 1,000,000 euros per beneficiary.
This means that a child who inherits assets worth up to 1 million euros pays no inheritance tax. Only the portion exceeding the exemption is subject to the 4% rate. For example, if a child inherits assets worth 1,500,000 euros, the tax will be: (1,500,000 - 1,000,000) x 4% = 20,000 euros.
Siblings: 6% with Exemption
For the deceased's brothers and sisters, the rate is 6% with an exemption threshold of 100,000 euros per beneficiary. The exemption is significantly lower than that for spouses and children.
Other Relatives and In-Laws: 6% Without Exemption
For other relatives up to the 4th degree (uncles, cousins, great-grandchildren), direct-line in-laws (parents-in-law, sons/daughters-in-law), and collateral in-laws up to the 3rd degree (brothers/sisters-in-law), the rate is 6% without any exemption. The tax is calculated on the entire value of the inherited assets.
Non-Relatives and Other Parties: 8% Without Exemption
For all other parties (friends, non-registered domestic partners, relatives beyond the 4th degree, in-laws beyond the 3rd degree, entities and companies), the rate is 8% without exemption.
Beneficiaries with Severe Disabilities
For beneficiaries with severe disabilities under art. 3, paragraph 3, of Law 104/1992, the exemption threshold is raised to 1,500,000 euros, regardless of the degree of kinship. This increase is in addition to any other applicable exemptions.
How Inherited Assets Are Valued
The value of inherited assets is determined using specific criteria for each type of asset.
Real Estate
For real estate, the value for inheritance tax purposes is the cadastral value, not the market value. The cadastral value is calculated as:
Cadastral income x 1.05 (5% revaluation) x cadastral coefficient
The main cadastral coefficients are:
- Residential properties (category A excluding A/10): coefficient 120
- Offices (category A/10): coefficient 60
- Shops (category C/1): coefficient 42.84
- Agricultural land: coefficient 112.50
For example, a residential property with a cadastral income of 800 euros will have a cadastral value of: 800 x 1.05 x 120 = 100,800 euros.
Bank Accounts and Deposits
The value equals the balance on the date of death. Banks directly communicate the balances of accounts held or co-held by the deceased to the Revenue Agency. In the case of a joint account, 50% of the balance is considered (unless proven otherwise regarding different ownership).
Government Bonds
Italian government bonds (BOT, BTP, CCT) and equivalent securities are exempt from inheritance tax. This exemption also applies to government bonds issued by European Union and European Economic Area countries. Other securities and bonds are valued at market value on the date of death.
Movable Property
If the inheritance tax return does not analytically list the movable property (jewelry, furnishings, artwork, vehicles, etc.), the law presumes a value equal to 10% of the net inherited estate value. A lower value can only be declared if supported by documentation (appraisals, notarial inventories).
Real Estate Taxes: Mortgage and Cadastral
When the inheritance includes real estate, in addition to the inheritance tax, the following taxes must also be paid:
- Mortgage tax (imposta ipotecaria): equal to 2% of the cadastral value of the inherited properties.
- Cadastral tax (imposta catastale): equal to 1% of the cadastral value of the inherited properties.
These taxes are calculated on the total value of the properties in the estate, not on each heir's share. Payment is made via the F24 form at the time of filing the inheritance tax return.
The Primary Residence Relief
If at least one of the heirs intends to use the inherited property as their primary residence, they can claim the primary residence relief. In this case, the mortgage and cadastral taxes are reduced to a fixed 200 euros each (instead of 2% and 1%).
To qualify for the relief, the heir must:
- Declare in the inheritance return the intention to establish residence in the municipality of the property within 18 months.
- Not own other properties purchased with the primary residence relief.
- Not own other residential properties in the municipality where the inherited property is located.
The savings can be very significant: on a property with a cadastral value of 200,000 euros, you go from 6,000 euros (2% + 1%) to just 400 euros in fixed taxes.
The Online Inheritance Tax Return
Since 2019, the inheritance tax return must be filed exclusively online through the Revenue Agency's portal. The deadline for filing is 12 months from the date of death.
The return can be filed directly by the heirs (through the Revenue Agency website with SPID, electronic ID card, or national services card) or through an authorized intermediary (accountant, tax assistance center, notary). The online form automatically calculates the taxes due and generates the corresponding F24 payment forms.
Exemptions and Special Cases
Certain types of assets are exempt from inheritance tax:
- Severance pay (TFR) and end-of-employment benefits: benefits owed to the heirs of a deceased worker are exempt.
- Life insurance policies: capital received as beneficiaries of life insurance policies is not part of the estate and is exempt.
- Government bonds: as already mentioned, BOT, BTP, CCT, and equivalent securities are exempt.
- Cultural heritage assets: assets subject to cultural heritage protection are exempt, provided the designation is maintained.
- Businesses and corporate shares: if the heirs continue the business for at least 5 years, businesses and controlling shares are exempt.
European Comparison: Is Italy Favorable?
In terms of inheritance taxation, Italy is among the most favorable European countries. The 1 million euro exemption for spouses and children is among the highest on the continent. In France, for example, the exemption for children is only 100,000 euros with rates up to 45%. In Germany, the exemption is 500,000 euros for the spouse and 400,000 euros for children, with rates up to 30%. The United Kingdom applies a flat 40% rate on the portion exceeding a 325,000 pound exemption.
Use Our Calculator
Calculating inheritance tax requires considering the degree of kinship, the value of each asset, applicable exemptions, and any available reliefs. Our inheritance tax calculator performs all calculations in seconds: enter the degree of kinship, the value of inherited assets and any real estate, and immediately get the total taxes owed with a breakdown of every item. A simple and quick way to get a reliable estimate and plan your inheritance obligations with peace of mind.
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