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New Local Lodging Regime

The IRS 2021 tax return has a new feature regarding the real estate allocation regime.

What’s new?

The 2021 state budget brought news regarding the calculation of capital gains and capital losses arising from the allocation of real estate. There is now the necessity to choose between one of the two capital gains calculation regimes.

The differences between the two regimes

The difference between the two regimes may raise many doubts among taxpayers, so we will try to simplify the issue. Starting with the previous regime, the taxpayer who wanted to disaffect a property from the professional sphere and allocate it to his personal patrimony would have to immediately calculate capital gains. In other words, under the old regime, a property that had a value of 150.000€ at the date of allocation and a value of 200.000€ at the date of disaffection results in a capital gain of 50.000€ that would be taxed under Category B

On the other hand, the new regime stipulates that if a property is transferred from the professional sphere to the personal sphere, no capital gains will be calculated, except if the taxpayer sells the property within 3 years of the transfer, in which case the capital gain would be taxed under Category B. If the sale takes place after the 3-year period, the capital gains will be taxed under Category G.

If you wish go obtain more information about this matter, please contact us.