Property tax exemption for separation and divorce: eligibility criteria and latest updates

Separation and Divorce: Different Rules for Property Tax (IMU)

When it comes to separation and divorce, the Property Tax (IMU) follows different rules.
One may wonder when the exemption from paying the tax applies to those who do not reside in the property because it has been assigned to the former spouse by a court order.

However, there are situations that go beyond the standard regulations, making it challenging to determine whether the tax is due or if one can benefit from the exemption.
This is where various rulings from the Court of Cassation provide vital clarifications regarding IMU for separated or divorced individuals.

IMU Exemption for Separated Spouses

The IMU regulations include an exemption from the tax for properties used as the main residence, considering it as such when the taxpayer’s family resides and has its domicile in the property.
There are few exceptions for the primary residence, with the tax only being due if the property is categorized as “luxury.”

In a significant ruling of 2023, the Court of Cassation rejected a municipality’s appeal and recognized the right to IMU exemption for a separated taxpayer who no longer resides in the owned property.
Despite the municipality claiming the tax was due due to the lack of residency, the Cassation Court had a different perspective.

The Supreme Judges based their decision on the fact that the property in question was the family home assigned to the other spouse, along with the children, as part of the separation agreement.
The Court emphasized that until the separation, the property was intended as the family home, and therefore, also for the taxpayer.

Double Exemption for Married Couples

Following a ruling by the Constitutional Court in 2022 (ruling 209), married couples with different residences now have the right to a double exemption.
Each spouse can consider the property where they reside as their primary residence.
This ruling aims to eliminate discrimination between cohabitants and married individuals with different living arrangements, ensuring equal treatment.

With a growing trend of couples living separately during the week due to work commitments, the Court’s decision reflects the evolving housing needs and the importance of recognizing diverse living situations without penalizing individuals based on marital status.

The Court of Cassation affirmed that in cases of separation or divorce, the IMU taxpayer is the spouse to whom the conjugal home is assigned by a judicial decision.
This aligns with the existing legislation and does not introduce any new norms.

Exemption for Former Spouses

Prior to the Constitutional Court’s ruling referenced by the Cassation Court, the legislative framework already exempted a spouse who had to leave the home post-separation or divorce from IMU payment on the property, even if they no longer resided there.
The obligation to pay IMU falls on the spouse maintaining the right to live in the property.

It is essential to note that the IMU payment responsibility does not always rest with the owner, as it also extends to the holder of the right to habitation, including in cases of a separated spouse.
The intended purpose is to ensure fair taxation and distribute the burden accordingly.