Studio PonchioSTP
Rent arrears after eviction for non-payment: how they are taxed
Rent that is never received need not be taxed indefinitely. Confirmation of an eviction order for non-payment marks the dividing line and opens the way to a tax credit.
For residential property, rent that is not received ceases to form part of taxable income from the moment the eviction for non-payment is confirmed by the court or a payment order is issued. This is a departure from the principle that income from land and buildings is taxed on an accruals basis, regardless of whether it is collected.
The tax credit
Where tax has already been paid on rent that accrued but was subsequently never collected, a tax credit is available equal to the tax paid on the unreceived rent, to be claimed once the failure to collect has been conclusively established in the court proceedings.
Mind the conditions
The relief presupposes a court order: until the eviction is confirmed, the rent remains taxable. A distinction must also be drawn between residential letting and the letting of business premises, which is governed by different rules. Keeping the paperwork in order is decisive if you are not to pay tax on income you never received.
- Art. 26 TUIR – attribution of income from land and buildings and rent not received.
- Agenzia delle Entrate guidance on the tax credit for uncollected rent.