Buying Dubai property from Italy: the treaty stops short of IVIE

Residence comes first, and the test is new. Article 2 of the TUIR was rewritten by Legislative Decree No. 209 of 27 December 2023 with effect from the 2024 tax period. Under the amended paragraph 2 a person is resident where, for the greater part of the tax period and counting fractions of a day, they have Civil Code residence or domicile in Italy, or are simply physically present there. Domicile is now the place where personal and family relationships principally develop, and anagrafe registration raises a rebuttable presumption. Article 3 then taxes a resident on worldwide income.

Dubai rent does not enter the return as Italian property income. It falls outside redditi fondiari, which run on cadastral values Dubai does not have, and into article 70, paragraph 2. Where the foreign state taxes the income you take its own net assessment. Where it does not, and the UAE does not tax an individual’s rent, the taxable amount is gross rent received less a flat 15 per cent notional deduction. That 15 per cent is the whole deduction: no relief for interest, agency fees or service charges. The net figure joins your income at ordinary IRPEF rates.

Article 67, paragraph 1(b) taxes as redditi diversi the gain on a transfer for value of real estate acquired or built within the preceding five years. It carries no territorial limit and reaches a foreign property sold by an Italian resident, so a Dubai flat sold inside five years produces a taxable gain, price less cost and documented improvements, at progressive rates. Two exceptions sit in the article: property received by inheritance, and property used as the principal residence of the seller or the family, which the Court of Cassation decided in May 2025 turns on actual use rather than registration.

After five years no gain arises under that provision at all, so the holding period is the most valuable planning fact here. One thing we cannot tell you is whether the substitute flat rate an Italian seller can elect at a notarial deed reaches a sale completed in Dubai. We found no authority either way, so put that question to a commercialista.

The convention was signed in Abu Dhabi on 22 January 1995, ratified by Law No. 309 of 1997 and in force from 5 November 1997. Article 6 gives income from immovable property to the state where it sits, and article 13, paragraph 1 does the same with the gain on selling it. Article 23, paragraph 2 sets out what Italy does with that: it may include the income in its own base and must allow a deduction for the UAE tax paid, capped at the Italian tax attributable to it. The UAE levies nothing on an individual, so the credit is nil and the Italian charge applies in full. The treaty allocates a concurrent right to tax rather than exempting Italy.

The more important line is article 2. The Italian taxes covered are IRPEF, IRPEG or its successor IRES, and the former local income tax ILOR. No wealth tax and no inheritance tax appears, unlike the France to UAE convention, where article 2, paragraph 1(a) names both. That is not a gap in our research but a gap in the relief: IVIE and Italian succession duty get nothing from this treaty.

IVIE, the tax on the value of property held abroad, is charged on an Italian resident’s foreign real estate by reference to purchase cost, pro-rated by ownership share and by the months you held it. The rate was 0.76 per cent through 2023 and 1.06 per cent from 2024, so an older figure is stale. No tax is due where the computed amount is 200 euros or less, and a qualifying foreign main home can be exempt. Luxury properties are an exception; neither personal occupation nor a marketing label establishes eligibility. A Dubai investment flat is not a main home merely because you own it. On roughly 701,500 euros of purchase cost, 1.06 per cent is about 7,400 euros a year. Read that as an illustration rather than a fixed annual bill: the price you paid is in dirhams, the tax is computed in euros, and the Agenzia page we read sets the base by reference to purchase cost without telling us which rate converts it in each later year. Your commercialista fixes that; a projection that treats the euro base as frozen at completion is assuming something we cannot source.

The property is disclosed in quadro RW, the fiscal monitoring section of the Redditi return: an annual duty attaching to the holding rather than the income, so it runs in a year when the flat sits empty. If you file the simplified form 730 rather than Redditi, the same information goes in that form’s own monitoring section, quadro W, which since 2024 carries foreign assets and IVIE for 730 filers; our sources did not cover that form, so confirm which box you are filling with your commercialista. We do not print the monitoring penalty band here either, because the current range could not be verified against the statute.

We found no exchange control and no Italy specific declaration attaching to an outbound bank transfer made to buy foreign property. That is what we could not find rather than a verified negative: we did not confirm the absence against a Banca d’Italia page, so check it with your bank. What plainly does exist is the annual quadro RW disclosure above, a report on the asset rather than a permission for the transfer. In practice the control is anti-money-laundering diligence, run twice: the Italian bank asks where the funds came from, and the Dubai bank, developer or trustee asks again. That file, not the wire, is what takes time.

Italian law reserves a fixed share of the estate for the spouse, the children and, failing them, the ascendants: the legittima. We do not print the fractions here, because we could not verify the article numbers and shares against the statute, and a wrong fraction in an estate plan is worse than none. Take them from a notaio. EU Regulation 650/2012, governing deaths from 17 August 2015, applies the law of habitual residence at death unless the person has chosen the law of their nationality, so an Italian resident who does nothing has Italian law and the legittima applied to the whole worldwide estate.

For the Dubai asset, a non-Muslim owner can register a will with the DIFC Courts Wills Service, established by DIFC Resolution No. 4 of 2014 and reaffirmed by Dubai Law No. 15 of 2017, which governs the UAE situated asset under DIFC probate. What it does not do is displace a legittima claim against the worldwide estate under the Regulation. And on tax, remember article 2 of the convention: Italian succession duty is not a covered tax, so the treaty gives no relief against it.

The rate carries a warning. The Central Bank of the UAE’s own rate page returned an HTTP 403 error to us on 10 September 2026, as it did for our Germany guide, so the figure below is an aggregator’s republication of Central Bank data: check it live. At roughly 4.27666 dirhams to the euro on 9 September 2026, AED 3,000,000 is about 701,480 euros.

The transfer fee of 4 per cent adds AED 120,000, about 28,060 euros; the trustee fee is AED 4,000 plus 5 per cent VAT, so AED 4,200, with AED 250 for the title deed and AED 10 each for knowledge and innovation. Registration is therefore about AED 124,470, roughly 29,100 euros, for AED 3,124,470 all in, about 730,600 euros before commission or financing. Those lines come from the Land Department’s own Property Sale Registration page, read on 10 September 2026; the trustee will still quote them to you on the day.

One Italian point, stated no further than the Agenzia’s own page goes: IVIE is charged by reference to the purchase cost, not to a current valuation. What that page does not tell us is how a cost recorded in dirhams becomes the euro base year after year, and it is a real question, because the euro figure for a fixed dirham price moves with the exchange rate. Do not assume the number at completion is frozen for as long as you own the flat: ask your commercialista which rate the base takes each year. Model the purchase on the cost of buying calculator, check the residence threshold on the golden visa calculator, and see what is selling in the off-plan catalogue.

Foreign ownership is a carve-out, not a general right. Article (4) of Law No. (7) of 2006 restricts ownership to UAE and GCC nationals and companies wholly owned by them, then permits freehold for non-UAE nationals “in certain areas determined by the Ruler”, and Regulation No. (3) of 2006 sets those areas by numbered land plot, not by the name a development is marketed under. Off-plan instalments sit in an account which Article (9)(1) of Law No. (8) of 2007 requires to be “dedicated exclusively to the construction of that Real Estate Development project”: ring-fencing, not a refund guarantee.

The Land Department publishes its transfer fee as 2 per cent from the seller and 2 per cent from the buyer, so a buyer carrying all 4 per cent is market practice, not the published rule. On residence the two government sources agree on the money and differ on the term: the portal states five years for a “Minimum capital of AED 2 million”, the ICP service page ten years for ownership worth at least AED 2,000,000, about 467,650 euros at the rate above.

No quadro RW penalty band appears above, because the current range could not be verified against the statute, and no legittima fraction, because the Codice Civile articles were not read on the day. We do not say whether the substitute flat rate available at an Italian notarial deed reaches a foreign sale, and we do not say that no Italian declaration attaches to an outbound wire: that is an absence we could not confirm against a Banca d’Italia page, not a verified negative. Nor do we say how a dirham purchase cost is converted into the euro IVIE base in later years.

The TUIR articles behind the rent and the gain were read from a third party republication standing in for normattiva.it, and the euro rate is an aggregator’s republication of Central Bank data, because the Bank’s own page returned an HTTP 403 error to us. We print no golden visa duration as settled, because two government pages give different ones, and we do not say that any named development is freehold: the 2006 Regulation designates numbered plots, not project names. Ask us and we will trace a project.