Italian Tax

IVIE & IVAFE – Wealth Tax on Foreign Property

Increase in IVIE

The Government has proposed an increase in the rate of IVIE , the equivalent of IMU for property owned abroad.

Under the proposal the rate will increase probably with effect from Financial Year 2024 from 0.76% to 1.06%, an increase of almost 40%. 

The proposal is now subject to Parlaimentary debate and approval . 

Table of Contents

Italian Reporting Obligations and Wealth Taxes on foreign (non Italian) property

Italian resident taxpayers who own real estate, bank accounts, valuables and financial investments outside Italy are required:

  1. to report these assets in their annual tax return (the Section RW); and
  2. account for the two wealth taxes:
  • the real estate wealth tax – IVIE (Imposta sul valore degli immobili situati all’estero); and
  • the tax on financial investments – IVAFE (Imposta sul valore delle attività finanziarie detenute all’estero)

which are both  taxes due on the capital value of assets held, or deemed to be held, outside Italy.


The objective of the legislation

The intention of the legislator in introducing these taxes is:


1) to track foreign assets held by residents of Italy in order to combat tax avoidance and other financial crimes through the use of offshore (non Italian) structures and investments; 


2) to reduce the scope for any discrimination against the ownership of assets situated in Italy (which are subject to stamp duties, property ownership tax and other indirect taxes) in favour of investment in assets abroad, which might be exempt such taxes.



These reporting obligations and taxes apply even where assets are beneficially owned via an agent,  through a trust or other entity (for example, a foundation) acting as nominee.


Tax return reporting and compliance

Reporting Foreign Assets

The two taxes are closely linked the to the foreign asset reporting requirements contained in Form RW in the annual Italian tax return Form 730 or PF “Unico”). This is the section of the tax return in which a resident taxpayer (who does not have the benefit of a statutory exemption) needs to disclose the ownership and value of foreign real estate, bank accounts, and “foreign assets of a financial nature”.

The term “foreign assets of a financial nature” is interpreted widely by the Italian Tax Agency as evidenced in the tables of codes to be used  for reporting the asset in the instructions to the annual tax return. These are the various categories to be reported:


  • Shares In The Capital Or Equity  Of Non-Resident Companies
  • Foreign Bonds And Similar Securities
  • Foreign Securities And Certificates Issued By Non-Residents
  • Foreign Currencies On Deposit And Current Accounts
  • Italian Public Securities Issued Abroad
  • Contracts Of A Financial Nature Concluded With Non-Resident Counterparties
  • Life Insurance And Capitalisation Policies
  • Derivative Contracts And Other Financial Transactions Concluded Outside Italian Territory Of The State
  • Precious Metals In Unwrought Or Monetized State Held Abroad
  • Participations In Trusts, Foundations Or Other Legal Entities Other Than Companies
  • Pension Funds Managed By Foreign Entities
  • Other Financial Instruments, Including Those Of A Non-Participating Nature
  • Other Foreign Financial Assets And Virtual Currencies
  • Immovable Property
  • Registered Movable Property (e.g. Yachts And Luxury Cars)
  • Works Of Art And Jewellery
  • Other Assets
  • Foreign Immovable Property Used As Main Residence
  • Foreign Securities Deposit Accounts
The requirement to report the existence of the asset is different, and  wider, than the requirement to pay tax.  The tax is only due on real estate, bank accounts and “financial products”. By financial products the intention is to only tax assets that are capable of producing income which is taxable in Italy in the hands of Italian tax residents.  For assets held in other EU countries tax should only be payable where there is an analogous Italian tax where the financial products are subject to stamp duty in Italy, such as bank accounts and financial investments. The tax return contains a box which should be checked where exemption from tax is being claimed.

Reporting Exemptions

Assets which are held via an Italian intermediary such as an Italian resident bank or authorised financial institution do not need to be reported in the owner’s annual tax return, since the bank or financial institution will report the ownership information directly to the Italian Tax Agency.

Exemption from the obligation to disclose the assets and pay the tax applies, inter alia to individuals to whom, for any tax year, either of the two following regimes apply:

  • the 7% flat tax regime for pensions who transfer their residence to a qualifying municipality in Regions of the South or Central Italy, or
  • the annual Euro 100,000 flat tax regime applicable to non Italian source income.

If a taxpayer is not required to file an annual Italian tax return, e.g.  because they are under the threshold limits or all their income has been taxed at source, they still need to file an return – section RW – to report any  foreign assets and account for any tax.

Payment Deadlines

The payment of IVIE and IVAFE must generally  be made at the same time as personal income tax liabilities arising from an annual tax return.

Therefore, in general, on or before the 16 of June each year the taxpayer needs to pay the balance of the IVIE/IVAFE tax due for the previous year plus a payment on account of the current year liability (approximately 40% of the prior year liability. The second instalment equal to approximately 60% of the prior year liability must be paid on or before 30 November.  It is possible to reduce payments on account where assets have been disposed of thus reducing the potential tax liability.

Note that the deadlines for payment and the actual amounts can be subject to last minute change. Certain threshold and exemptions for small amounts apply.


The Italian penalty regime is complex, and penalties for failing to report and pay any tax due are steeep.  Given that the reporting and payment obligation arise each year, it is possible that penalties will be applied for each year that remains open to assessment. This could mean penalties are applied for up to seven tax years.

For any year that an asset that should have been reported but has not, a penalty of  up to 3% of the value of any asset not disclosed can be applied.  The rate is 6% for assets held in tax havens. 

For unpaid tax the penalties can be as much as 100% of the tax not paid, although it is usually possible to reduce these penalties by prompt payment following a Tax Agency audit or enquiry. 

Further penalties can be applied where no tax return has been filed or where the Tax Agency consider that a return that has been filed is “untrue”.

Where a taxpayer realises that for prior years foreign assets have not been reported correctly or tax not paid, it is worth considering voluntary disclosure under the “ravvedimento operoso” rules.

Rates of Tax

IVIE is payable at the rate of 0.76% of the value as defined below.  The rate is reduced to 0.4% for buildings used as a main residence. There is also a deduction of a maximum of Euro 200 per annum.

The Taxable Base – the “Value” for Tax Purposes

Tax base/value of real estate abroad 

The taxable amount varies according to the State in which the property is situated.

Properties located in the EU/EEA

For properties located in countries inside the European Economic Area the value to be used is the land registry value, as determined under the rules of the country in which the land is situated.  If there is no land registry value (e.g. in France, or the Republic of Ireland) then reference must be made to the cost as shown in the deed of purchase and if there is no information regarding the cost, then market value should be used.

Properties situated in other states

For other countries, the taxable amount is the cost as shown in the deed of purchase or by agreement or, failing that, by the market value. If the taxpayer is not able to demonstrate what the purchase price actually was, for example because deeds or title documents have been lost then the Tax Agency can apply the current market value. 

Lesser Rights Over Land

If the resident taxpayer has a right over property other than full legal title (e.g. a long lease, a registered licence to use or occupy), the value should be based on the value shown in any purchase contract or the relevant regulations or criteria established by the legislation of the country where the property is located.

Real estate acquired by gift or donation

For property acquired by inheritance or donation, the value to be used is the value shown in the declaration of inheritance or in a deed of gift in the manner provided for under foreign rules. In the absence of evidence of the acquisition value the market value must be used.

Excluded assets

From 1 January 2016, IVIE will not apply to the possession of the main and appurtenances thereto and the marital home assigned to a spouse, as a result of legal separation, annulment, dissolution or termination of the civil effects of marriage.

Credit for foreign taxes

If a “similar” capital tax is paid in the foreign country, it is possible to claim credit for the tax. The credit cannot in any case exceed the tax payable in Italy.

By “similar” the legislator intends a wealth tax  – a tax on the ownership or possession of property but not a tax payable in consideration of the provision of services by any governmental or local authority.  So for example the Italian authorities have determined that UK council tax is not a wealth tax but a tax paid in consideration of the provision of services.

No credit is available if the country in which the financial asset is held has an agreement with Italy for the avoidance of double taxation which covers (which also covers wealth taxes) and which provides that this kind of tax is due only in the country in which the taxpayer is resident. In such cases the Italian resident taxpayer may,  according to the Italian Tax Agency,  have a right of refund from the country where the asset is located.

Relevant Legislation and Guidance


The reporting obligations (for the purposes of “monitoraggio fiscali“) are contained  in art. 4 of  Decree-Law No 167 of 28/06/1990 published in the Official Gazette no. 151 of 30 June 1990 enacted by  law n. 227 of 04/08/1990.

IVIE & IVAFE were  introduced into Italian law by Art. 19, paragraphs 13-21, D.L no. 201/2011 (“Monti Decree”) converted into law by L. 214/2011.

Article 8, paragraphs 16 and 17, of Decree-Law No. 16 of 2 March 2012 with further amendments made upon conversion by Law No. 44 of 26 April 2012 enacted further changes to the rules.

Tax Agency Guidance

Order of the Director of the Revenue Agency of 5 June 2012

Tax Agency Circular 28/E of 2 July 2012 – Main circular explaining the functioning of the two taxes

Tax Agency Circular 48/E of 21 December 2012

Resolution 27/E 19 April 2013 – tax payment codes

Tax Agency Website (in Italian)  – IVIE

Tax Agency Website (in Italian)  – IVAFE

Tax Agency Instructions for the compilation of the annual income tax return (FY 2022×2021)


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