Working out and paying IVIE and IVAFE

Giulia and her brother inherited a flat in Valencia, half each. Its Spanish cadastral value, as revalued under local rules, is €180,000. She also has a securities account with a bank in another EU country, worth €40,000 on 31 December. She knows something is owed in Italy, but not how much, under which tax codes, or by what date.

Valuing property abroad

IVIE is charged on the value of property located outside Italy, whatever its use. The first practical task is therefore choosing which value to use. The agency's page refers to circular 28/E of 2 July 2012 for the detail, and summarises the rule by the country in which the property stands.

For property in an EU member state, or in Norway and Iceland, where adequate exchange of information is guaranteed, the first choice is the cadastral value as set and revalued in that country for local taxes on income, on wealth, or other taxes based on property value.

Without a cadastral value, you take the cost shown in the purchase deed and, failing that as well, the market value in the place where the property stands. The same order applies to property received by inheritance or gift, for which the cadastral value remains the primary reference.

For property in any other country the order changes: the value is the cost shown in the deed or contracts and, failing that, the local market value. A villa in Thailand or an apartment in New York is therefore valued at the price paid, never at a cadastral figure.

Rate, ownership share and months held

Since 2024 the standard IVIE rate has been 1.06% of the property's value; until 2023 it was 0.76%. Anyone reusing calculations from earlier years must update them: the same house at the same value now carries a tax roughly 40% higher than it used to.

The tax is scaled to the ownership share and to the months of the year in which the property was held. A month in which ownership lasted at least fifteen days counts in full. Someone who buys on 10 March counts March; someone who buys on 20 March starts counting from April.

The 200 euro threshold works in an unusual way. No payment is due if the overall amount does not exceed 200 euros, but that amount is computed ignoring shares and holding period and without deducting tax credits. In other words, you look at the tax on the whole property for a whole year.

Even when IVIE is not paid because the overall amount is within 200 euros, the page points out that the section of schedule RW dedicated to the property must still be completed. The 15,000 euro exemption seen in the first module applies to deposits and current accounts, not to property.

A main home abroad

Not every foreign property pays IVIE. The tax does not apply to a property used as the main home, with its appurtenances, nor to the marital home assigned to a spouse after legal separation, annulment, dissolution or the end of the civil effects of a marriage.

The exemption carries a limit borrowed from Italy's own property tax: it holds only if the property, in Italy, would not fall into cadastral categories A/1, A/8 and A/9, meaning upscale homes, villas, and castles or historic palaces. For those properties IVIE remains due, but on reduced terms.

For a luxury main home the rate drops to 0.4%, and 200 euros may be deducted from the tax, up to the amount of the tax itself, scaled to the part of the year during which the property was the main home. If several taxpayers live there, the deduction is split according to each one's share.

This mainly concerns people who have come back to Italy while keeping a home abroad, or who live mostly across the border while remaining tax resident in Italy. A holiday home by the sea or in the mountains outside Italy, by contrast, is taxed at the standard rate.

Credits for taxes paid abroad

Many countries levy their own wealth tax on property. To avoid paying twice on the same value, any wealth tax paid in the country where the property stands is deducted from IVIE. The page does not provide for any foreign surplus to be refunded in Italy.

For property in the EU or in European Economic Area countries with adequate information exchange, you can also subtract any foreign income tax on the same property that could not be used as a credit against Italian income tax under article 165 of the consolidated income tax act.

In practice it is a simple subtraction: compute the Italian IVIE, take off the foreign wealth tax paid on the same property, and pay the difference if there is one. When the foreign tax is equal or higher, no IVIE is left to pay. Keep the foreign payment receipts carefully.

IVAFE on financial products

IVAFE is charged on the value of financial products held abroad, scaled to the ownership share and the holding period. The standard rate is 2 per thousand, which is 0.2%. For products held in states or territories with a privileged tax regime, listed in the ministerial decree of 4 May 1999, it has been 4 per thousand since 2024.

The value is market value at the end of each calendar year in the place where the products are held, and the foreign intermediary's or insurer's documents can be used to establish it. If the product was no longer held on 31 December, market value at the end of the holding period applies.

Listed securities are valued at their quoted price. Unlisted ones, or listed ones suspended from trading, use nominal value or, if there is none, redemption value. Where both exist, nominal value wins; where neither exists, the tax base is the purchase price.

For current accounts and savings books, IVAFE is not tied to value: as the first module showed, it is a flat 34.20 euros per account or book held by an individual, and it is not owed if the average annual balance with the same intermediary stays at or below 5,000 euros.

IVAFE also allows a credit for wealth taxes paid in the country where the assets are held, capped at the Italian tax. No credit is available where a double tax treaty gives the country of residence the sole right to tax: in that case the foreign tax must be reclaimed from the foreign tax authority.

Paying the balance and advances

IVIE and IVAFE have no calendar of their own. The agency's pages state that payment follows the same rules as personal income tax, including the amounts and dates of advances and balance. Anyone who knows the IRPEF calendar therefore knows these two taxes' calendar as well.

Under IRPEF, the previous year's balance and any first advance instalment are due by 30 June, or within the following thirty days with a 0.40% surcharge. The second or single advance is due on 30 November. The advance equals 100% of the tax declared, provided that tax is above 51.65 euros.

An advance under 257.52 euros is settled entirely in November. From that figure upwards it is divided: 40% travels with the June balance and 60% waits for 30 November. Every payment goes through the F24 form.

Applied to IVIE, those rules produce a precise timetable. A taxpayer declaring 954 euros of IVIE for 2025 in 2026, with no advances paid before, settles that sum as the balance by 30 June. As it exceeds 51.65 euros, an advance for 2026 of 954 euros is also due; being above 257.52 euros, it is split into two instalments.

The first instalment, 40%, comes to 381.60 euros and is paid by 30 June with the balance, under code 4044. The second, 60%, comes to 572.40 euros and is paid by 30 November under code 4045. The first year the tax appears therefore costs almost twice the annual tax in cash.

The tax codes appear on the agency's payment pages. IVIE also has codes reserved for fiduciary companies, 4042 for the balance and 4046 for the advance, which an individual paying on their own account does not use.

Someone who files the 730 through an employer or pension provider acting as withholding agent does not pay directly: the amounts from the return are withheld from pay or pension from July onwards. In schedule W, lines W6 and W7 are where advances paid and earlier surpluses are recorded.