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Working out and paying IVIE and IVAFE
The module’s worked examples, then cases to attempt before revealing their solution · 5 sections · 478 words · 5 min
Worked example
A purchase in mid-year
Marco buys a flat in Lisbon outright on 5 September 2025, with a cadastral value of 60,000 euros. September counts in full because he held the flat for more than fifteen days, so there are four months. A full year's tax would be 60,000 × 1.06% = 636 euros, above the threshold; for four twelfths Marco owes 636 × 4 / 12 = 212 euros.
Worked example
Two co-owners and the threshold
Two brothers each own half of a studio in Portugal with a cadastral value of 30,000 euros. The tax on the whole property for the full year is 30,000 × 1.06% = 318 euros, above the 200 euro threshold. Each brother therefore pays his half, 159 euros, even though his own share is below 200 euros: the threshold is measured on the whole.
Worked example
Living in a villa abroad
Elena, resident in Italy, lives all year in a villa she owns in France that would be category A/8 in Italy, with a local cadastral value of 250,000 euros. The tax is 250,000 × 0.4% = 1,000 euros; after the 200 euro deduction for twelve months, Elena pays 800 euros of IVIE.
Worked example
Securities sold before year end
Anna holds a foreign portfolio for six months and sells it on 30 June, when it is worth 50,000 euros. Since she no longer owns it on 31 December, she uses its value at the end of the holding period. IVAFE follows the holding period: 50,000 × 0.2% = 100 euros for a full year, so about 50 euros for the half year she held it.
Practical case
Giulia's bill
Throughout 2025 Giulia owns 50% of a flat in Valencia that is not her main home, with a revalued Spanish cadastral value of 180,000 euros; she paid no wealth tax in Spain. For the whole year she also holds a securities account in an EU country without a privileged tax regime, worth 40,000 euros at market value on 31 December, and a foreign current account with an average balance of 8,000 euros. How much IVIE and IVAFE does she owe?
Hint: For IVIE, test the threshold on the whole property first, then apply her share. For IVAFE, separate the securities, which carry a rate, from the current account, which carries a flat charge.
Show the solution
IVIE: on the whole property for the full year the tax would be 180,000 × 1.06% = 1,908 euros, above the 200 euro threshold, so it is due. Giulia's share is 50% for twelve months: 1,908 × 50% = 954 euros. IVAFE on the securities: 40,000 × 0.2% = 80 euros. IVAFE on the account: the average balance exceeds 5,000 euros, so 34.20 euros are added. Total IVAFE: 80 + 34.20 = 114.20 euros. Both are paid under the income tax rules, with codes 4041 and 4043 for the balance.
Answer: 954 euros of IVIE and 114.20 euros of IVAFE
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