What is IVIE?
IVIE is a tax on the value of properties located abroad owned by individuals and companies resident in Italy.
More specifically, IVIE is an Italian property tax that is applied as a percentage of the cadastral value where possible, or on the value of the property as recorded in the deed or derived from a property appraisal.
Please note: since 2020, in addition to individuals, non-commercial entities and simple partnerships, general partnerships, and limited partnerships resident in Italy are also subject to taxation and are required to declare their investments and assets in accordance with Article 4 of Decree Law No. 167/1990 (so-called tax monitoring).
How much is IVIE today and how is it calculated?
Currently, IVIE is calculated at a fixed rate of 1,06% of the cadastral value in Spain, Portugal, etc., and on the value stated in the deed or real estate appraisal in England, where the land registry reports the transaction value on the date of purchase.
IVIE calculation via land registry.
- If the property was purchased before 2015, it is possible to fall back on that “certain” value and make the calculation via the land registry.
IVIE calculation via property appraisal.
- If the current value of the property differs significantly from the purchase value, as has been the case in recent years: due to rising interest rates, recession, and Brexit, property values have fallen, returning to the historic peak growth year of 2015.
This could be the case for a purchase made in 2019 before Covid, followed by the pandemic, Brexit regulations and recession. A property purchased for £1 million could now be worth £850K, i.e. 25% less than the purchase price.
Example of IVIE calculation on a three-bedroom property in London to date, to be included in the RW section.
Two bedrooms and kitchen in London in the South Kensington area: purchase value £1,000,000 * 0.76% = £7,600 to be paid (annually).
“2024 Budget” possible increase in IVIE from 0.76 to 1.06%
The tax burden on properties held abroad is therefore increasing with the IVIE – similar to the IMU – rising from 7.6 per thousand to 10.6 per thousand, a jump of almost 40%. The note can be found in Article 23 of the draft budget law, entitled “Measures to combat tax evasion and rationalize credit compensation and financial seizure procedures” – 2024 budget.
Trust Welcome Home as your consultant to determine the fair value of your property for IVIE calculation purposes.
Source: Savillis Research
Our team has been assisting its clients for years by producing certified real estate appraisals for IVIE calculation purposes.
Welcome Home monitors the market every quarter by analyzing the major operators in the sector and defines the right price for real estate values based on market fluctuations.
If you also own a property in London and would like to know its value, please feel free to contact us for an accurate valuation and expert advice.
