Bullet guide to property value tax (IVIE) on properties located abroad and opportunities for LTDs

IVIE, tax on the value of properties located abroad: here is a brief guide to understanding how this tax works, which must be paid by individuals residing in Italy who own properties abroad (including the UK), regardless of their intended use.

Who has to pay IVIE?

• owners of buildings, building land, and land for any use, including land that is instrumental by nature or by destination for business or self-employment activities;
• holders of real rights of usufruct, use or habitation, emphyteusis and surface rights on the same;
• concessionaires, in the case of concessions of state-owned areas;
• lessees, for properties, including those to be built or under construction, granted under financial leases.

The tax does not apply:

• to the ownership of properties used as a main residence (and related appurtenances);
• to the marital home assigned to the spouse following legal separation, annulment, dissolution, or termination of the civil effects of marriage, which in Italy are not classified in cadastral categories A/1, A/8, and A/9;
• to British limited companies (Ltd) owned by Italians, which own properties in the United Kingdom or abroad: in this case, Ivafe (tax on financial assets held abroad) will be payable on the value of the shares. If, on the other hand, the structure is configured as an intermediary, the property tax is levied on the Italian partner.

Setting up a Ltd company is therefore an opportunity that can be easily realized through our agency, Welcome Home.

• In a Ltd, the shareholders are not directly liable for the obligations contracted by the company: this means that any debts contracted by the company do not affect the personal assets of the shareholders;
• It takes very little to get started: the minimum capital required to set up a LTD is £1.
• The process is smart: no notary or chamber of commerce is required, everything is done with Welcome Home in just a few days.

All Italians who want to start a foreign startup or expand their business beyond national borders can benefit from this.

For the record, Brexit has changed the rules governing the determination of the IVIE tax base since 2021, therefore the following must be applied:

• the value of the property, consisting of the cost resulting from the deed of purchase or contracts and, failing that, the market value ascertainable in the place where the property is located;
• in the case of properties whose ownership derives from purchase (i.e., a higher tax base than the previous council tax);
• for situations other than ownership, such as usufruct, donations, inheritances, or constructed properties, the reference value must be identified in the legislation of the country where the property is located, therefore without any changes with respect to Brexit.

Contact Welcome Home to stay up to date on your investment in London