IVIE tax on the value of properties located abroad
Non-commercial entities, simple companies and natural persons tax resident in the country are required to fiscally monitor real estate held abroad and to pay the Tax on the Value of Real Estate Abroad (IVIE). This obligation involves filling out the RW form in the Income form, and failure to adhere to these rules entails administrative sanctions.
The legislation, introduced with Legislative Decree no. 167/90 and subsequently converted into Law no. 227/90, imposes on natural persons, simple companies and resident non-commercial entities the obligation to annually declare the possession of properties abroad through the RW framework. This declaration is an integral part of the tax return, the Personal Income model, and represents a tool for fiscal monitoring of such assets outside national borders.
The IVIE, equivalent to the Single Municipal Tax (IMU) for real estate in Italy, is a property tax of 1.06% (from 2024 reduced to 0.76%) on the value of real estate abroad, for any use intended.
The calculation of the IVIE is based on the share of ownership of the property and the months of the year in which the possession continued. The taxable base of the tax, which must be declared in the RW part, can be determined through the purchase cost, the construction cost or the market value of the property held abroad.
The IVIE provides some concessions for properties located in countries of the European Union or the European Economic Area which guarantee an adequate exchange of information. In these cases, it is possible to use the cadastral value of the property as the taxable base for calculating the IVIE.
The IVIE deductible is 200 euros, and the tax is not due if the amount does not exceed this threshold. It is also possible to deduct a tax credit equal to the amount of property tax paid in the foreign country where the property is located.
For the payment of the IVIE, specific tax codes are used with the F24 form, and the liquidation and payment must follow the provisions established for income taxes. Properties abroad must be included in the calculation of the value of the real estate assets for ISEE purposes, and must be declared to obtain Citizenship Income (RdC).
Filling in the RW form requires attention to detail and the correct indication of information such as the title code and 23 other fields that concern the ownership of the property held outside national borders. Correct adherence to these procedures is essential to avoid sanctions and benefit from the benefits offered by voluntary reform in the event of errors or omissions.
Failure to declare properties located abroad in the RW framework entails the application of administrative sanctions. These sanctions are of two types:
Penalty for failure to monitor tax:
From 3% to 15% of the amounts not declared ordinarily.
From 6% to 30% if the violation concerns foreign investments held in non-cooperative countries.
Administrative sanction for late payment:
In the case of late payment of the Tax on the Value of Property Abroad (IVIE), the administrative fine is 30% of the value of the tax.
If the taxpayer decides to independently remedy the violation associated with the failure to indicate foreign properties in the RW part, he can avail himself of the favorable discipline of voluntary repentance referred to in article 13 of Legislative Decree no. 472/97. Using this tool allows a significant reduction in the amount of administrative fines compared to those that could be applied by the inspection office during checks.
It is essential to promptly identify any errors made and prepare supplementary tax returns to correct the situation, taking advantage of the possibility of paying reduced penalties through voluntary repentance. This practice allows the taxpayer to resolve the violation collaboratively, reducing the financial burden resulting from administrative penalties.
