More on new Monti taxes (IVIE)

Just a quick update on IVIE, the new tax on property held overseas by Italian residents. As you will know, the Monti government has decided to tax all overseas property held by Italian residents at 0.76%. This is a retrospective tax and so will be charged in this year’s UNICO 2012. It affects all those resident in Italy who hold property overseas, however it may be used, meaning it includes not only includes houses kept free for use by the owner but also those rented out. There is a de minimis provision so that the tax is not payable if the total value is less than €200, but as this means a value of less than €26,000 it probably won’t be applying to many. The value is that stated on the purchase document, or failing that, market value.

One question that remains is the possibility of obtaining credit for any tax already paid on the property. The provisions state that credit will be given for any patrimonial tax paid in the country where the property is situated and for the UK, some have mentioned the possibility that Council Tax might be relevant here. The situation is unclear – the reference to patrimonial taxes basically mean taxes based on the value of the property. While the Council Tax was introduced with some broad reference to property value, it is not clear that it represents a patrimonial tax for these purposes. We live in hope that the Italian Revenue will clarify what taxes are relevant here - possibly by issuing a list of those taxes that qualify in the main European countries.

IMU - payment by instalments

You may have heard the lively discussion concerning all aspects of IMU and more recently the option for residents in Italy – an attempt to sweeten the bitter pill - that IMU should be payable in three, rather than two instalments: one in June, another in September and a final instalment in December.

But do the sums add up?

To recap, in its rather dramatically entitled “Salva Italia”  package of austerity measures, the Monti Government replaced ICI with a new tax – IMU – to be charged on all properties, with a discounted rate on main residences (prima casa) of 0.4%. All other properties (holiday or second homes/rented properties) - 0.76%. However, each Comune would be free (within certain limits) to set its own rate, which could be an increase or a deduction of the national rate.  No Comune has yet announced what they intend to charge. In view of the fact that IMU represents a new and additional burden on those with a prima casa the Government introduced the option of paying by three instalments, the first two being  1/3 of the agreed national rate and the last instalment the balance, the exact amount of which will depend on what rate the Comuni eventually resolve to charge.

But is it really a good idea to pay in three instalments?

First there is the inconvenience of having to organise an additional payment. Secondly, for many it would mean another round of bank charges.  And in any event – does it actually add up? There is after all the possibility that some Comuni will actually reduce the national rate, with some discussing a possible 0.2%. In that happy event, those paying in three instalments will find they have paid more than they needed to in the first two instalments and may even be due a reimbursement – ever tried getting a cash reimbursement from the Italian state?

Our opinion is that it is simpler to pay 50% in June and the rest, whatever that may be, in December. It is only a pity that there appears to be no option for paying the lot in one go, at least for this year. We will keep you posted.

Understanding IMU

Calling all those owning property in Italy. Have you heard about IMU? This year it replaced the ICI council tax. And the bad news is that while most property owners were exempt from ICI on their first house (prima casa), IMU applies to all properties, prima casa or not. Which means that if you have property in Italy, you need to be paying IMU.

Another difference is in the definition of "resident". For ICI it seemed to be enough that you were registered with your local Anagrafe. With IMU you not only have to be registered with the Anagrafe, but you need to live in your Italian property habitually. So if your property is just your holiday home, you won't be eligible for the discounted rate of IMU.

And if you do still count as resident, do you know if your property is made up of more than one unit? It's important to know because the discounted rate of the new IMU tax applies only to one property unit. This  means that if your property is registered at the Catasto as more than one unit (and many are) you will only get the discounted rate on part of your property, and will have to pay the full rate on the rest. How do you find out? If you send us your codice fiscale, we'll send you your land registration certificate at cost price.

Contact us here

Warning - do you rent out your property in Italy?

A note to the very many owners of property in Italy who occasionally rent them out. Following the new agreements between the Agenzia delle Entrate and various Comuni (see our recent article in Latest News) the Comuni have been directed to look particularly closely at those who run B&B or other rental activities in their territory. Very often what the owner considers to be a casual arrangement would be viewed by the Agenzia as a permanent and organised activity requiring a VAT number and the payment of taxes in Italy. All it takes is an imprudent advert on the internet or a visit from the vigili urbani and the unwitting property owner can come under the spotlight of the Agenzia, something in general to be avoided.

Our advice is - get this sorted out now. If you're unsure of your position ask us for advice.