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.