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Real Estate Tax Increase for Italian owners: What is the IVIE tax base for properties owned in the UK?

Real Estate Tax Increase for Italian owners: What is the IVIE tax base for properties owned in the UK?
On the 1st January 2021 the UK left the EU. There will be various tax changes and implications following Brexit.

Here we analyse the case of property owned by Italian Citizens in the United Kingdom for the purposes of IVIE Taxation, with the response of the Revenue Agency following the Telefisco 2021 event on the 28th January, organised by the Italian daily financial newspaper IlSole24ore.

It transpired that, from the 1st January 2021, for the purposes of IVIE taxation, for properties owned by Italian Citizens in the United Kingdom, the criteria of cadastral value will no longer be valid, but instead that of the purchase cost or market value.

It should be noted that the Memorandum No 28 of 2012 stated that for properties located in EU countries or in countries belonging to the EEA European Economic Area, which guarantee an adequate exchange of information, the cadastral value should primarily be used for the purpose of calculating tax.

 Following the UK’s exit from the EU, the agency has made it clear that instead of the cadastral value as set out in the Memorandum, for properties owned in the UK it will no longer be admissible to use the value for IVIE purposes as determined for the purposes of Council tax, but the following will become applicable:

  • The purchase price
  • Or the market value


What is IVIE?

The tax on the value of foreign properties payable by natural persons residing in Italy, who own real estate abroad, for any intended use, in particular:

  • Owners of buildings, industrial estates and land intended for use for self- employment or business;
  • Holders of rights of usufruct, use or dwelling, long-term lease and land thereon;
  • holders of concessions, in the case of state-owned areas;
  • Tenants for buildings whether built or under construction and leased financially.

Attention should be paid to the fact that from the 1st January 2016, tax does not apply to the possession of property used as the main dwelling, and to the marital home assigned to the spouse following a legal separation, annulment, dissolution or termination of the marriage, which in Italy are not classified in the cadastral categories A/1, A/8 and A/9.

For further information on the changes in taxation generated by the UK’s exit from the EU, please read the book published by Sole 24 ore “Brexit, istruzioni per l’uso” HERE.

  • Alessandro Belluzzo
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Belluzzo International Partners è una boutique professionale multidisciplinare, internazionale e indipendente che eroga consulenza negli ambiti Wealth, Law, Tax, Finance.
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