Italian tax residents may owe IVIE on foreign real estate and IVAFE on foreign financial products or current accounts. Reporting those holdings is a separate obligation. The bank-account thresholds, valuation rules, ownership share and foreign tax credits must be checked before calculating what is payable.
Updated 24 September 2026. The ordinary IVIE rate is 1.06%; ordinary IVAFE on financial products is 0.20%, rising to 0.40% for qualifying products in jurisdictions identified by the applicable Italian list. Current accounts and savings books follow the separate fixed-tax rules below. A return filed in 2026 generally reports the 2025 tax year.
For the documents needed to apply these rules, use our foreign accounts, investments and property checklist. It covers average balances, ownership, valuation dates, foreign tax certificates and secure handover to an adviser.
What Are IVIE and IVAFE
IVIE is the Imposta sul valore degli immobili situati all'estero: a tax on qualifying foreign real estate. IVAFE applies to qualifying foreign financial products, current accounts and savings books. Their principal statutory basis is article 19 of Decree-Law 201/2011, as amended.
Neither tax replaces the taxation of income produced by the asset. A rented apartment can create both an IVIE question and a rental-income question. A portfolio can create IVAFE obligations alongside separate treatment of dividends, interest or gains. Do not assume all investment income is taxed through the ordinary IRPEF brackets.
The reporting framework is article 4 of Decree-Law 167/1990. Individuals use Quadro RW in Redditi PF, or Quadro W in the 730 where that return is appropriate. There is no “Quadro RW of the 730”.
Monitoring, asset taxation and income taxation overlap but are not identical. In particular, an exemption from an asset tax does not automatically remove monitoring, and a bank-account monitoring exception does not necessarily remove IVAFE.
Who Has to Pay: Italian Tax Residents with Foreign Assets
Start with the person's Italian tax residence for the relevant tax year, not citizenship or the date of opening an Italian bank account. Registration with the anagrafe is not the only residence criterion, and moving mid-year does not automatically create a split tax year.
For an Italian-resident individual, review:
- Property ownership and other relevant real rights abroad.
- Foreign current accounts, savings books and financial products.
- Joint holdings, beneficial interests and arrangements involving companies or trusts.
- Applicable exemptions, special regimes and the treatment applied by any Italian intermediary.
Reporting can also extend to some assets or interests that do not themselves bear IVIE or IVAFE. Conversely, crypto-assets have a separate tax on their value, rather than simply being ordinary IVAFE items. Foreign pensions and insurance policies require classification from their actual terms; treating every overseas retirement product identically is unsafe.
Italian assets are not foreign assets for these taxes. They may instead be subject to domestic taxes such as IMU or stamp duty, depending on the asset and circumstances. Non-residents generally do not owe IVIE or IVAFE merely because they own an Italian property.
IVIE 2026: The Tax on Foreign Real Estate
The ordinary rate is 1.06%, following the increase effective from 2024. The correct taxable value depends on the property's location and documentation.
| Property situation | Valuation approach |
|---|
| Qualifying EU/EEA property | Relevant foreign cadastral value takes priority; acquisition cost and then market value are fallbacks where the preceding basis is unavailable |
| Other countries | Cost documented in the acquisition deed or contracts; local market value where that cost is unavailable |
| Inherited or gifted property | Apply the specific succession/gift valuation rules and retain the underlying documents |
| Jointly owned property | Apply the correct value, ownership share and holding period without reducing the share twice |
The rule is not “choose whichever is lower”, nor automatically “use the higher of purchase price and market value”. An outstanding mortgage is not a general deduction from the IVIE base.
IVIE is normally proportionate to ownership and months of possession; a month with at least 15 days of possession counts in full. The €200 non-payment test is applied to the relevant gross annual tax without first reducing it for ownership share, holding period or credits. Monitoring obligations must be considered separately.
The Agenzia delle Entrate also provides a main-residence exemption, subject to its conditions and the exclusion for properties corresponding to Italian categories A/1, A/8 and A/9. For qualifying high-value main residences, a 0.40% rate and the relevant €200 deduction can apply. A holiday home is not automatically a main residence; establish actual use and classification.
Source: Agenzia delle Entrate — IVIE taxable value, rates and exemptions.
IVAFE 2026: The Tax on Foreign Financial Assets
The ordinary annual rate on qualifying financial products is 0.20%, proportionate to ownership and days held. Listed products normally use their market value at year-end, or at the end of the holding period if disposed of earlier. Unlisted products follow the applicable nominal-value, redemption-value and acquisition-cost hierarchy.
| Holding | Treatment to assess |
|---|
| Foreign current account or savings book | Fixed €34.20 regime for individuals, subject to the average-balance exemption |
| Qualifying foreign shares, bonds or fund units | Normally 0.20%, with the relevant valuation and holding period |
| Qualifying financial products in listed privileged-tax jurisdictions | 0.40% from 2024 |
| Foreign pension arrangement or insurance policy | Establish the product's legal classification and applicable exclusions before calculating tax |
| Crypto-assets | Separate crypto-asset value-tax rules, not ordinary IVAFE on a brokerage portfolio |
A broker's cash balance and its securities portfolio should not automatically be treated as a single bank account. Obtain a breakdown of the products and the exact legal entity holding them. An intermediary's brand or Italian-language interface does not establish its tax residence.
Foreign Bank Accounts: The €34.20 Fixed Tax
For an individual's qualifying foreign current accounts and savings books, €34.20 is the full-year fixed amount per account, adjusted for ownership share and holding period.
The tax is not due where the relevant annual average balance does not exceed €5,000. To apply this test, consider all relevant accounts and savings books at the same foreign intermediary, including the person's pro-quota interest in joint accounts. The holding period does not remove an account from this aggregation test.
Above the threshold, the tax remains fixed: it does not become 0.20% of the account balance. A wholly owned qualifying current account held all year with an average balance of €8,000 therefore has €34.20 of IVAFE under those assumptions, not €16.
Do not confuse this with the €15,000 monitoring exception, which concerns the maximum aggregate value of foreign deposits and bank accounts during the tax year. Year-end, annual average and peak values answer different questions.
Source: Agenzia delle Entrate — IVAFE rates and bank-account exemption.
The Quadro RW Disclosure Obligation
Quadro RW belongs to Redditi PF; Quadro W belongs to the 730. The Agenzia's Quadro W guidance refers to the RW instructions for the underlying information.
For foreign deposits and bank accounts, monitoring is not required where the maximum aggregate value reached during the tax period does not exceed €15,000. However, the section must still be completed where IVAFE is due. This is not a general exemption for shares, funds, property or crypto.
Closing an account during the year does not erase the period it was held. The same reporting and tax tests still have to be applied. Joint ownership, beneficial ownership and authority to move assets can also require examination; each should be documented rather than inferred.
Prepare the institution's legal identity and country, ownership share, relevant values, holding dates and foreign taxes paid. For current accounts, retain average and peak balances separately. The document checklist explains what to request from each provider.
Black-List Jurisdictions: The 0.4% Rate
From 2024, IVAFE on qualifying financial products held in jurisdictions identified by the Ministerial Decree of 4 May 1999, as amended, is 0.40%. Check the applicable Italian list for the relevant year; do not substitute the EU list or decide from a state's or region's reputation for low taxes.
This rule does not turn the fixed tax on a qualifying current account into a percentage charge. Nor does it automatically change the ordinary IVIE rate on real estate. Asset classification remains necessary.
IVIE vs. Foreign Property Tax: Can You Get a Credit
Eligible foreign patrimonial tax on the same property can reduce IVIE, subject to the applicable rules and the Italian tax limit. Obtain the foreign assessment and proof of payment: the fact that a bill relates to a property does not make every component creditable.
For qualifying EU/EEA properties, the IVIE guidance also provides limited relief for foreign income tax on the property that has not already been used as an IRPEF credit under article 165 TUIR. Do not claim the same payment twice.
IVAFE similarly permits a credit for eligible foreign patrimonial tax, capped at the Italian tax. Its official guidance identifies a treaty exception where taxation of the asset is reserved exclusively to the holder's residence country; an improperly imposed foreign tax may need to be reclaimed abroad instead.
There is no general rule allowing an excess credit to generate an unlimited Italian refund or automatically carry forward. Classification of a foreign levy, the treaty and the relevant Italian credit rules must be checked.
Three Worked Examples
These are illustrative calculations, not client cases. Each assumes the stated euro values and tax treatment have already been established, full-year ownership unless specified, and no unmentioned exemptions or credits.
Example 1: Bank-account monitoring and taxation differ
An Italian resident has one wholly owned foreign current account with a €4,000 annual average and a €20,000 peak.
The average is below €5,000, so fixed IVAFE is not due under these assumptions. The peak exceeds €15,000, so the bank-account monitoring exception does not apply. No IVAFE does not mean no reporting.
Example 2: Portfolio plus current account
A resident holds qualifying foreign fund units with a year-end value of €94,000 and a separate wholly owned foreign current account averaging €8,000, both for the whole year.
| Holding | Calculation | Illustrative tax |
|---|
| Fund units subject to ordinary IVAFE | €94,000 × 0.20% | €188.00 |
| Qualifying current account above its average-balance exemption | Full-year fixed amount | €34.20 |
| Total | €188.00 + €34.20 | €222.20 |
Income from the fund and bank is assessed separately. These calculations do not determine the treatment of a pension wrapper or a product subject to a special regime.
Example 3: Property with a qualifying foreign-tax credit
A fully owned property has a correctly established IVIE base of €200,000, is held all year and does not qualify for a main-residence exemption.
| Component | Calculation | Amount |
|---|
| Gross ordinary IVIE | €200,000 × 1.06% | €2,120 |
| Foreign patrimonial tax confirmed eligible for credit | Documented amount | €600 |
| Illustrative net IVIE | €2,120 − €600 | €1,520 |
The €600 is assumed eligible, not presumed eligible merely because it was paid abroad. If the eligible credit exceeded €2,120, it could not reduce this IVIE below zero.
Penalties for Non-Declaration
An omitted monitoring section and unpaid IVIE or IVAFE are different breaches with different sanction rules. Do not apply a percentage of unpaid tax to every failure to report an asset: monitoring penalties can instead be based on the undeclared asset amount.
Consequences depend on the violation, tax year, jurisdiction, timing and whether an assessment has begun. Voluntary correction may reduce penalties where its conditions are met. Have an adviser assess the original return and payment history before submitting a correction or attempting an offset.
International exchange of financial-account information, including CRS, is separate from the Italian cross-border invoicing obligations commonly called esterometro. They should not be confused.
Common Mistakes
- Using a bank account's closing balance for both the average-balance and peak-value tests.
- Charging €34.20 below €5,000, or replacing it with 0.20% above that threshold.
- Calling the 730's section “Quadro RW” instead of Quadro W.
- Assuming all foreign pension products, policies or trusts have the same tax treatment.
- Selecting whichever property valuation produces the lowest result.
- Claiming every foreign property charge as a credit, or assuming excess credits are unlimited.
- Confusing an asset's value tax with the separate tax on its income.
- Omitting closed accounts from the initial inventory before checking their actual obligations.
Frequently Asked Questions (FAQ)
Does IVIE apply to my primary residence abroad?
Not automatically. The main-residence exemption and rules for properties corresponding to categories A/1, A/8 and A/9 must be checked against the property's use and classification. A holiday property does not become a main residence simply because it is your only property abroad.
Does a foreign current account above €5,000 pay 0.20%?
No. Qualifying current accounts and savings books use the fixed €34.20 regime for individuals, adjusted for share and period. The €5,000 figure is the relevant average-balance exemption test, aggregated across relevant accounts at the same intermediary. Financial products follow separate rules.
Can an account require reporting but no IVAFE payment?
Yes. For example, a single account may average less than €5,000 but exceed the €15,000 aggregate-peak monitoring exception. The reporting test and the fixed-tax test use different measures and must both be considered.
Are Italian real estate assets subject to IVIE?
No. IVIE concerns foreign real estate. Italian property can create domestic obligations, including IMU where applicable, and separate income-tax obligations. Ownership of an Italian property does not itself make the owner Italian tax resident.
Can a foreign tax credit eliminate IVIE completely?
A confirmed eligible credit can reduce the corresponding IVIE to zero, but not below zero. Eligibility must be established from the foreign levy's nature and the applicable rules. There is no automatic entitlement to a refund or carry-forward of every excess foreign payment.
Are all US retirement accounts subject to IVAFE?
Do not assume a universal answer. The legal nature of the scheme, compulsory or voluntary character, access rights, applicable provisions and any relevant treaty treatment require review. Provide the plan documents and statements instead of relying solely on labels such as IRA or 401(k).
Where do I report foreign assets in a 730?
The relevant section is Quadro W. Quadro RW is in Redditi PF. The 730 instructions refer to the RW rules for the underlying data; eligibility to use the 730 must be checked separately.
Do foreign life insurance policies always generate IVAFE?
Their treatment depends on the contract and on any applicable Italian tax or intermediary arrangements. Obtain the policy, valuation and written confirmation of how payments and taxes are handled. The insurer's country alone is not a sufficient basis for a conclusion.
Official Sources
Get Case-Specific Advice
Before filing, reconcile your holdings, valuations, ownership shares and payments. Use the foreign-asset document checklist to assemble the evidence, or contact YourBusinessInItaly for a case-specific review. Never share online-banking credentials or wallet recovery phrases.
Giovanni Emmi|July 21, 2026
