Wealth Tax in Italy: IVIE, IVAFE and Foreign Asset Reporting
Italy has no tax on net worth, but residents pay IVIE and IVAFE on assets held abroad and must report them in the RW section. Rates, exemptions, thresholds and the regimes that switch it all off.
There is no wealth tax in Italy. No annual charge on your net worth, no levy on your total assets, nothing resembling the taxes that exist or have existed in Spain, France, Norway or Switzerland. If that is the question, the answer is short.
But Italy wealth tax, as English-speaking clients use the phrase, usually means something narrower and real: the annual charges an Italian resident pays on assets held outside Italy. There are three of them, and alongside them sits a reporting obligation that catches more people than the taxes themselves.
All of this attaches to tax residence and to nothing else. A non-resident owes none of it, whatever they own and wherever.
What the Italian Wealth Tax Actually Charges
The Italian wealth tax question resolves into three annual charges, each on a different class of foreign asset, each declared and paid with your income tax return.
IVIE, on Property Abroad
The rate is 1.06%, raised from 0.76% with effect from 2024. The base is the purchase cost shown in the deed, or the market value where there is no such figure, with an important exception for property in the European Union or the European Economic Area, where the value used locally for property or income tax purposes is taken instead. That exception frequently produces a materially lower base than the market price, and it is worth checking before accepting a computation built on what the property is worth today.
For Belgium, France, Ireland and Malta there is a choice between a rateable-value route and the cost shown in the deed. For the United Kingdom that route closed with Brexit: since 2021 the base is the purchase cost, or the market value where there is none, and the Council Tax banding can no longer be used. Anyone who computed IVIE on a British house from the council band before that change was computing it on a figure that no longer applies.
Below a certain point the charge simply does not arise. Where IVIE on a property works out at 200 euro or less, nothing is due: a threshold applied property by property, computed on the tax due on the whole value regardless of the share you own and the months you held it, and before any foreign tax credit is set against it. The charge itself is then prorated by share and by months of ownership, a month counting in full where possession ran for at least fifteen days.
A foreign main home is outside IVIE altogether, together with its appurtenances, as is a matrimonial home assigned to a spouse on separation or divorce. The exception is the property that would fall into the Italian cadastral categories reserved for stately, villa and castle properties, which is charged at a reduced 0.4% with a 200 euro deduction. So the ordinary case of a house kept abroad and lived in as a main home carries no Italian charge at all, a point almost universally missed by the English-language sources.
Nor is such a property taxed twice. For a foreign main home, and for unlet foreign property subject to IVIE, the ordinary Italian rule bringing foreign property income into charge is disapplied. An apartment standing empty abroad does not generate a notional Italian income on top of the wealth charge.
Property taxes paid abroad on the same property are creditable against IVIE, so the charge is often reduced rather than doubled, but the credit has to be claimed and documented.
Who pays is not always who owns. Where a property is split between a usufruct and a bare ownership, IVIE falls on the usufructuary and not on the bare owner; a finance lessee is liable from the date the lease is signed. The reporting works differently (both the usufructuary and the bare owner have to report) which is the first of several places on this page where the charge and the report part company.
IVAFE, on Financial Assets Abroad
The rate is 0.2% of the value of foreign financial products. Since 2024 there is a second rate of 0.4% for products held in jurisdictions treated as privileged for tax purposes, a distinction that almost no English-language source mentions, and that doubles the charge for portfolios held in some of the places our clients most commonly hold them.
What IVAFE does not reach is as useful to know as what it does. A holding in a foreign company that is not represented by securities (the ordinary position of a member's interest in an LLC, or of an uncertificated shareholding in a private limited company) is outside the charge. So are shareholder loans, foreign banknotes and coin, and precious metals. All of them remain reportable. The distinction is between owning a financial product and owning a stake, and it is worth drawing carefully before assuming a charge that is not there.
It cuts the other way too. Foreign shares held directly rather than through an intermediary attract IVAFE, where an equivalent Italian holding kept outside a bank or broker would pay no stamp duty at all. Holding certificates in a drawer is not a way out of the charge.
Bank accounts are treated differently from investments. A foreign current account or savings book attracts a fixed 34.20 euro a year rather than a percentage, and nothing at all where the average annual balance stays under 5,000 euro, a test run on the average shown by the statements across the year, not on the balance at 31 December. It is the same amount Italian accounts pay in stamp duty, which is the point: the charge exists to equalise, not to penalise. Deposit accounts and certificates of deposit are outside this fixed treatment and are charged proportionally like any other financial product.
Crypto-Assets
A separate 0.2% annual charge applies to crypto-assets held. It is a charge on the holding, and it is distinct from the tax on gains when you dispose of them, which works differently and is dealt with elsewhere. Holding crypto through a foreign platform can therefore attract both this charge and the reporting obligation below.
One thing the crypto charge does not attract is the privileged-jurisdiction uplift. The doubling to 0.4% is confined by its wording to financial products, and does not extend to crypto-assets, which is just as well, given how hard the question of where a crypto-asset is located would be to answer.
The Obligation That Catches More People Than the Tax
Separately from any tax, an Italian resident must report foreign investments and assets capable of producing foreign income, in a dedicated section of the annual return.
Two features of that obligation are worth stating plainly, because between them they account for most of the trouble we see.
It applies whether or not the asset produced any income. A dormant account, an empty apartment, a shareholding that pays no dividend: all reportable. People who reason that there is nothing to declare because nothing was earned are reasoning about the wrong obligation.
And it applies whether or not any of the charges above is due. But the report has thresholds of its own, and they are not the tax thresholds. A foreign current account escapes the fixed IVAFE where its average balance across the year stays under 5,000 euro; it escapes the report only where its highest balance at any moment in the year stayed under 15,000. One day above that figure pulls the whole year into scope. The two tests measure different things (an average against a peak) and an account can comfortably fail one while passing the other.
Who Counts as Holding the Asset
The obligation reaches beyond the person whose name is on the account. Anyone treated as the beneficial owner of a foreign investment reports it:
Where the company sits in a jurisdiction that does not exchange information with Italy, the analysis goes further: instead of reporting the value of the shareholding, you report the underlying foreign assets the company holds, look-through, for as long as a company in such a jurisdiction remains in the chain. Where the company sits in a cooperative jurisdiction, the shareholding itself and the percentage are what get reported, and the look-through does not apply. Two structures that look identical on an organisation chart can therefore produce very different reporting.
Trusts, Settlors and Beneficiaries
Trusts are where this gets genuinely intricate, and where the position moved recently. The starting point is that the wealth charges follow ownership: a beneficiary of an opaque foreign trust does not own the underlying property or hold the financial products, so neither IVIE nor IVAFE falls on them. A ruling issued in March 2026 extended the same reasoning to a transparent foreign trust: a resident beneficiary entitled only to the income of the trust, with no right to the capital and no power over the assets, owes no IVAFE on the trust's investments.
The reporting is a separate question with a different answer. Beneficiaries who are identified or readily identifiable, including those identified only as a class, report their claim against the trust alongside their own foreign holdings. Those who would become beneficiaries only if the present ones fell away are generally outside it. A trustee does not report the trust's assets as their own, and neither does a protector, because in each case the assets are administered for others rather than held in their own interest.
All of which reverses if the trust is treated as interposed rather than real. Then the resident beneficiary is looked through to: the trust's income becomes theirs to declare, the reporting becomes theirs to make, and IVIE and IVAFE become theirs to pay. Whether a trust holds up under that scrutiny is a question about how it was drafted and how it is actually run, and it is worth answering before the first Italian return rather than in correspondence afterwards.
Accounts You Do Not Own
A power of signature over someone else's foreign account can bring it into your report, and not for a share of it, but for the whole balance. What matters is the nature of the authority: a power that lets you withdraw is enough, a mandate that merely lets you operate on the account holder's behalf is not. Joint accounts, elderly parents' accounts, family arrangements set up for convenience: these are ordinary domestic situations that create a personal reporting obligation people are genuinely unaware of.
Foreign Pension Arrangements
Compulsory foreign pension provision is outside the reporting obligation; voluntary provision is inside it. The practical illustration is Switzerland, where the occupational second pillar is compulsory and is not reported, while the third pillar is voluntary and is. The same logic exempts foreign supplementary schemes that are compulsory under a national collective agreement, but not those taken out under an individual arrangement. For anyone arriving from Switzerland with both, the two halves of a single retirement plan are treated differently.
Crypto-Assets, Wherever They Sit
Crypto-assets are reportable regardless of how or where they are kept: on a foreign exchange, on a domestic one, on a hardware wallet, on a phone, on a laptop. The concept of a foreign location does not really apply to them and the reporting does not depend on it; the country code is not even required. A line can be opened for each wallet or account rather than for each asset, provided you keep a schedule of individual values available on request. The one exclusion is for holdings whose private keys have been lost or stolen, where a report to the police can be produced.
What Gets Valued, and How
A securities account is reported at its opening and closing values, with the days held: not line by line, and the composition does not matter. Units in unlisted private equity funds are taken at acquisition cost rather than at the net asset value the manager circulates, which frequently produces a very different figure from the one on the last investor statement. Amounts in foreign currency are converted at the published monthly average rates. And the report is not confined to money: foreign property, art and valuables, yachts and pleasure craft, trademarks and patents, antique furniture all belong in it.
The Assumption That Foreign Assets Earn Something
Foreign financial assets are presumed to have produced income at the official reference rate, which means a return has to be declared unless you show there was none. The presumption can be rebutted, but the rebuttal has to be evidenced: a statement from the foreign institution confirming that the asset produced nothing, kept with the file in case the position is examined later. Reporting an asset and declaring no income from it, without more, is an invitation to a question.
What Failure Costs
Penalties for failing to report run from 3% to 15% of the undeclared amounts, and double to between 6% and 30% where the assets are held in a jurisdiction on the privileged list.
Worse, and less well known: sums held in such a jurisdiction are presumed to have been formed with income that escaped Italian tax. That presumption converts a reporting failure into an assessment on the capital itself, with the burden of showing otherwise falling on you. A forgotten account can therefore generate a demand that bears no relation to its size.
When the Report Is Not Required
Most of this page describes the position. This part changes it, and it is where the practical planning sits.
Foreign assets placed under management or administration with an Italian intermediary fall out of the reporting obligation altogether, provided the intermediary applies the Italian withholding or substitute tax to the income and gains. The same applies to assets held under a fiduciary mandate with an Italian fiduciary company, whether or not the assets are registered in the fiduciary's name. For a client with a complicated foreign portfolio and no appetite for an annual reporting exercise, moving custody rather than moving assets is often the answer: the tax outcome is unchanged, and the compliance disappears.
Foreign property that did not change during the year is also outside the report, but the IVIE on it still has to be computed and paid, which is the trap in the exemption rather than the benefit of it.
And where you are outside the reporting but still liable for IVIE or IVAFE, the form is filed anyway, because that is where the charges are computed. There is a consolation in that: an error in a return filed on that basis attracts the penalties for the tax, not the far heavier penalties attached to the reporting failure itself.
When Wealth Tax in Italy Does Not Apply
Three situations switch the whole regime off, and two of them are elective.
If you are not an Italian tax resident, none of it applies: no charges, no reporting, whatever you own abroad. Which is another way of saying that everything on this page is downstream of the residence question.
If you have elected the substitute tax regime for new residents, or the 7% regime for foreign pensioners, you are outside both the wealth charges and the reporting obligation for the duration of the election. For someone with substantial foreign holdings this is frequently worth more than the headline saving on income: a portfolio of ten million euro carries twenty thousand a year of IVAFE alone, before anything is charged on the income it produces.
That interaction is one of the least discussed and most quantifiable arguments for the regimes, and it belongs in any comparison of what they actually save.
How the Italy Wealth Tax Charges Are Declared and Paid
All of it goes in the annual return, in the same section used for the reporting. The charges follow the income tax calendar: balance and first payment on account with the June deadline, second payment on account in November, on the same terms and with the same payment-on-account mechanics as income tax itself.
Which produces the same first-year effect described elsewhere: nothing on account in the first year, and a larger demand the following June. For a household holding significant foreign assets, that is a cash-flow event worth anticipating rather than discovering.
A closing point on the legislation itself, because clients who look it up will find two sets of references. Both charges have been carried into the new consolidated texts, IVIE and IVAFE each relocated to a new article, with effect from 2027 and without substantive change. The rules that apply today are the ones described above; the renumbering changes where they are found, not what they say.
What Usually Goes Wrong
The pattern is remarkably consistent, and it is almost never aggressive planning:
- someone becomes resident partway through a year and does not realise that residence for the greater part of that year brings the whole of their foreign position into scope;
- they report the accounts they use and forget the ones they do not: an old brokerage account, a dormant deposit, a pension pot they think of as untouchable;
- they treat the reporting as a tax return and conclude that an asset producing no income needs no entry;
- they hold assets through a structure and assume the structure reports for them.
None of these is difficult to fix in advance. All of them are expensive to fix afterwards, because the penalties attach to the amounts held rather than to the tax avoided, and because the privileged-jurisdiction presumption can turn a compliance question into a capital one.
The question is rarely what you own and usually what you are treated as holding.Avv. Marco Mesina, Founder of Move to Dolce Vita
Why Work with Us
We work out what is actually reportable and what is actually chargeable, which are two different lists, and we build them before the first Italian return rather than in response to a letter.
We look at structures as well as accounts (trusts, holding companies, fiduciary arrangements, powers over other people's accounts) because the question is rarely what you own and usually what you are treated as holding.
We deal with historic positions (accounts that were never reported, years that are still open) and with the remedies available for correcting them before the authorities act rather than after.
And we look at this alongside the regime question, because for anyone with substantial foreign holdings the wealth charges and the reporting are a large part of what a substitute regime is actually worth.
Frequently Asked Questions
Is there a wealth tax in Italy?
Not in the ordinary sense. There is no annual charge on net worth. What exists are three charges on assets held abroad by Italian residents (on real estate, on financial assets, and on crypto-assets) plus an obligation to report foreign holdings.
How much is IVIE?
1.06% of value, raised from 0.76% in 2024. For property in the EU or EEA the base is generally the value used locally for property or income tax purposes rather than the market value, and foreign property taxes on the same property are creditable.
How much is IVAFE?
0.2% of the value of foreign financial products, doubling to 0.4% where they are held in a privileged tax jurisdiction. Foreign current accounts pay a fixed 34.20 euro a year instead, and nothing where the average annual balance stays below 5,000 euro.
Is my home abroad subject to IVIE?
Generally not. A foreign property used as your main home is outside IVIE, together with its appurtenances, as is a matrimonial home assigned to a spouse on separation or divorce. The exception is the high-end category of stately and villa properties, charged at a reduced rate with a deduction. A foreign main home is also outside Italian income tax.
Do I have to report a foreign bank account under €15,000?
No, provided its balance never went above 15,000 euro at any point in the year: the test is the highest balance reached, not the average and not the year-end figure. One day above the line brings the whole year into scope. Note that this is a different threshold from the 5,000 euro average balance that governs the fixed IVAFE charge; an account can be under one and over the other.
Do I have to report an account that earned nothing?
Yes, subject to the threshold above. The reporting obligation is independent of whether the asset produced income, and independent of whether any charge is due on it. Those are three separate questions that happen to be answered on the same form.
Do I report assets held through a company or a trust?
Often, yes. A holding of more than 25% in a foreign company generally makes you the beneficial owner of what it holds, with family holdings aggregated in the test; where the company sits in a jurisdiction that does not exchange information with Italy, you look through it and report the underlying assets. Identified beneficiaries of a foreign trust report their entitlement, though they do not pay the wealth charges on assets they do not own. Trustees and protectors do not report.
Can an Italian bank or fiduciary remove the reporting obligation?
Yes, and this is the most useful lever on the page. Assets placed under management or administration with an Italian intermediary that applies the Italian withholding, or held through an Italian fiduciary mandate, fall outside the reporting obligation entirely. The tax outcome is unchanged; the annual reporting exercise disappears.
Is my Swiss pension reportable?
The second pillar is not, because it is compulsory. The third pillar is, because it is voluntary. The same distinction applies to foreign supplementary schemes generally: compulsory under a collective agreement, outside; taken out individually, inside.
What happens if I did not report?
Penalties of 3% to 15% of the undeclared amounts, doubling to 6% to 30% for privileged jurisdictions. And sums held in those jurisdictions are presumed to have been formed with untaxed income, which shifts the argument from a reporting failure to the capital itself.
Do the flat tax regimes remove the Italy wealth tax charges?
Yes. Electing the substitute regime for new residents, or the 7% pensioners regime, takes you outside both the wealth charges and the reporting obligation for the duration. For substantial foreign holdings that exemption is frequently a large part of what the regime is worth.
Do non-residents pay wealth tax in Italy?
No. All of it attaches to Italian tax residence. A non-resident owes nothing on foreign assets and reports nothing.
Avv. Marco Mesina
Founder, Move to Dolce Vita · Avvocato, Milan Bar (Ordine degli Avvocati di Milano)
Marco is an Italian tax lawyer who advises individuals and families relocating to Italy on tax regimes, residency, citizenship, real estate and succession planning. Before founding Move to Dolce Vita he worked at Watson Farley & Williams, Withers and Deloitte in Milan.
- Milan Bar
- Citywealth Top 50 Italian Advisors 2025 & 2026
- Profiled by Forbes (2024)
- English · Italian · Spanish
