Just when we think we’re finally getting a handle on the ins-and-outs of Italian bureaucracy, Italian bureaucracy throws us a curve ball. This year it is the in the form of two new taxes.
Well, actually one re-instated tax and one new tax.
The reinstated tax used to be call l’ICI, and it was a modest tax on one’s real estate holdings in Italy. Several years ago then Prime Minister Silvio Berlusconi abolished the tax in an effort to appease voters and gain re-election, in which endeavor he succeeded. If you have been following events in Italy, you know she is in deep financial crisis, and that the new Prime Minister, Mario Monti, is a technocrat. ” Technically (no pun intended), a technocratic government is one in which the ministers are not career politicians; in fact, in some cases they may not even be members of political parties at all. They are instead supposed to be “experts” in the fields of their respective ministries.” (For a more in-depth explanation of a technocracy, read this article by Joshua A. Tucker, writing for ‘Aljazeera,’ from which the preceding quote is taken.) Monti has been given the unenviable task of ‘fixing’ the Italian economy, and one of his steps has been to reinstate the ICI, now known as the IMU (Imposta Municipale Unificata). It is pronounced exactly as below.
Figuring out what one owes for the IMU is not terribly difficult, fortunately. There is a handy-dandy website (Google IMU *your town’s name* to find it) that will tell you just what you owe, and will even print out the F24 form to use when paying it. The first payment is due June 18. The second payment is due in September if you are paying in three installments, or in December if you are paying in two. The tricky part is that part of the tax goes to the federal government and part goes to municipalities. Rates for the later have not yet been set, and probably won’t be until August; so while you can figure out what you owe and need to pay for June, the second and third installments are still a bit of a mystery. The tax is only slightly higher than the old ICI for first homes. It is a good bit higher for second homes.
Speedy and I have no problem with this tax being stout-hearted believers in paying for civic services, even curtailed as they have become through the austerity measures. We DO have a big problem with the second tax.
The IVIE (Imposta sul valore degli immobili situati all’estero) is a tax on any real property owned in another country. Designed to catch out the big fish who hide large assets overseas, this tax is sadly also netting all us little minnows. It is not a particularly small tax either, as it is equal to 0.76% of the value of your property. The tricky part here (aside from actually paying the damn thing) is knowing what the correct value of the overseas property is. Fortunately in the U.S. we all have assessed values placed on our homes for tax purposes, so I suppose we could use them. And one does get a limited amount of credit for real estate taxes paid to the locality of the property in question.
There is yet another tax which is sort of bundled in with the dreaded IVIE (dubbed ‘Poison IVIE’ by The Informer website which, by the way, I highly recommend to anyone living in Italy). Strictly speaking it is not IVIE, but it feels like it – it is a tax on the value of any money, funds, pensions and so forth that you might have in another country. For 2011 and 2012 it’s 0.10% of the value of said investments; in 2013 that goes up to 0.15%. Probably by then no one will have any money left anyway, so never mind.
We understand the reasoning behind these IVIE taxes but they seem hideously unfair to an expatriate. They are, once again, meant to catch big fish: the wealthy who have secreted their resources in foreign countries or off-shore safe havens, something rich Italians are famous for doing. The penalties for not reporting/paying are extortionate – 10%-50% the value of the unreported assets. Many of us “victims” of this tax wish the government huge success so as to alleviate the burden on us in the future.
It is ‘Poison IVIE’ indeed to those of us who are just trying to enjoy a quiet expatriate life. At some point Italy will ask just one thing too much of us; our backs will break. We understand that we all have to do our bit to save the country, but taxing assets in our home country just isn’t right. And don’t get any ideas, U.S.A. – don’t think you can start taxing our property here in Italy!