The Suprema Corte di Cassazione ("Italian Supreme Court") in Rome
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"BILANCIO 2017": THE NEW RULES ON ITALIAN NON-DOMS,
SPECIAL VISA AND THE (ALMOST) SELF-FINANCING PROPERTY IMPROVEMENTS
Shortly before Christmas 2016 and notwithstanding the political crisis,
the new Italian budget (“Bilancio 2017 ”)
was passed by the Italian Parliament in record
time. It introduces a few opportunities for non-residents. (Read
BASEMENT EXCAVATIONS AND THE LOSS OF ENTITLEMENT TO
PARKING SPACES, THE NEW FRONTIERS IN ITALIAN CONDOMINIUM LITIGATION.
are a copious source of litigation in Italy. Several people / families
living close together in blocks of flats are a continuous source of
stress and disputes. Even the 2012 reform of Italian condominium
legislation and the 2013 special mediation procedure introduced as a
compulsory preliminary to any condominium litigation, cannot stem the
flow of court proceedings.
Judgements of the Italian Supreme Court (Cassazione)
provide guidance, in some new and unusually grey areas.
THE NEXT ITALIAN COUNCIL TAX (IMU) DEALINE: 16th DECEMBER 2016
Italian Council Tax
(Imposta Unica Comunale – IUC)
in its three components,
IMU (Imposta Municipale Propria),
TASI (Tributo per i servizi indivisibili )
and TARI (Tassa
rifiuti), is now approaching its second annual deadline, and
will be due and payable by the 16th December 2016.
NEW OPPORTUNITIES: INNOVATIVE WAYS OF
DEALING WITH ITALIAN PROPERTY
Traditionally, there are only set, limited ways of dealing with
property, under Italian law. Property rights and contracts are
restricted by law to what is expressly regulated by and available under
current legislation. Until recently, an Italian property could only
basically be sold, let or inherited.
New forms of property contracts were introduced last
year with the “Rent to buy” legislation (please refer to my article on
this website). Recently, the Italian Parliament introduced further
legislation providing for some more innovative ways of dealing with
property, under Italian law. These are new opportunities for property
owners or for prospective property buyers.
NEW LEGISLATION FOR SERIOUSLY
DISABLED CHILDREN AND THEIR REAL ESTATE ENDOWMENT.
The Italian Parliament recently
passed new legislation for the protection of disabled children.
With the newly introduced, formal
contract of “Affidamento fiduciario
parents are in a position to set up a trust, fully effective and
enforceable under Italian law, to make provisions for the protection,
care and assistance of their disabled children, during the parents`
lifetime and after their death.
stabilita`2016 ” and the Italian property owner.
di stabilita` 2016 ” is the new Italian budget. It came into
force on the 1st January 2016 after protracted political
negotiations. As for similar earlier legislation, it is made up of just
one very long Section (Articolo 1 ), which in its turn is
divided into 999 numbered paragraphs without headings to assist in the
navigation of this complex, extremely detailed and often confusing raft
of new legislation.
Trying to make
sense of this legislation and how it interacts with the existing Italian
legal and fiscal system is the arduous task facing Italian lawyers and
anyone else wishing to keep up that to date with Italian legislation.
Several provisions relate to property matters, this legislation will
affect a wide audience in Italy.
TRUSTS IN ITALY
Trusts were unknown in Italy, until a few years
ago. Italy being a Civil Law country, totally ignored Trusts as
developed in Common Law jurisdictions. Following the introduction of
The Hague “Convention on the
law applicable to trusts and on their recognition” with a
law in 1989, the use of Trusts has slowly spread in Italy.
Like any imported species, Trusts arouse great
interest but are also causing problems in the general Italian legal
A raft of recent legislation has introduced several
changes to the established rules on Italian succession. Completely new
rules apply to successions with an international element,
following the coming into force of an EU Regulation on the 17th August
This new legislation is intended to be a “simplification” or an
improvement of the current rules, however, the devil is in the detail of
its implementation. It is clear, however, that all existing Italian
wills should be revised in the light of these changes. (Read
A NEW WAY TO BUY ITALIAN
PROPERTIES: “RENT TO BUY”
Legislation issued in September 2014, and yet to be confirmed by the
Italian Parliament has introduced a new way of buying a property in Italy.
“Rent to Buy” agreements or more specifically “Contratti
di godimento in funzione della successiva alienazione di immobili
enable potential buyers to immediately access Italian properties they
wishe to acquire, without payment of the full sale price and without need
of a mortgage. The vendor provides financial assistance, by agreeing to
receive periodical payments / rent for a number of years, rather than the
outright sale price. At the end of the agreed “rental” period the tenant /
buyer will either have an option to buy the property, or will have to
complete the acquisition, at a reduced / discounted purchase price. (Read
A FOREIGN JURISDICTION
CLAUSE WILL NOT DEFEAT THE ITALIAN “FORCED HEIRSHIP RULES”.
A specially constituted Italian
Supreme Court (Corte Suprema di Cassazione)
rejected on 20.06.2014 the proposed application of a foreign
jurisdiction clause in a foreign trust deed, where such trust conflicted
with the Italian “forced heirship rules” (Successione
necessaria) - this is Italian legislation which grants to the
members of the Deceased`s family a minimum, statutory share of his
CONSTITUTIONAL COURT STRIKES OUT LANDLORDS` ANTI-AVOIDANCE LEGISLATION.
A recent ruling of the Italian Constitutional Court has
repealed with immediate effect anti avoidance regulations aimed at tax
evading Italian landlords, dating back to 2011. Because of the immediate
effects of this ruling and the operation of the abrogated legislation over
the past three years, complex issues are now left open for interpretation.
2014 - NEW YEAR, NEW SELLING PROCEDURES AND NEW
TAXES TO IMPROVE THE ITALIAN PROPERTY MARKET
New legislation, coming
into force on the 1st January 2014 will make substantial
changes, actual improvements to the way the Italian property market
works. New, improved selling / buying procedures are introduced. At the
same time, the taxation of Italian properties will also change. Reduced
rates of tax will become applicable to property transfers, new taxes
replace part of the current council tax.
Some of these changes
are a definite improvement others will have to be judged in light of
their actual implementation and performance. The devil, as always, is
in the detail.
THE SECOND INSTALMENT OF
IMU TAX ON ITALIAN PROPERTIES IS DUE BY 16th DECEMBER 2013
The second instalment of IMU Tax (Imposta
Municipale Propria - Italian Council Tax) will shortly be
due. This tax introduced only last year, has already undergone an
extraordinary range and extent of changes, and may change again, before
it is due. Under recent legislation Town Councils (Comuni)
have been allowed to change their IMU Tax regulations (setting out the
rate of tax and exemptions) up to the 9th December 2013. So
within five working days, Italian and foreign taxpayers
will have to study these new regulations, calculate and pay the IMU tax
due on their Italian properties. Of course any late payment is
sanctioned by fines.(Read
THE NEW 22% RATE OF ITALIAN VAT
From the 1st October 2013 the standard
rate of Italian VAT (Imposta sul Valore Aggiunto - IVA) has been
increased to 22%. This 1% increase was partly unexpected, although it
had been announced months ago, because there had been rumours that this
increase would not be implemented. At the last moment, almost by
default, the 1% increase of Italian VAT has come into force on the
midnight of 30.09.2013.
COMPULSORY MEDIATION IS REINTRODUCED IN ITALY.
September 2013 mediation has been formally
re-introduced in Italy as a compulsory step, for some disputes, before
the parties may apply to the courts.
Mediation has had a chequered life in Italy.
Introduced in 2010 as an attempt to deflate the spiralling burden of
litigation and of arrears pending in the Italian courts, it was struck
off in 2012 by the Italian Constitutional Court on a (rather
fundamental) technicality, that has nothing to do with the mediation
process as such. The Legislative Decree originally issued by the
Government and introducing mediation in Italy had exceeded the limits of
the authority granted by Parliament and so to an extent was ultra
vires and unconstitutional.
THE NEW ENERGY PERFORMANCE
CERTIFICATE: HOW AN ACE TURNED INTO AN APE
On the 6th June 2013 new legislation was
brought into force in Italy to implement, once again, what is currently
Directive 2010/31/EU on the energy performance of buildings.
new legislation, the name of Italian energy performance certificates
(previously called “Attestato di Certificazione
Energetica ” or
ACE for short) was changed to "Attestato
di Prestazione Energetica (APE)". However this was not just a
change of name. The rules as to when this certificate is required have
been changed and sanctions for breach of these technical rules have been
THE FLUCTUATING LIABILITY OF A FLAT
OWNER FOR HIS CONDOMINIO`S DEBTS AND OBLIGATIONS
If you own a flat in Italy
as part of a block of flats, what is the extent of your liability
for the debts and obligations arising from the common parts of the
building, or, in Italian legal terms, of your “Condominio
Is there a risk that you may be required to pay more than
your annual service charges (Oneri
Condominiali ) ?
In Italy the answer to this question has changed over recent years
due to an evolution of the caselaw of the Italian Supreme Court
(Corte di Cassazione).
It will change again on 18th June 2013 when new legislation
on the management of block of flats
will came into force. (Read
CHANGES TO THE MANAGEMENT OF
BLOCKS OF FLATS: THE NEW "CONDOMINIO" RULES
The Italian Parliament has updated legislation
relating to use and maintenance of common parts in buildings / block of
which, until recently, dated back to 1942, the origins of the current
Italian civil code. This new legislation is nothing short of revolutionary. Hopefully it
will mark a positive change in the life of anyone owning a flat in
NEW RULES ON
ITALIAN FOODSTUFF CONTACTS OR ITALIAN FOOD MADE HOTTER.
On 24th October 2012 new provisions
regulating wholesale food and produce contracts (“Contratti
lost in a wide ranging raft of new Italian legislation (issued earlier
in January and aiming to revive the economy), have come into force in
effects for anyone buying wholesale food from Italian suppliers are extensive and
unless great care is taken, potentially devastating.
"IVIE OR THE THE
ITALIAN TAX ON FOREIGN PROPERTIES IS NOW DUE !
At the end of last year the Italian Parliament passed
legislation introducing an Italian tax on foreign properties (“IVIE”
or “Imposta sul Valore Immobili Esteri“) and on foreign financial
assets (“IVAFE” or “Imposta sul valore delle
Attivita` Finanziarie detenute all` Estero“)
held by taxpayers (whatever their nationality) resident in Italy. So for
instance, British nationals who elected to be resident in Italy, will be
affected. These taxes are now due and payable by the 9th
July 2012, and because of their novelty and extra-territorial impact,
are bound to cause problems.
THE NEW ITALIAN
COUNCIL TAX : "IMU"
After a long debate, the new
property tax “IMU” (Imposta Municipale Propria)
replaced “ICI” tax (Italian Council Tax) and was due in Italy by the 16th
June 2012. Just the June 2012 instalment itself, was expected to raise
almost 10 billion Euro revenue.
A SUMMARY OF "LEGGE SALVA ITALIA" OR MONTI` S YEAR END BUDGET
Just before Christmas 2011, the Italian Parliament
confirmed the corrective, emergency legislation issued earlier the same
month. This legislation aims to salvage the ailing Italian economy and was
very aptly called “Decreto Salva Italia” (the
Decree that will save Italy) by PM Mario Monti himself.
This new legislation is a raft of very different measures, with very heavy
tax / cuts to public expenditure connotation. It came under heavy criticism
in Parliament, but was eventually passed with comparatively minor
amendments, within a comparatively short time.
IN THE ITALIAN COURTS ......
- Liability of incompetent / dishonest estate agents -
In this case an Italian estate agent had eagerly
pressurized a buyer to sign a preliminary contract for the purchase of a
property, to pay the deposit and the agent`s full commission. In
bringing pressure to bear on the buyer, the agent had also repeatedly
said that, the relevant property was free from charges / mortgages, so
there were no reasons to delay exchange of contracts and, of course,
payment of the agent`s commission. The unfortunate buyer was deceived in
exchanging contracts and paying commission, before carrying out usual
searches. (Read article)
"CHECK THE VALUE OF
YOUR PROPERTY ... ON THE ITALIAN LAND REGISTRY DATA BANKS"
The Italian Land Registry (Agenzia
del Territorio) has made available to the public its data banks on
selling and letting market values of Italian properties. These data banks are
free of charge and open to anyone who may be interested.
By collecting and updating the data which must now be provided on every sale
/ letting contract, the territory of the Italian Republic has been divided
into micro district, smaller areas with very similar market values /
characteristics. In the case of buildings, for each of such smaller areas
the market and letting values are given as a maximum / minimum range in Euro
per square metre, per month in the case of letting values.
OR THE NEW, FLAT RATE TAX ON ITALIAN RENTAL INCOME.
As part of a general process of devolution (Federalismo)
of administrative and fiscal powers from central government to local
authorities / local town councils (Comuni ), a new, simplified form of
rental income taxation has recently been introduced in Italy.
SALES AND LETTINGS OF ITALIAN PROPERTIES: ENERGY PERFORMANCE CERTIFICATES AND NEW REGULATIONS.
New legislation has come into force in Italy at the end of March 2011, which applies to any sale / acquisition or even letting of properties, in compliance with a number of EU Directives. (Read article)
TOUR OPERATORS` LIABILITY FOR DISAPPOINTING "PACKAGE HOLIDAYS"
Sometimes a contract includes more that what is written on the document. Representations made at the time the holiday was booked, orally or even in the form of photos / promotional brochure illustrations may be held to be legally binding. (read article)
NEW RESTRICTIONS ON THE USE OF CASH IN ITALY.
With the December
2011 Budget (Manovra
the amount of cash (Contanti
which can be used in Italy for any
given, individual transaction has now
been reduced to Euro 1,000. Any payment
over and above this amount should now be
effected either with a cheque (Assegno)
or by bank transfers (Bonifico
ITALIAN TAX AMNESTY ON UNDECLARED FOREIGN ASSETS
The introduction of new Italian legislation increasing (sometimes
doubling) the sanctions for tax evasion related to illegal export of
funds and undeclared foreign assets, has also been the opportunity to
introduce a second tax amnesty in Italy, after the earlier, 2001
disclosure facility. This legislation applies to Italian residents under
current tax legislation, whether Italian nationals or foreign nationals,
domiciled in Italy or abroad.
ITALIAN BUDGET 2010 - IF A VILLA IS NOT ON THE MAP AT THE LAND REGISTRY, IT CAN NOT BE SOLD !
Under Italian law the taxation of buildings is inexorably connected with the Local Land Registry. Italian Income Tax (IRPEF) and local taxes like Italian Council Tax (Imposta Comunale Immobili - ICI) and refuse collection tax (TARSU) are levied on the values / data registered at the Local Land Registry (Catasto) against each property. (Read article)
NEW RULES FOR THE PROTECTION OF "MADE IN ITALY"In record short time and with the support of the whole political spectrum, new legislation was recently passed by the Italian Parliament for the protection of the "Made in Italy" appellation. (Read article)
NEW REGULATIONS EXPEDITE ITALIAN BANKING SERVICES
New regulations in force since the 1st March 2010 introduce strict statutory deadlines for Italian banking services. These are effectively a charter for Italian banks customers. (Read article)
ITALIAN ENERGY PERFORMANCE CERTIFICATES: JUST ANOTHER HURDLE OR AN OPPORTUNITY ?
Since the 1st July 2009, if you sell a house or a flat in Italy, you are required to produce an energy performance certificate ("Attestato di Certificazione Energetica" - ACE for short), this is the date when some legislation issued in 2005 eventually came into force. (Read article)
"FINANZIARIA 2008" A NEW PITFALL FOR ITALIAN PROPERTY BUYERS
"Finanziaria 2008" or the latest Italian budget is a complex, condensed and sometimes confusing raft of legislation which came into force last month. In an attempt to combat tax evasion in Italy, it has introduced a potential new trap for unwary buyers. Because of the way it operates, this new risk is difficult to ascertain and to avoid. (Read article)
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