3rd January 2006
PRESS RELEASE
ALL CHANGE ON THE ITALIAN
PROPERTY MARKET.
Dr Claudio Del Giudice
Rivington House
82 Great Eastern Street,
London EC2A 3JF
(United Kingdom)
Tel 0044 207 613 2788
Fax 0044 207 613 2799
On the 1st January 2006 a new Finance Act
(“Finanziaria 2006”) came into force in Italy. This new law brings to an
end the dilemma facing anyone acquiring an Italian property. Previously because
of complex and sometimes contradictory legislation anyone buying an Italian
property was faced with the dilemma of declaring in the Deed of Sale the
“reduced” Land Registry value (“Valore Catastale”)
of the property and thus paying a “reduced” amount of Italian Registration Tax
(“Imposta di Registro”) on such value (based on a narrow interpretation
of controversial earlier legislation), or being honest and compliant with the
general law, of declaring the full contractual / market value and end up paying
a much higher amount of the same tax for the same transaction.
The former involved substantial risks for buyers, placing them in the disastrous
situation of being unable to prove the actual price paid for their Italian
property. This also had implications in the UK as any form of Italian tax
evasion could fall under the Proceeds of Crime Act 2002.
Finanziaria 2006 changes all this, as it states in unequivocal terms that
any buyer (in a sale between individuals) is free to declare in the Sale Deed
the “reduced” Land Registry Value and is legally entitled to pay Italian taxes
on this amount only. At the same time, the buyer can formally state in the same
Deed the actual contractual price effectively paid which again, in unequivocal
terms, will not be taxed in Italy. It is the end of a malpractice which has
lasted for decades and shrouded the Italian property market in a veil of
secrecy.
Finanziaria 2006 also brings other gifts to buyers. From the 1st January
2006, capital gains realised on the sale of Italian properties within 5 years of
acquisition (there in usually no tax in Italy after this period) will be taxed
at a reduced, special rate of 12.50% only.
Finally, as an additional bonus to buyers, the fees of Italian Notaries, who
under Italian law have the legal monopoly of executing the sale / transfer of
Italian properties, are reduced by 20%. Meanwhile, the Italian property market
continues to show signs of growth, in the face of economic uncertainties”.
January 2006 Dr
Claudio Del Giudice -
Copyrights reserved
For further information please
contact: Dr Claudio Del Giudice Italian lawyer (Avvocato) and English
Solicitor, specialises in Italian property law, on 0207 - 613 2788.