Post on 30-May-2018
8/14/2019 Italy Off Plan Property Investment and Opportunities
1/16
Italy
Economic world player
Worlds th most visited country
House price growth: 7.2% Knight Frank
Excellent mortgage availability
Year-round rental returns
Overview
8/14/2019 Italy Off Plan Property Investment and Opportunities
2/16 COuntry Overview < italy
S
8/14/2019 Italy Off Plan Property Investment and Opportunities
3/16COuntry Overview < italy
italy at a glanCe Area: 301,318 km
Climate: Summer: Hot in across the country (24C).
Winter: Colder in the north,
milder in the south.
ime Zone: GM+1
Population: 58,884,000
Language: Italian
Capital City: Rome
Political System: Republic
President: Giorgio Napolitano
Prime Minister: Romano Prodi
Currency: Euro
Joined EU: 1957 (ounder member)
Dialling code: 00 39
F R A N C E
S L O V E N I A
BOSNIA-
HERZEGOVINA
C R O A T I A
I T A L Y
SAN MARINO
MONACO
Stra it ofBon i facioGolfo
di Gaeta
Golfodi Gaeta
Golfo de Sagone
Golfodi Cagliari
Golfodi Orosei
Golfodi Genova
T Y R R H E N I A N
S E A
L I G U R I A N
S EA
Golfodi Gela
Golfodi Catania
Golfo
di Taranto
Golfo
di Squil lace
Golfodi Manfredonia
SI
CI
LI
AN
C
HA
NN
EL
L E L
I O N I A N
S E A
A
D
R
IA
T
IC
S
E
A
Golfodi Venezia
C t e
dA zu
r
Golfo
diNa
poli
Golfo
dellA
sinar
a
Wh I?
rom
Cso
Ps
S Bo
Foc
nps
S
vc
Pm
Pscc
Cor s i C a
s a r d i n i a
s i C i l y
t
M
8/14/2019 Italy Off Plan Property Investment and Opportunities
4/16 COuntry Overview < italy
Wh I?
eighth largeSt eCOnOMy in the wOrld
Italy is the eighth largest economy in the world1. Asa ounder member
o the EU, the G8 and NAO, it is a key world player economically
and politically. Romano Prodi was elected Prime Minister in 2006,
and although the government coalition has governed at times without
a clear majority, the day-to-day running o the government and
economy has not been aected.
FOreign inveStMent haS dOuBled
According to OECD, total inward oreign direct investment has
more than doubled or Italy in 2006, with $41.2 billion compared
with $19.9 billion in 2005 and $16.8 billion in 20042. Italy receives
signifcant oreign investment rom major multinationals. For
example, it is the third largest supplier o products or IKEA, which
has recently announced a 1.5billion investment in Italy alone3. Such
levels in investment have a positive eect on the economy, encouraging
growth and economic success.
FiFth MOSt viSited COuntry in the wOrld
With over 40 UNESCO World Heritage sites, Italy is the fth most
popular countryto visit in the world4. In 2004, 36.5 million people
visited Italy. It attracts a variety o tourists rom city culture seekers
to those who just want to relax by the countryside and sea, and is a
perect holiday or second-home location. Te variety o tourism puts
an upward pressure on demand or property, and increases yields.
StrOng SuStainaBle grOwthRecent years have seen strong growth in the Italian property market,
with a countrywide average, house prices have risen by 7.2% in 2006,
according to the Knight Franks Global Property Index5. Some
less developed areas have the potential or signicant growth above
this level.
exCellent MOrtgage availaBility
A oreign investor can easily buy property in Italy. Te country has
a mature, highly developed mortgage market and loans are easily
available rom both Italian and British banks. Low interest rates, with
up to 80% LV on mortgages with long leases, term lengths are or
25 years6 mean you can comortably nance your investment. Te
typical rate is 5.5%7.
1. wo Bk p://ssocs.obk.o/dataStatiStiCS/rsocs/gdP_PPP.p. .s.com/s_.jsp?id_newS=7&=1>mp=s_co.jsp. .s.com/s_.jsp?id_newS=8&=1>mp=s_co.jsp. unwtO wo tosm Bom, vo , no. , J 006 .oosm.o/soom/m.m5. .kk.com/rscrpodPs/10876.p6. .cocoss.co.k7. ib
S. Ps Cc, rom
t Coossm, rom
8/14/2019 Italy Off Plan Property Investment and Opportunities
5/16COuntry Overview < italy 5
year rOund rental returnS
Te availability o cheap air travel and a avourable climate (summer
average 24C) makes Italy a popular year-round destination or visitors.
Tis means there is a steady demand or accommodation. Investors
can make good, solid returns rom holiday makers throughout the
year. Pick a property near to an attraction, such as a historic city,
UNESCO heritage site, or beautiul coastal or country view, and youll
nd demand or this area is high. Tis will have a signicant eect on
rental yield.
very eaSy tO get tO and arOund
Italy is in the heart o Europe and is served by 13 international
airports across the country rom Milan in the north to Palermo in the
south. Several low cost carriers including Ryanair, Easyjet, bmibaby,
Tomsony, Alitalia and British Airways operate through these
airports which mean that all regions o the country are well served.
Internal transport networks are very well developed through road, rail
and air. Tis encourages a strong tourism market, rom short breaks
to two-week holidays.
realiStiC SeCOnd hOMe Or retireMent OPtiOn
With its high quality standards o living and good weather, Italy is a
popular place or retirees or those who are looking or a holiday home.
For tax purposes, i you live in Italy than 183 days a year, you are
classed a resident. Live in Italy or 5 years, and you avoid paying capital
gains tax. Tis makes Italy an excellent choice or a second home or
retirement option. Te country has a rich variety o beautiul locations
be it historic towns and cities, picturesque countryside or elegantcoastal and lake locations.
diverSe and BeautiFul COuntry
Cities rich in culture, such as ashionable Milan, renaissance Florence
and Venice, and la citta eterna, Rome, once the centre o the world,
make Italy exceptional. Te country has a variety o rural settings: rom
mountainous Alpine Lombardy to green rolling uscan hills, elegant
Lakeland settings, and the dramatic Sicilian landscapes. Italians enjoy a
rich ood culture, as well as the national obsessions o designer ashion,opera and ootball (Italians are the current world champions). Tis all
adds to make Italy a unique place to invest in.
i domo, Foc
tsc scp
8/14/2019 Italy Off Plan Property Investment and Opportunities
6/166 COuntry Overview < italy
Economic overviewItaly is the worlds eighth largest economy, generating $1,668bn
in 20058. It also has the ourth largest GDP in Europe, together
with a consumer base o 60 million 9. As a member o the Eurozone
since the beginning in 1999, it adopted the Euro at the earliest
opportunity. Being in the zone insulates the economy against
external shocks, making Italy a stable country to invest in.
Italys economy has remained strong over the last 30 years, and
its in ination is under control. In act rates o below 2% are
predicted over the next two years. Although GDP growth is alsopredicted to be low, at 1.5% in 2007, the strength and size o
the economy still makes Italy an ideal place to invest in.
Te worlds eighth largest economy.
Tere is a signifcant economic divide between the north and
the south in Italy. Major industry is centred in the north and
north-west areas, due to easy access to the rest o Europe10. Tis
is reected in the economic power o the northern regions. ake
Lombardy, or example: it is the engine o the Italian economy
8. wo Bk dopm icos dbs, 1 J 0069. .s.com/co_fs0.jsp?id_linK=171&=16&sm=mks10. p://.kp.o/k/ecoom_o_11. iStat sscs p://.kp.o/k/lomb1. Fs bs o gdP p cp fs o ro Focs sco o is i. .s. com/co_oc0.jsp?id_linK=&=&oocs1. i: Cmp, ap, Bsc, Cb, Sc, S p://c.op./o_poc/objc1/os_.m
and as one o the three richest regions in Europe in terms o
GDP, it has a per capita GDP o $49,216, making it higher
than Saudi Arabia or Switzerland11. Te northern economies are
also supported by a strong tourism industry with regions such
as Lombardy, Piedmont, Te Veneto and uscany attracting
signicant tourist numbers. Such strong tourist demand leads to
potential or high rental income.
In comparison, the urther south you go, the lower the GDP,
with some o the southern regions like Sicily, Campania andCalabria haveing GDP per capita below 16,00012. While these
areas have not ared so well economically in the past, investment
incentives rom regional, national and European government
are encouraging business. Te southern regions o Italy are
assigned or EU Objective 1 status13, which means they receive
signicant investment to improve the economic inrastructure,
making them ripe or economic redevelopment.With increased
government and oreign investment, demand or property is
growing and capital growth rates likely to grow over the next
two years. With property prices also being cheaper in the South,there is plenty o room to accommodate this growth too.
S Pz
nps
8/14/2019 Italy Off Plan Property Investment and Opportunities
7/16COuntry Overview < italy 7
OECD reports that oreign direct investmenthas more than doubled or
Italy in 2006.
A good indicator or a countys economy is oreign investment.
otal inward oreign direct investment has more than doubled
or Italy in 2006, according to OECD, with $41.2 billion
compared with $19.9 billion in 200514. Italy receives signicant
oreign investment rom major multinationals. For example,
it is the third largest supplier o products or IKEA, which has
recently announced a 1.5billion investment in Italy alone15.
Such levels in investment have a positive eect on the economy,
encouraging growth and economic success, increasing wages, and
the opportunities or workers to buy and rent property.
Os bk o.
1. .s.com/s_.jsp?id_newS=7&=1>mp=s_co.jsp15. .s.com/s_.jsp?id_newS=8&=1>mp=s_co.jsp16. unwtO wo tosm Bom, vo , no. , J 006 .oosm.o/soom/m.m17. .s.com/co_scopofs01.jsp?id_linK=50&=1818. .s.com/s_.jsp?id_newS=87>mp=pss_o.jsp&om=sc
ourism is an excellent industry to increase demand and growth
rates in property. In Italys case it has become one o the driving
orces o the economy. It is the fth most popular country
destination in the world, and the third in Europe, with around
36.5 million visitors16 a year. It accounts or 70bn o income
into the economy and is the source o 400,000 jobs 17. In 2005,
Italy invested 2.7bn in tourism18 with signicant investments in
the top historic cities o Rome, Venice and Florence, as well as the
southern regions o Sicily, Calabria and Puglia. Tis will have positive
eects or the local and regional economies and growth rates.
Te wide range o tourist products, supported by strong
investment, reects the high year-round demand or holiday
accommodation and growing rental rates.
Te fth most popular tourism countrydestination in the world.
is os bk o.
8/14/2019 Italy Off Plan Property Investment and Opportunities
8/168 COuntry Overview < italy
Poiic overviewItaly has been a parliamentary democratic republic since 1946,
when it abolished the monarchy in avour o the current system. It
has a bicameral (two house) parliament consisting o the Chamber
o Deputies (630 members) and a Senate (315 members)19.
It is an enthusiastic supporter o the European Union (EU). As
a ounder member, Italy hosted the rst declaration o European
integration, the reaty o Rome, which has celebrated its 50 th
anniversary this year. It was one o the rst to sign up or the
Euro, and has been a strong supporters o the new European
constitution20, even encouraging that it should be ratied by
200921.
Political ties with the key European Union countries are strong
with Prime Minister Romano Prodi joining with Germanys
Angela Merkel in a call to re-strengthening the power o
the Union22. As a ounder member o NAO and G8, it is a
signifcant player on the world political stage. Italys role in
world brings long-term political and economic stability, which
makes it an excellent place to invest.
Italy is led by the President o the Republic, who as the as the
head o state represents the unity o the nation. Due to this, the
President tends to stay out o political debate and is considered
the guardian o the constitution23. Giorgio Napolitano is the
current President (elected in May 2006). Te ofce o President
o the Council o Ministers is also known as the Prime Minister,
and is usually the leader o the largest party coalition. Romano
Prodi, leader o the centre-let LUnione group is the current
Prime Minister, who was brought into ofce in May 2006. He
was previously Prime Minister between 1996 and 1998, and was
President o the European Commission, the executive body o
the European Union (EU).
Ps So goo npoo, c M 006.
Pm Ms romo Po, c 006.
8/14/2019 Italy Off Plan Property Investment and Opportunities
9/16COuntry Overview < italy 9
Te state is made up o twenty regions, which is governed by
elected council and directly elected president. Te strong regional
power in Italy is supported by the constitution, to ensure that
services at the state level are as decentralized as possible. It is worthconsidering the signicant dierences between these regions,
politically and economically. Tis has been reected in their
relationship with central government, with wealthier northern
regions more concerned in keeping Rome out o their aairs,
while poorer southern regions rely more heavily on Rome or
nancial support and investment. Indeed, the south has been the
ocus o successive governments or economic redevelopment.
Italy has dramatically renewed its political landscape between
1992 and 1997 when scandal investigations touched thousands
o politicians, as well as administrators and businessmen24. Since
then, there has been a trend toward two large coalitions o manyparties (one on the center-let and the other on the center-right),
which has run or elections rom 1996 to 200625. Tis trend has
brought stronger more stable government, in comparison to
previous eras. Te previous Berlusconi administration lasted its
ve year term, the longest in the republics history.
According the Economist26, Mr Prodi has been challenged by
divisions on oreign policy with his coalition, and has had to rely
on opposition votes to get approval on key oreign policy issues.
However, the approval o the 2007 budget, and increased revenuegrowth has improved Mr Prodis chances o staying in ofce until
the end o 2008 and possibly the end o his term in 2011.
19. p://.kp.o/k/Pocs_o_i0. p://s.bbc.co.k/1//o/op/957.sm1. .bsss.com/isos/coso.9/. .bsss.com/isos/pomk50.78/. p://.kp.o/k/Pocs_o_i. p://.kp.o/k/Pocs_o_i5. p://.bsss.com/i/copof6. .cooms.com/cos/i/pof.cm?o=PofFocs
Cmb o dps.
i voo
8/14/2019 Italy Off Plan Property Investment and Opportunities
10/1610 COuntry Overview < italy
10 resons o bu in tuscn
a tOuriSM hOtSPOtuscany is one o Italys most popular tourist destinations, with an
industry that is booming, seeing an increase by 6.8% in 200527.
Its popularity is reected by around 10 million tourist visits. Te
historical centres o the cities o Siena and San Gimignano are two
o the six UNESCO World Heritage sites that also include Florence
and Pisa. Tis growing tourism market means demand will always be
high or accommodation in well-located areas. Tis makes uscany
an ideal place or strong rental yields.
high rental returnSWith uscany being such tourism centre, demand is so high or
accommodation in the summer season that Lonely Planet 28states that
in high summer, San Gimignano in uscany can be as unpromising
or accommodation as that Christmas Eve in Bethlehem. Indeed
between 2000 and 2005, demand or tourism rental o private
houses has risen by 58%29. High demand combined with limited
supply o property means there is the potential or high yields.
1.
2.
3. rare OPPOrtunityo preserve the natural beauty o the historic uscan landscape
around San Gimignano, planning laws are very strict to prevent
overdevelopment. Converting agricultural land into another use
and then building on it incurs 40% tax, which strongly reduces
the incentive or developers to propose schemes. Tis makes high
quality property hard to fnd.
StrOng regiOnal eCOnOMyuscany has a strong economy, not just centred on tourism, butalso has a wide industrial base covering manuacturing, science and
technology. Home to a 1.5 million workorce, it has welcomed
over 350 multinational companies to invest in the region a 26%
increase between 2000 and 2005. Tree universities add to the well-
educated workorce, reected with an above average GDP per capita
o 25,00030. Te success o the economy means that there will
always be a demand or property, which helps orce prices up.
4.
7. p://.osc./s/mc.m8. lo P, i, 006 p.5.9. tosc & tsmo l co 005. Fom Osso |ro tsmo tosc;
..osc./s/smo/coz_006/co005.p/ ( i).0. p://.ssc.com/19coom.m1. .cocoss.co.k
8/14/2019 Italy Off Plan Property Investment and Opportunities
11/16COuntry Overview < italy 11
10.
9.
8.
7.
6.
eaSy FinanCing With a mature mortgage market, nancing is easy to come by.
Mortgages are available rom the oldest bank in the world, the Monte
dei Paschi di Siena, who are based locally in Siena, as well as British-
based banks. Low interest rates, with 80% LV on mortgages with
long leases, term lengths are or 25 years31 mean you can comortably
nance your investment.
BeautiFul regiOnuscany is renowned as one o Italys most beautiul regions. Famous
or its magnicent scenery combined with historic towns and cities,
it is a place that has inspired writers and artists or centuries. Walking
though the relatively untouched centres o San Gimignano is to
almost step back into another world and yet it is 5 minutes drive
away rom La Fontanelle, with equally historic Siena less than hal
an hour away. Its one o the most desired regions, not just in Italy,
but in Europe.
Cultural Centreuscany has a rich culture to match its beauty. Tis is the home
o Renaissance art, with palaces, churches, museums and galleriesull o priceless artworks. It is home to some o Italys icons rom
the Leaning ower o Pisa to Michelangelos David. Add to this the
amous uscan ood and wine culture, with the Chianti wine region,
and you realise why uscany is popular throughout the year.
5.
eaSy aCCeSSWith two major international airports in Florence and Pisa, uscany
is well connected with Europe. You can y to Pisa Airport (under
2 hours drive rom San Gimignano) rom London, Liverpool, East
Midlands, Prestwick and Dublin. Airlines ying into Pisa Airport
include Easyjet, British Airways, Ryanair, Alitalia y with some
ights starting as low as 1p. Airlines also y into Florence, (about
1 hours drive rom San Gimignano). All the major car hire rms
operate rom these airports.
Mild CliMateSet in the middle o Italy, uscany is blessed with a mild climate.
It has warm summers by British standards o 29-32C ,with 80 to
90% sunny days. Winters are mild (8-15 C), with sunny days never
dropping below the 50% mark. Tis only adds to the popularity o
the area, reected by the high demand or property and signicant
tourism market.
BritiSh exPat COMMunity
Tere is such a signicant expatriate community in uscany, thatsome have described it as Chiantishire. Te combination o easy
access and warm climate make it an ideal location i you are looking
or a second home, or place to retire. Te large community makes an
excellent alternative opportunity or onward sales.
8/14/2019 Italy Off Plan Property Investment and Opportunities
12/161 COuntry Overview < italy
tx in IAs with all tax systems, the rules in Italy are complex and you arestrongly advised to seek proessional advice rom a tax specialist.
However, here is a guide as to what you can expect as a UK
investor purchasing a property or investment purposes.
PrOPerty-related taxatiOn
Land registry taxes
Known as Imposta di Registro, Imposta Ipotecaria and Imposta
Catastale, these charge 7% o the value o the property1.
VATValue-added tax known as Imposta sul Valora Aggiunto (IVA)2.
Te ordinary VA rate is set at 20%3.
Property Transfer Tax
ranser tax, cadastral and mortgage taxes are imposed as a lump sum
o 129.11 on transers o properties subject to VA. Alternatively,
transer tax rates may vary rom 3% up to 15% depending on the
type o property4.
Municipal Tax on Immovable Property
Any owner, resident or non-resident, o property located within
Italy must pay the municipal tax annually on property, Impostacomunale sugli Immobili (ICI). Te taxable base equals the sum o
the estimated value or the type and class o property, as determined
by the Cadastral Ofce, i.e. the cadastral income, and a given
multiplier. Te municipality where the property is located sets the
tax rate at no less than 0.04%, and no more than 0.07%5.
PerSOnal taxatiOn
Personal Income Tax (IRE)
Italian resident individuals are subject to IRE on their worldwide
income. Non-Italian resident individuals are subject to IRE only on
certain items o income considered o Italian source. For individual
taxpayers, the taxable period coincides with the calendar year6.
Progressive tax rates apply, with a maximum rate o 39% and
minimum tax rate o 23%. In addition a 4% solidarity surcharge tax
is due or the portion o income exceeding 100,0007.
Tax residence
Individuals are considered Italian residents i, or the greater part o
the calendar year:
a) Tey are registered in the Italian civil registry; orb) Tey have their residence or domicile in Italy, as dened by the
civil law.
According to the Civil Code, residence is the place o habitualabode; domicile is the place where an individual has their main
centre o interests8.
Inheritance and Gift Tax
Inheritance and git tax were abolished in 2001. Subsequently, only
gits made to persons not having a certain degree o relationship
with the donor are subject to other indirect taxes such as transer tax,
cadastral, and mortgage taxes9.
BuSineSS taxatiOn
Corporate Income Tax (IRES)
Corporate income tax (IRES) is regulated by the Consolidated
ax Code (CC). Italian resident corporations are subject to IRES
on their worldwide income. Non-Italian resident corporations are
subject to IRES only on Italian source income. Te at tax rate on
taxable income is 33%10.
Regional Tax on Business Activities (IRAP)
Regional tax on business activities, Imposta regionale sulle attivit
produttive (IRAP), is a local tax applied on the value o the
production generated in each taxable period by persons carrying
out business activities in a given Italian region. Non-Italian resident
corporations are subject to IRAP only on the production generated
through Italian permanent establishments11.
uK tax SPeCialiStI you would like to speak with a UK accountant in regard
o your tax position, we use Drew Hazell at ayler Bradshaw
and nd him highly knowledgeable. His number is
01799 525 407.
1. .bcs.co.k/bbo//b/coss.m. ib. .s.com/co_sm01.jsp?id_linK=00&=17. ib5. ib6. .s.com/co_sm01.jsp?id_linK=90&=177. .s.com/co_sm01.jsp?id_linK=9&=17.8. .s.com/co_sm01.jsp?id_linK=90&=179. .s.com/co_sm01.jsp?id_linK=00&=1710. .s.com/co_sm01.jsp?id_linK=91&11. ib
8/14/2019 Italy Off Plan Property Investment and Opportunities
13/16COuntry Overview < italy 1
tsc v os Pobos
8/14/2019 Italy Off Plan Property Investment and Opportunities
14/161 COuntry Overview < italy
Did ou know?Siena is home to the worlds oldest
bank, Monte dei Paschi di Siena
Te Musei Capitolini in Rome is one
o the oldest museums in the world.
Te average Italian consumes 26
gallons o wine a year and eats
25 kilograms o pasta .
Famous Italian explorers include
Christopher Columbus, Marco Polo,
John Cabot, and Amerigo Vespucci.
Te Italian ootball team have been
world champions our times, only
Brazil have won it more.
In the town o Ivrea, Piedmont, there
is a traditional carnival every Februaryin which locals throw oranges at each
other (unsurprisingly known as the
Battle o the Oranges).
Florence was the rst city to mint its
own gold coins in 1252.
Te city o Naples is home to the
pizza.
Te Italians invented the viol, violin,
cello and piano
Te colors o the Italian ag represent
three virtues: hope (green), aith
(white), and charity (red).
4
4
4
4
4
4
4
4
4
4
t B o Os, i, Pmo
8/14/2019 Italy Off Plan Property Investment and Opportunities
15/16COuntry Overview < italy 15
Noes
8/14/2019 Italy Off Plan Property Investment and Opportunities
16/16