_Italy: Compelling financial reasons for a legendary lifestyle
Italy provides a sublime range of property choices from contemporary apartments in design-central Milan, a country estate among Tuscany’s Montepulciano vines or a Venetian palazzo beside the Grand Canal. From medieval Lucca to Renaissance Florence, from the Ligurian coast to the beach clubs of Sardinia, each region has its own distinct character and style but all showcase Italy’s unrivalled lifestyle - that famous dolce vita. Come for the history and art, stay for the food and love of life.
There are also compelling financial reasons for a move to Italy as outlined in Knight Frank’s inaugural Italian Tax & Lifestyle Report. Alasdair Pritchard from Knight Frank’s super-prime international sales team says the current value to be found in Italian property combined with recent changes to Italy’s tax regime has led to a significant increase in the number of wealthy international buyers there.
In 2017 the Italian government announced a new €100,000 flat rate tax on global income,” explains Alasdair. “Along with price falls of around 40 per cent in the decade after the global recession this has made Italy very attractive to wealthy international investors. Whilst there are a number of other locations with attractive tax regimes around the world, few offer the accessibility, history, culture, climate and overall lifestyle that Italy does.”
The flat tax rule
The strength of interest was demonstrated by figures detailed by Italy’s Minister for the Economy who announced that over 150 applications for residency under this flat rate ruling were made by High Net Worth Individuals in 2018, a figure that Alasdair expects to increase significantly this year.
Alasdair outlines the scheme:
“In order to qualify applicants must become an Italian tax resident with accommodation in Italy. The scheme is open to all nationalities including Italian expats returning home with the only condition that applicants cannot have lived in Italy for nine of the past ten years.”
Successful applicants pay an annual €100,000 fee instead of the usual Italian-source income and gains tax of up to 43 per cent with foreign income sheltered from Italian tax. Members of their family are also able to benefit from this non-dom status for an additional €25,000 each. Non-dom status is granted for a maximum of 15 years and can be revoked earlier by applicants if necessary.
In addition Italy has one of Europe’s lowest levels of inheritance and gift tax and exemptions from capital gains on certain categories of art works and real estate.
Wealthy investors moving to Italy can choose between mountain, countryside, waterfront and city homes. Knight Frank’s properties between €500,000 and €1,000,000 include studios in Rome or Florence, elegantly restored apartments in Lucca and charming country houses.
Move up to €5,000,000 and €10,000,000 and the choice becomes even more alluring and varied. The Italian Tax & Lifestyle Report details a selection including a restored Castello in Umbria, a sixteenth Century palazzo in Venice and a modern villa with seven-bedroom on Lake Como.
Italy comes with a thrilling history that has produced legendary art and architecture, a cultural catalogue with more UNESCO World Heritage Sites than any other country worldwide, a winning geography and now several prudent financial regimes too.
For further information on Italian property and the new flat rate tax regime contact Cédric Roul at Knight Frank’s Italian Desk.