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Italy

Country overview

Italy is in the Mediterranean section of Europe, bordering with France in the north-west, Switzerland and Austria in the north and Slovenia in the north-east. The peninsula is surrounded by the Ligurian Sea, the Sardinian Sea and the Tyrrhenian Sea in the west, the Sicilian Sea and the Ionian Sea in the south and the Adriatic Sea in the east. There is a great deal of variety in the landscape in Italy, although it is characterized predominantly by two mountain chains: the Alps and the Apennines. The former extends over 600 miles from east to west. It consists of great massifs in the western sector, with peaks rising to over 14,000 feet, including Monte Bianco (Mont Blanc), Monte Rosa and Cervino (the Matterhorn). The the chain is lower in the eastern sector, although the mountains, the Dolomites, are still of extraordinary beauty.

Data for Italy collected from the CIA Fact-book – Italy

Country Name: Conventional long form: Italian Republic (Conventional short form: Italy)

Location: Southern Europe, a peninsula extending into the central Mediterranean Sea, north-east of Tunisia

Area: Total: 301,230sq. km.; Land: 294,020sq.km.; Water: 7,210sq.km. (Note: includes Sardinia and Sicily)

Land Boundaries: Total: 1,932.2km.; Irrigated Land: 27,500sq.km. (2003)

Land Use: Arable land: 26.41%; Permanent crops: 9.09%; Other: 64.5% (2005)

Border countries: Austria 430km, France 488km, Holy See (Vatican City) 3.2km, San Marino 39km, Slovenia 232km, Switzerland 740km

Coastline: 7,600km

Climate: Predominantly Mediterranean; Alpine in far north; Hot, dry in south

Terrain: Mostly rugged and mountainous; some plains, coastal lowlands

Geography: Strategic location dominating central Mediterranean as well as southern sea and air approaches to Western Europe

Population: 58,133,509 (July 2006 est.)

Age Structure: 0-14 years: 13.8% (male 4,147,149/female 3,899,980); 15-64 years: 66.5% (male 19,530,512/female 19,105,841); 65 years and over: 19.7% (male 4,771,858/female 6,678,169)

Average Age: Total: 42.2 years

Ethnic Groups: Italian (includes small clusters of German-, French-, and Slovene-Italians in the north and Albanian-Italians and Greek-Italians in the south)

Religions: Approximately 90% Roman Catholic (about one-third regularly attend services); mature Protestant and Jewish communities and a growing Muslim immigrant community

Languages: Italian (official), German (parts of Trentino-Alto Adige region are predominantly German speaking), French (small French-speaking minority in Valle d'Aosta region), Slovene (Slovene-speaking minority in the Trieste-Gorizia area

Government Type: Republic

Capital: Rome (Geographic coordinates: 41 54 N, 12 29 E)

Administrative Divisions: 15 regions (regioni, singular - regione) and 5 autonomous regions (regioni autonome, singular - regione autonoma); Abruzzo, Basilicata, Calabria, Campania, Emilia-Romagna, Friuli-Venezia Giulia, Lazio, Liguria, Lombardia, Marche, Molise, Piemonte, Puglia, Sardegna, Sicilia, Toscana, Trentino-Alto Adige, Umbria, Valle d'Aosta, Veneto

Independence: 7 March 1861 (Kingdom of Italy proclaimed; Italy was not finally unified until 1870)

Currency: Euro (EUR)

Labour Occupations: Agriculture: 5%; Industry: 32%; Services: 63% (2001)

Unemployment Rate: 7.7% (2005 est.)

Inflation Rate: 2% (2005 est.)

Agriculture Produce: Fruits, vegetables, grapes, potatoes, sugar beets, soy-beans, grain, olives; beef, dairy products; fish

Railways: Total: 19,459km; Standard gauge: 18,037km 1.435-m gauge (11,354 km electrified); Narrow gauge: 123 km 1.000-m gauge (122 km electrified); 1,299 km 0.950-m gauge (161 km electrified) (2005)

Roads: Total: 479,688 km - paved: 479,68 km (including 6,478km of express-ways) (2004)

Airports: Total: 98 - Over 3,047m: 7; 2,438 to 3,047m: 30; 1,524 to 2,437m: 16; 914 to 1,523m: 31; Under 914m: 14 (2006)

Ports & Harbours: Augusta, Genoa, Livorno, Melilli Oil Terminal, Ravenna, Taranto, Trieste

Mains Telephones: 25.957 million (2004)

Mobile Telephones: 62.75 million (2004)

Television Stations: 358 (plus 4,728 repeaters) (1995)

Internet Users: 28.87 million (2005)

Country Internet Code: .it

Why invest in Italy

Italy is an enchanting country of colour and contrast. Magnificent architecture, great food and wine, inspiring arts, classic hilltop towns all continue to entice visitors every year…

Natural And Cultural Factors

1. Abundance of culture, history and magnificent architecture.
2. Stunning variation in natural beauty, from lakes, mountains and lush vegetation to rugged or sandy beaches.
3. Warm Mediterranean climate.
4. Recreational activities to cater for all needs, from skiing, hiking or beach holidays to sightseeing and cultural activities.
5. Dream lifestyle, modern systems and friendly people make Italy an easy relocation destination.

Economic Factors

• No capital gains tax on profits from Italian property, creating maximum returns on investment.
• Possibility to cut purchase costs in half by becoming a resident.
• Prices remain relatively low, compared to many EU destinations.
• Capital growth of 20% per year in some locations. Many new markets in Italy still remain undiscovered and ripe for investment.
• Possibility to renovate beautiful old Italian houses into fabulous residences that earn high rent in peak season.
• Italy is at the hub of the low cost flights revolution, forever enhancing its strong tourist industry.
• The Italian government offers investors grants to reform rural.
• Italy has pioneered property tax reforms, offering great opportunities for the rural renovator, including substantial VAT discounts.
• EU member country.
• Economic and political security.
• Only 2 ¼ hours direct flying time from UK.

Summary

Italy’s booming and ever expanding tourist industry is a clear indicator of a healthy investment climate. Latest price rises in key locations of Italy were around 22% last year while Italian property remains relatively cheap compared with many other EU countries.

Flying to Italy has been revolutionized by budget airlines, so wherever you choose to invest, your property will be readily accessible. Variety in property type and prices are an added advantage, making Italy an ideal investment for a second or holiday home destination. A gradual move away from the more popular destinations towards some more hidden investment hotspots is the current trend while today property in southern regions such as Calabria is well regarded as a highly promising investment.

Legals and taxes

Italy Investment Property - Tax Planning

Italy’s tax system can be complicated and it is important to consult an expert tax advisor when considering your Italian property investment. Here you can obtain a brief guideline to Italy’s property tax system.

Italian property tax, ICI, is charged to anyone who owns land in Italy and this is charged at between 0.4 and 0.7% depending upon the local authority and the size, location and category of property you purchase. If the property is classed as uninhabitable or it is being restored, the tax is reduced by 50%.

ICI is paid in two instalments – 90% by the 30th June each year and 10% between the 1st and 20th December. If the tax is not paid on time, a surcharge of up to 200% can be levied.

Tax on Rental Income

Tax is charged on income received from your property rentals in Italy and you can deduct from this any of your expenses for property maintenance. The rate can be anything from 19% to 46% depending on the property and rental conditions.

Capital Gains Tax

Italy has not charged capital gains tax since 1993 and instead it is incorporated into the ICI.

Inheritance/Wealth Tax

Unlike many other countries, Italy does not charge a wealth tax.

Stamp Duty

If the property is purchased from an individual, the rate is 11% of the government valuation. The value of the property is not the purchase price itself, but the figure assessed by the local tax office and it is calculated from official tables.

UK-Italy Tax Treaty

There is a double tax treaty between Italy and the UK and this protects the investor from paying tax on his Italian assets in both countries

Please contact us if you need further information!