Investing in The Italian Real Estate Market During Brexit
Many thanks to everyone who joined us for interesting and stimulating discussions at our online Investing in The Italian Real Estate Market During Brexit conference. The event was organised by the Italian Chamber of Commerce for the UK (ICCIUK) on 16th October, 2020.
The Investing in Italian Real Estate During Brexit event was sponsored by the British Chamber of Commerce for Italy. Guest speakers were from the British Embassy in Rome, De Tullio Law Firm, an ICCIUK associate, and A Place in The Sun. The event was moderated by Enrico Franceschini from La Repubblica newspaper.
Aimed at UK investors in the Italian real estate market at a crucial historical juncture, the webinar offered participants a unique opportunity to receive the latest updates on rights for UK citizens in Italy from representatives of the UK government; to get more and exclusive information from experts in the sector on Brexit negotiations and to understand the possible effects that changes in relations between Italy and the UK will have on the Italian real estate market.
You can watch a recording of the event here. Read on for a few of the key points raised during the webinar.
UK Citizens’ Rights in Italy
As a UK national, you still qualify for the same rights as an EU national until 31st December 2020. If you plan to reside in Italy after 31st December 2020, you will need to take action to become an Italian resident with your local municipal registry office before the end of 2020.
The British Embassy in Rome, in partnership with the International Organisation for Migration (IOM) has drafted a new guide on registering UK nationals and on issuing the new Withdrawal Agreement attestazione (Attestazione di Iscrizione Anagrafica). The guide has been published by the Associazione Nazionale Comuni Italiani (ANCI) and sent to every one of the 7,900 town halls in Italy.
The Italian government has also published information in English for UK nationals on how to register residency in Italy. An example of the Withdrawal Agreement attestazione can be found on the last page of this attachment issued to Italian municipalities in February 2020.
The IOM is available to provide help for UK nationals in registering. You can find their details here in the UK Nationals Support Fund section of the UK Government Living in Italy Guide.
You will also need to exchange your UK driving licence for an Italian driving licence before December 31st, 2020.
Investing in Italian Real Estate Post-Brexit – The Legal Position
Property investments are not governed under EU legislation.
Property ownership has always been based on sovereign laws which are set by individual countries. When you buy a property in, for example, England, the applicable law is that of England and Wales. When you buy property in Italy, your purchase is governed by Italian legislation.
Property matters are regulated under Italian law according to the principle of “reciprocity”. In simple terms, you can invest in the Italian real estate market provided your home country allows Italian nationals to invest there.
Reciprocity is considered to exist for EU member states without any need to verify it. This will continue for UK nationals until the Brexit transition period ends on December 31st, 2020.
Now that the UK has left the EU, verifying reciprocity has again become an issue.
According to the Italian Foreign Ministry, which is responsible for clarifying such matters, even if the UK and EU do not reach an agreement, reciprocity will continue after the Brexit transition periods ends because the UK, as part of its commitments within the World Trade Organisation does not set any restrictions for foreign investors (and therefore for EU and Italian nationals) to invest in its internal real estate market.
As members of the World Trade Organisation, both the UK and Italy signed up to the GATS (General Agreement on Trade in Services) in 1995. Commitments made under the GATS by both the United Kingdom and Italy allow for the purchase of real estate properties. There are no limitations regarding reciprocal market access or national treatment of foreign purchasers. The reciprocal commitments made within GATS, mean that there are no obstacles, for the foreseeable future, regarding the purchase of real estate by UK or Italian nationals in the UK or Italy.
Italian Inpatriate Tax Regimes
Over the past few years, Italy has introduced a number of attractive tax schemes aimed at people relocating to Italy. Of particular interest are the: High Net Worth Individual Tax System, which provides for an annual €100 thousand fixed tax rate for foreign nationals and the 7% Flat Tax System, which allows individuals with an income from a foreign pension, or other source abroad, who move to a municipality with populations not exceeding 20000 inhabitants in the Regions of Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily, to have their foreign income taxed on a flat-rate basis of 7% for a 10 year period.
If you need any support with Italian residency, property, tax or inheritance matters, please get in touch. We are here to help.