Tag Archive for: Italian Law

Translating legal documents for Italian Property Transactions

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Make sure you fully understand documents before you sign them

Translating legal documents is a highly specialised field. It demands not only legal experience but linguistic expertise.

In the event of any issues or litigation, the Italian version of contracts will always prevail. So it’s crucial to ensure that you understand every document thoroughly before you sign it.

Italian versions of legal documents prevail

All legal documents relating to Italian property real estate transactions need to go through a notary public (notaio).

The role of a notary is to oversee the sale and purchase, draw up the deed of sale and authenticate the transaction. In addition, the notary collects tax related to the transaction.

As Italian law is applicable to property sales in Italy, documents must be in Italian, independent of the nationality of the parties.

Many buyers from abroad prefer to have a version of documents in their own language. In fact, if buyers are not fluent in the Italian language, it is a legal requirement to have the deed of sale translated. A translator will also need to attend the signing of the deed of sale.

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The Italian property buying process

The process of buying a property in Italy is different to many other parts of the world. Firstly, the  buyer makes an offer on the property. If accepted, the buyer and vendor sign a Reservation Offer and the buyer puts down a small deposit. Secondly, if you decide to proceed with the purchase, the buyer and vendor sign a Preliminary Contract. At this point, the buyer puts down a further deposit, usually a minimum of 10% of the sale price. Thirdly, the parties sign the Deed of Sale. At completion, the balance of the sales price, along with other costs and taxes are payable.

It is important that parties to the transaction appreciate the implications of each of these steps. Deposits can be very difficult to get back and you may incur penalties if you back out of the sale. It is essential to ensure that your contracts stipulate certain terms and conditions.

Everything you sign during the purchase process has legal and financial implications

As purchasers, whether you are about to sign a  proposta irrevocabile d’acquisto (Reservation Offer), a  contratto preliminare di vendita (Preliminary Contract) or the atto di vendita (Deed of Sale), or any other property-related document. Everything that you sign sets out legal and financial terms pertaining to your Italian property purchase.

Translating legal documents

Many real estate agents use standard forms for contracts. The type of form where you fill in the blanks. Often, estate agents provide a translation of these. While the translation can of course be useful in gaining an overview, Italian legal language is technical, ritualistic, archaic and complex. These standard form translations are seldom completely accurate and can even be misleading.

We have managed a number of cases where buyers have been caught out by aspects of “boilerplate translations” relating to their Italian property purchases.

When signing the deed of sale, in the presence of a public notary, Italian law requires that a translator is present if purchasers are not fluent Italian speakers.

Our advice is to make sure that anyone you use for translating legal documents is qualified. Not only from a linguistic point of view but also in terms of legal knowledge. It is also important that you choose someone who does not have a vested interest in the transaction.

Finally …

Although it is not a legal requirement in Italy to engage a lawyer (avvocato), most experts advise that you seek independent legal advice before signing any paperwork. One of the main reasons for engaging your own lawyer is to safeguard your interests through the inclusion of any conditional clauses in contracts.

If you need any support or advice regarding a property transaction in Italy or translating legal documents, please get in touch. The De Tullio Law Firm team of lawyers, translators and professionals are here to help.

You may also be interested in Celebrating over 55 years of experience at De Tullio Law Firm.

Moving to Italy from the UK: Obtaining Permanent Italian Residency

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Visa requirements for moving to Italy from the UK post-Brexit

UK nationals are now subject to immigration requirements in Italy.

If you stay in Italy for more than 90 days within any 180 day period, you will need a visa.

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Becoming a permanent Italian resident post Brexit

Since January 1st, 2021, if you wish to become resident in Italy, you need to follow the same rules as non-EU nationals. You will therefore need an Elective Residence Visa (ERV).

This is a long-term visa for non-EU citizens who intend to live in Italy. Firstly, you must be able to prove that you own or rent a property in Italy. In addition, you must be able to evidence that you can support yourself autonomously. Your income must be from a source other than employment.

You should apply for an ERV through the Italian Consulate in London.

An ERV is valid for 1 year after which, it may be renewed at your Provincial police headquarters (questura). You will need to demonstrate that you still meet the original requirements for an ERV.

If you are experiencing difficulties obtaining an ERV or if your application has been rejected, you may be interested in reading this article: ERV case study.

UK nationals living in Italy prior to January 1st 2021

If you were resident in Italy before January 1st 2021, the UK’s Withdrawal Agreement from The EU protects your residency and citizens’ rights.

You can now apply for a Biometric Residency Card (Carta di Soggiorno Elettronica). The Biometric Residency Card is an electronic residence document for UK nationals and their families. It provides further evidence of your right to reside in Italy. Furthermore, Biometric Residency Card can replace other residency paperwork when you are travelling in Italy or other countries in the Schengen Zone.

Finally …

We understand that Italian residency matters can be confusing and difficult to navigate. If you have any questions about what action you should take or if you need help concerning an Elective Residence Visa or a Biometric Residency Card, please get in touch with us at: info@detulliolawfirm.com

 

Biometric Residency Card for UK Nationals Living in Italy

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What is the biometric residency card?

The Italian government has introduced a biometric residency card for UK nationals and their family members resident in Italy.

If you are a UK national and were living in Italy before 1st January 2021, you have the right to obtain an electronic residency card.

Family members of UK nationals who were resident in Italy by 31st December 2020 can also get an electronic residency card and, any family members joining UK nationals resident in Italy, even after the aforementioned date, are also entitled.

Why do I need a biometric residency card?

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The electronic residency card will provide further evidence of your rights under the Withdrawal Agreement and it will save you having to carry other papers such as your Attestazione di iscrizione anagrafica and/or your Permesso di soggiorno when you exit and enter Italy.

In addition, the card can be useful for administration purposes. For example if you need to renew your Italian ID card and need to show proof that you are resident in Italy.

How do I obtain the residency card for UK nationals?

You will need to apply for a biometric residency card. First, you need to book an appointment by sending a PEC email to your Immigration Office of the Police Headquarters (Questura) in the province of your residence.

You will need to attend your appointment in person. In order to issue a biometric residency card, you will have to supply biometric data in the form of fingerprinting.

The biometric residency takes some time to prepare. You will need to return to the questura to collect it when it is ready. Collection requires another check of your fingerprints so you will have to go in person to pick up your biometric card.

How do I apply for a card?

You will need to take the following to your appointment:

A valid identity document. If this is your UK passport, you will need to ensure that it has at least 6 months validity. If not, you will need to renew your UK passport;

Attestazione di iscrizione anagrafica, issued by your Municipality of residence, which proves registration by 31st December 2020; or, alternatively, self-certification of being registered with the anagrafe by 31st December 2020 and that registration has not been subsequently cancelled, pursuant to art. 46-47 D.p.r. 445/2000;

Permesso di soggiorno permanente if you have one or, alternatively, self-certification of being registered with the anagrafe by 31st December 2020 and that registration has not been subsequently cancelled, pursuant to art. 46-47 D.p.r. 445/2000;

Receipt of payment of € 30,46 for the cost of producing the document. Payable by postal order on CC no. 67422402 (account holder “MEF DIP.TO DEL TESORO VERS: DOVUTO RILASCIO CARTA DI SOGGIORNO” – reason for payment: “Importo per il rilascio della carta di soggiorno – Accordo di recesso UE/ UK”);

4 passport-sized photographs.

Validity of residency cards

For UK nationals resident in Italy less than 5 years, the electronic residency card is valid for 5 years. The card you receive will show the title, “residence card”.

If you are a UK national who has acquired legal and uninterrupted residence in Italy over a period of 5 years or more, including periods of stay before or after 31st December, 2020, the electronic residency card will be valid for 10 years. The card you receive will show the title, “permanent residence card”.

Finally …

We can help you with enquiries and support you through the process to obtain an Italian electronic residency card. Please get in touch with us.

 

You may also be interested in How do UK nationals obtain permanent Italian residency?

Italian Law of Filiation: A Family Law Case Study

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Italian law of filiation: the legal rights of children born in and out of wedlock

De Tullio Law Firm provided legal expertise regarding the Italian law of filiation at the Supreme Court of Western Australia.

The parties involved in the case about paternity and inheritance rights emigrated to Australia from Italy in the 1960s. Before ruling on the case, the court needed to understand the Italian law of filiation.

Case Background

In this case study, although we have disguised names and circumstances, we outline the main aspects of the Italian law of filiation that The Supreme Court of Western Australia took into consideration when assessing whether or not Giovanna Rossi, the plaintiff, was a legitimate child of the late Giuseppe Rossi and was therefore entitled to claim a share of her father’s inheritance.

The plaintiff

The plaintiff, Giovanna, issued proceedings in the Supreme Court of Western Australia regarding inheritance of her father’s estate. Following his divorce from Giovanna’s mother, Mr. Rossi re-married and had other children.

Giovanna was born in 1950. Her father and mother were not married at the time. They did however get married a couple of years after Giovanna’s birth.

In Italy, at the time of Giovanna’s birth, it was illegal for fathers to recognise any children born out of wedlock. Giovanna’s birth certificate therefore gives her mother’s maiden name, Bianchi.

However, Giovanna’s birth certificate contains a note stipulating that Giovanna is the legitimate daughter of Mr. Giuseppe Rossi. The birth certificate annotation follows the marriage of Mr. Giuseppe Rossi and Ms. Sofia Bianchi in 1953.

The defendants

The defendants in this case are Giovanna’s half-siblings. They are the children from Mr. Giuseppe Rossi’s second marriage. The defendants dispute Giovanna’s legal rights as an heir and beneficiary to Mr. Rossi’s estate because Giovanna was an “illegitimate” child. They maintain that the subsequent marriage between Mr. Rossi and Ms. Bianchi did not automatically give Giovanna the status of a legitimate child.

What rights does the Italian law of filiation provide?

Firstly, the Italian law of filiation has abolished the old distinction between children born in and out of wedlock.

Constitutional law has driven important changes to legislation regarding filiation with the aim of guaranteeing equality. The consequence of this legislative process has been to stipulate a single status for all children.

Reform of Italian filiation law

Filiation law reform, Riforma della filiazione, modified the Italian Civil Code – in particular, Italian Law no. 219 of 10 December 2012.  This law states that illegitimate children – since reforms in 1975 to Italian family law, known as, “natural children” – must not be subject to any discrimination because of the circumstances of their birth.

All children are equal in the eyes of the Italian law

Both legitimate and natural children therefore have the same status: figlio. All children have equal rights and parents have a responsibility toward their offspring. A child has the right to receive care, education, assistance in case of need and a share of any inheritance.

In other words, the Italian Civil Code, as well as other Italian legislation referring to the relationships between parent and child, only permits the use of the word “child” (figlio/figlia). There is no longer any distinction such as, il/legitimate, natural or adopted.

The provision of a uniform status of filiation means that all children have the same rights to receive care, education, assistance in case of need and a share of any inheritance and parents are responsible for providing these rights. In addition, the express intention of Law 219 of 2012 extends parental responsibilities to parents’ relatives.

2012 filiation reforms are retroactive

The Filiation Reform (Law 201/2012) is applicable to all people, not only those born after a certain date. This means that the abolition of the distinction between legitimate and natural/illegitimate children is retroactive. In other words, it is applicable to parent-child relationships prior to the Law 219/2012 entering into force on 1st January 2013.

A major effect of the abolition of the distinction between natural children and legitimate children is that natural children have gained an equal right to succeed to their parents. They are entitled not only to inherit a share of their “natural” parents’ estate but also to inherit from other relatives of their parents.

How was Italian law different before reforms?

Prior to reforms, there was a huge difference between the status of legitimate and illegitimate children in Italy. Illegitimate children had none of the legal rights afforded to legitimate children.

When Giovanna was born in the 1950s, there were only two ways to legitimate children born out of wedlock and give them the status of figlio. Either the parents could marry after the birth or, the father could make a formal  statement to a notary, declaring that he was the father of the child.

Legittimato quale figlio

Giovanna’s birth certificate contains the phrase “legittimata quale figlia”. This means that following the marriage of her natural parents, Giovanna acquired the status of child. She went from the condition of being illegitimate to a condition where she was recognised as having the status of a legitimate child with all the accompanying rights of being a child.

This was in accordance with applicable Civil Code and legislation in force at that time. Also, as previously mentioned, following reforms to the Italian law of filiation, there is no longer any distinction in Italy between children born in or out of wedlock.

Case outcome

According to the Italian Law, Giovanna Rossi does have the status of a legitimate child of Mr. Giuseppe Rossi, both under current applicable Italian law, as well as under legislation applicable at the time of Mr. Rossi’s marriage to Ms. Bianchi.

The event of a marriage between her natural parents gave Giovanna the status of child and, legitimated her as a child of Giuseppe Rossi and Sofia Bianchi in accordance with legislation in force since February 1955.

The Italian Family Law reform of 2012 abolished any distinction between legitimate children and natural/illegitimate children.

The Supreme Court of Western Australia therefore judged that Giovanna was indeed the late Mr. Rossi’s legitimate child and, as such, was entitled to receive a portion of his estate as her inheritance.

Finally …

At De Tullio Law Firm we provide legal advice and support in all fields of Italian law. Our particular specialties are Italian and cross border property, inheritance and family matters. If we can be of assistance, please get in touch.

You may also be interested in Partition of Property among Family Members.
You may also like to watch our info videos on the subject of Italian inheritance law.

De Tullio International Law Firm

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De Tullio International Law Firm. Solid, strong, stable legal expertise

At De Tullio Law Firm we provide independent legal advice in all areas of the law. The majority of our work focuses on managing a wide range of Italian and cross border legal matters. We are specialists in property, family and inheritance law.

A passion for the law led us here

De Tullio Law Firm: Combined experience of 55 years

Giovanni De Tullio. Founding Partner at De Tullio Law Firm.

Giovanni De Tullio founded De Tullio Law Firm in 1965. In addition to being a lawyer, Giovanni was a notary (notaio) for over 30 years. As a result, Giovanni brings tremendous experience and knowledge of Italian legislation to the team. Whether clients are purchasing or selling a home, gifting a home to a child, making a will or incorporating a company in Italy, Giovanni’s understanding of the Italian State’s requirements is an invaluable resource.

Following in his father’s footsteps, Giandomenico De Tullio also became a lawyer.

Giandomenico De Tullio. Managing Partner.

After a decade working overseas at international legal firms, as well as at the European Commission, Giandomenico joined Giovanni at De Tullio Law Firm.

Aside from being a member of The Italian Bar Association, Giandomenico is also a full member of Society of Trusts and Estate Practitioners. STEP is the world’s leading professional body for practitioners in the fields of trusts, estates and related issues.

Giandomenico is also an active representative in a number of not-for-profit government organisations whose aim is to develop and promote economic and cultural relations.

Right beside you

Because we have over 55 years of experience providing independent legal advice, we understand that property investments, or planning inheritance is not just a complex legal journey but also a personal one.

Our knowledge of Italian and cross border property, family and inheritance law gives us unique insights into the processes involved. We pride ourselves on giving each of our clients the individual care that their case deserves.

Thanks to the dedication of our lawyers, associates and professional staff, we offer an extraordinarily high level of service, responsiveness and attention to detail.

De Tullio Law Firm. Serving clients worldwide

Clients include both individuals and companies seeking legal advice, support and services. Our multi-lingual team serves clients throughout Italy.

Finally …

Thank you for visiting our website. We hope you find the information useful. If there is anything you would like us to cover in an article or, if you would like to discuss a legal matter with us, please get in touch. We look forward to hearing from you.

Buying Property in Italy

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The Italian property market

Dreaming of buying property in Italy? The country’s rich heritage, magnificent buildings, cities steeped in history and regions with landscapes are as sublime as they are varied. This territorial diversity and widely different prices per square metre of property make the Italian real estate market very interesting.

Property Prices

The average price per square metre for Italian property was around €2,300 at the end of 2019.

However, it was much lower in southern Italy. In Puglia for example, it is possible to buy a house for 1,300 €/m².

If you’re looking for a property in Florence or Venice, prices are much higher: expect to pay more than 5,000 €/m² for an apartment in Venice.

Fees and taxes

Before committing to the purchase of a property in Italy, it is essential to consider the inherent costs.

First of all, as a foreign national, you are more likely to use a real estate agent. Estate agent fees vary and can be as much as 4% of the selling price, i.e. €12,000 for a property worth €300,000.

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In Italy, a notary public (Notaio) must oversee the transaction on behalf of the Italian state. The notary’s fees are also variable: allow for between 2% and 4%.

However, in Italy, the most important fees are the registration fees, which represent 9%, or €27,000 for a property worth €300.000. That said, these costs should be put into perspective, as the rate is based on the land registry (cadastral) value of the property, which is generally lower than the actual value.

As for property taxes, they vary between 0.46% and 1.06% per annum. Nonetheless, these are costs that should be anticipated before buying a property in Italy.

Buying property in Italy: the legal steps

It is crucial to clarify the situation before buying. Italian property law is complex and may differ from your own country. You should always seek independent legal advice before signing any paperwork.

Reservation Offer

Once you decide to purchase a property, you and the vendor will sign a reservation offer. This is an irrevocable letter of intent to purchase (proposta irrevocabile d’acquisto) and means the vendor agrees to remove the property from the market for a defined period of time – usually two weeks.

Due Diligence

While the property is off the market, you should conduct legal checks and searches into the property. This includes verifying property ownership, planning permits, zoning regulations and mortgages on the property. In addition, we would recommend that you have a property survey conducted.

Deposit

Following your due diligence if you decide to proceed with the purchase, you will have to pay a deposit. If the sale falls through, you will get your deposit back in full. If on the other hand you continue to completion, the deposit will form part of the agreed purchase price.

It is advisable to sign a preliminary contract (contratto preliminare di vendita), even though it is not a compulsory step in the process. Having a preliminary contract allows you to fix terms and conditions of the sale based on your due diligence.

Deed of Sale

Any conditions contained in the preliminary contract will be included in the deed of sale (atto di vendita), which you sign when you complete the transaction.

It should be noted that when one of the two parties does not understand Italian, a second draft of the deed in your language is required, but the Italian version of the deed will prevail in a court of law.

Finally …

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. If you would like to discuss your situation or, if we can be of assistance, please get in touch.

International Succession

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Foreign nationals with a second home in Italy are subject to international succession procedures

International succession pertains to the estate of a person who dies in a country other than that of their nationality or residence.

It is likewise applicable to someone who leaves movable or immovable assets in a country other than that of their citizenship or residence. If, for example, you are a foreign national who owns a second home in Italy, your estate will be subject to international succession procedures.

In August 2015 new EU regulations governing inheritance came into force. These regulations, known as Brussels IV, aim to simplify and accelerate international inheritance matters and make cross-border succession procedures more efficient. Prior to the introduction of Brussels IV, international succession laws differed from country to country.

Since its introduction, there have now been a number of cases regarding the interpretation of the new EU regulations. One such international succession case came to court in Salerno in 2018.

The case involves two brothers who co-owned three properties in Italy. In 2016 one of the brothers, an Italian citizen, died in New York where he was a resident. He died intestate meaning he didn’t leave a Will.

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One of the decedent’s six brothers is a co-owner of the three Italian properties. He took legal action to wind up the Italian property co-ownership. He subsequently filed an inheritance claim for his brother’s share in the property.

Article 24 paragraph 1 of EU Regulation 1215/2012 (so-called “Brussels I bis”) governs dissolutions of co-ownerships. It entrusts such cases to the court of the country in which the property is located. In this case therefore, Italy.

For international succession, to make life simpler for those you leave behind, it is crucial to have a Will

For estate divisions, the court in Salerno applied the Brussels IV regulation.

Article 4 of the regulation establishes that the jurisdiction which rules on the succession as a whole, is that of the country where the deceased was habitually resident at the time of death. However, Article 10 provides for subsidiary jurisdiction of courts in which the estate is located – if the deceased was a national of that country at the time of death.

Returning to the case in question. The court of Salerno considered that the deceased was habitually resident in the State of New York. It therefore ruled that the case should be governed by the law of New York State.

Adding to the complexity of this case, rules of private international law are also relevant. The rules governing New York private international law provide that the law of the place where the property is located applies to successions concerning immovable assets.

The judge has adjourned the case until parties produce U.S. regulatory sources. This is something of a landmark case. It sets a precedent inasmuch that judges have the power and duty to ascertain foreign regulatory sources of their own volition.

Although Regulation 650/12 aspires to harmonise international succession, in terms of effectiveness it is confusing and open to interpretation.

For international succession and division of estates, Italian inheritance law specifically provides for rights to so-called, “forced heirs”. Their inheritance quota is guaranteed.

However, in countries with common law systems, such as the UK and the USA, testators can rule on how estates should be divided.

Brussels IV allows testators to make a choice of law in their Will

Article 22 of Brussels IV allows individuals resident overseas to elect which country law should govern their inheritance.

Where individuals have multiple nationalities, they may elect to have any one of their nationalities apply to their Italian assets.

In effect, this means that you can avoid any jurisdictional confusion after your death. However, you need to take action by making, “Choice of Law Codicil” in your Will.

Finally …

If you are in the process of drafting, or reviewing, your Will, you should consider aspects such as foreign matrimonial regimes, usufruct, tax consequences, joint ownership structures and other foreign proprietary rights before deciding which law to apply to the devolution of your estate.

Should you need further information concerning the topic, our legal professionals will be happy to discuss your situation. Please contact De Tullio Law Firm at the following email address: info@detulliolawfirm.com

 

You may also be interested in Applying A Power of Attorney in Italy

Italian Income Tax – New Measures from 2020

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Italian Income Tax Relief

In order to foster economic growth, as part of the Italian budget law, art. 5 of, “Decreto Crescita” came into effect in December 2019. Legislation provides for significant changes to the Italian income tax system for anyone who transfers their tax residence to Italy from 2020.

The law is retrospectively applicable to anyone who transferred their tax residence to Italy from 30th April 2019.

Who can benefit from Italian income tax measures introduced in the 2020 budget law?

Legislation on income tax now extends to foreign football players and other professional sportsmen and women. The law establishes a 50% reduction on income tax. It applies for 5 years provided the sports professional maintains their tax residence in Italy for at least two years. For those not from the sports arena, tax relief of 70% is also available. If for example you generate an income in Italy through employment, self-employment or from business start-up activities.

Income tax relief of up to 90% is available for those who transfer their residence to one of the following regions: Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sardinia, Sicily.

In order to take advantage of tax benefits, certain conditions apply. You can transfer your tax residence so long as you were not resident in Italy for the previous 2 tax years. You must undertake to reside in Italy for at least 2 years and, your work-related activity should mainly be in Italy.

There is no requirement for Italian citizens returning to Italy as tax residents from 1st January 2020 to have previously been registered with AIRE (the Registry Office for Italian Citizens Residing Abroad).

Tax relief is applicable for 5 tax years. However, a 50% income tax reduction is available on income you generate in Italy for a further five tax years if you have at least one minor or dependent child. This also applies if the child is in pre-adoptive foster care.

In addition, you must become the owner of at least one residential property in Italy. Your property purchase can take place either following your transfer to Italy or in the twelve months preceding your transfer. You can purchase property in your name, a spouse or partner’s name, in your children’s name or in co-ownership.

High net worth individual Italian income tax system

The 2017 Stability Law remains in force regarding foreign income from real estate investments, dividends, capital gains and other income.

This high net worth individual tax regime  is available if you have not been a tax resident in Italy for the nine (out of ten) years prior to transferring to Italy. The advantage consists in paying a substitute tax of € 100,000 on all income derived from abroad. Sports professionals (football players, basketball players, etc.) can benefit from this tax system.

Flat Tax

The Stability Law of 2019 includes a flat tax regime. This regime is aimed at individuals with a pension or another source of income from outside Italy. You can transfer residence to certain municipalities in the south of Italy and, provided you were not resident in Italy in the five previous tax years, you can opt to pay a flat-rate tax of 7% on your income from abroad.

Building-related taxes

Deductions for energy re-qualification (65%), building renovation (50%) and furniture and household appliance bonuses (50%) concerning the purchase of new furniture for renovated buildings are available.

A new “Facade Bonus” allows for 90% deductions on documented expenses relating to refurbishing or restoring external facades of buildings. As any work to facades must comply with technical regulations, work needs prior assessment and permission.

Capital Gains

The budget law also introduces changes to real estate capital gains. A substitute tax is available if a principal residence or a second home sale meets certain conditions. The substitute tax starts at a rate of 20% on sales of properties that took place until 31 December 2019. It rises to 26% for property sales from 1 January 2020. The application of this regime is optional and should be requested by the notary on the date set for the completion of the sale.

Company shares

The budget law offers terms for recalculating the value of investments in unlisted companies up to January 1, 2020. The drafting and certification of the appraisal, as well as the payment of the substitute tax is due by 30 June 2020.

These terms only apply to private individuals with equity investments unrelated to business operations. In particular, the aforementioned legislation allows the revaluation of equity investments held in companies not listed on regulated markets. Individuals must hold investments at 1 January 2020 and require a sworn appraisal report by 30 June 2020 when the substitute tax of 11% is payable.

Company assets

The budget law allows the revaluation of company-owned assets. Based on 2019 financial statements, the law introduces reduced substitute tax rates:

– from 16 to 12 per cent for depreciable assets;

– from 12 to 10 percent for non-depreciable assets.

In addition, a new provision allows companies to release credit balances recorded in their accounts against the recognition of higher values ​​at a rate equal to 10%.

This option does not concern IRPEF entities with simplified accounts.

New IMU

The budget law introduces a new version of IMU. It sees the merger of former property tax IMU (Imposta Municipale Propria) and the municipal service tax  TASI (Tributo Servizi Indivisibili) to create a new IMU (Imposta Municipale Unica) tax.

Finally …

With over 55 years experience of cross border and Italian property transactions, we understand that Italian property-related tax matters can be confusing. If you would therefore like further clarifications or want to discuss your situation, please contact us for a free consultation. We are here to help. 

 

You may also be interested in Do beneficiaries have to pay taxes on inheritance?

Benefit of Inventory. Accepting An Italian Inheritance

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How to protect your personal assets from debts associated with an Italian inheritance

In this article we explore what acceptance of an Italian inheritance under the benefit of inventory entails.

At De Tullio Law Firm, we understand that when a loved one dies there are many issues that need attention at an extremely difficult time. Having to make funeral arrangements, notifying friends and family and the grieving process.

On top of this, there are also critical legal matters that require consideration.

If your loved one left assets not only at home but also in Italy, estate administration is more complex. As cross border legal specialists in Italy, this is an area in which our legal team can help. Should you wish to discuss your situation with us, please get in touch.

Get Your FREE Guide to Planning Your Inheritance in Italy

Our PDF guide explains the ins and outs of preparing your inheritance under Italian law

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Italian estate inheritance options available to heirs

Inheritance consists of assets (moveable and immovable property) and liabilities (debts).

Italian law stipulates that an heir becomes responsible for settling any debts the decedent may have left.

The acceptance of an inheritance sometimes presents a risk. If the value of assets included in the inheritance is less than liabilities, heirs are responsible for settling debts from their personal finances.

In Italy, inheritance always requires acceptance or refusal. Italian law provides three inheritance options in this regard.

Unconditional acceptance of the inheritance

An heir inherits all the assets subject to succession. The beneficiary assumes personal liability for the decedent’s liabilities, even if debts exceed the value of the assets. An heir therefore becomes liable in a personal capacity (with their own finances) for any portion of the decedent’s debts that the inheritance does not cover.

Refusal of the inheritance

This means an heir completely renounces the succession. In effect, an heir renounces all rights to the inheritance. The statutory arrangement is that the share of inheritance is then subject to a ‘right of representation’. Thus it passes to an heir’s children, and if there are no children, to any other heirs.

Acceptance under the benefit of inventory (accettazione con beneficio di inventario)

This is usually the best option if you are uncertain whether the inheritance comprises debts and other succession charges.

What is the acceptance of inheritance under benefit of inventory?

According to Article 490 of the Italian Civil Code, acceptance under the benefit of inventory is an act by which a person declares the acceptance of inheritance but wants to protect personal assets from becoming entwined with those of the deceased.

Usually, the assets of the heir and that of the deceased are merged into one, so not only does the heir inherit movable and immovable assets, but also any debts and liabilities.

Whoever accepts an inheritance must settle debts, so caution is advised. In order to protect an heir’s personal assets, the acceptance of the succession is subject to a condition, the benefit of inventory. This permits the heir to assess what the inheritance actually comprises before deciding whether or not to accept it.

There is no obligation for an heir to accept the inheritance. Drawing up an inventory of debts and assets allows the heir to make an informed decision about the inheritance: either to accept and pay debts from the assets inherited, or to refuse the inheritance because debts outweigh inherited assets.

Effects of acceptance under benefit of inventory

The first advantage is that the estate of the deceased remains distinct from the estate of the heir. In essence, this means that an heir does not have pay the decedent’s debts for a value greater than that of the inherited assets. In addition, creditors cannot recoup any debts from the heir’s personal assets.

How to accept the inheritance under the benefit of inventory

To accept an inheritance using the benefit of inventory, there are some fundamental requirements. Article 490 of the Italian Civil Code covers the procedure.

Firstly an heir has to file a declaration written in Italian, with a notary or a clerk of court in the locality where the succession procedure is taking place. Secondly, a detailed inventory of all the assets belonging to the inheritance is necessary.

Within a month of filing the above mentioned declaration, the notary or clerk must transcribe it in the relevant land registries. This transcription then permits the heir to pay the creditors and the bequests.

Finally …

If you are in the difficult situation of considering whether to refuse or accept an Italian inheritance, using the option of benefit of inventory may be the way forward for you.

You may also be interested in Inheritance Law and Taxes

Homes for 1 Euro in Sambuca, Sicily (Italy)

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Is it true that there are homes for 1 Euro in Sambuca?

To combat dwindling populations and to attract Italian and foreign investors to revitalise their areas, a number of Italian villages, towns and cities, have launched charm offensives by putting a number of houses up for sale for the symbolic sum of 1 Euro. Dream homes for €1 in Sambuca is the latest 1 Euro property scheme in Italy. This is how the Sicilian Municipality of Sambuca is promoting tourism and highlighting depopulation issues. Sambuca is in the Province of Agrigento.

News of €1 property sales in Sambuca spread further through a CNN article on 18th January 2019.  Local officials say, “It’s not the first Italian town to lure in outsiders with tempting offers but, Sambuca is scrapping red tape to make sure any interested investors can more or less make their purchase right away”.

As opposed to other towns that are merely doing this for propaganda, this city hall owns all the homes for 1 Euro in Sambuca on sale,” says Giuseppe Cacioppo, Sambuca’s deputy mayor and tourist councillor. “We’re not intermediaries who liaise between old and new owners. You want that house, you’ll get it in no time.”

Are there any conditions attached to the purchase of homes for 1 Euro in Sambuca?

New owners must commit to refurbishing their choice of the crumbling 40 – 150 square meter dwellings within three years. Renovation costs start at €15,000 (about $17,200). Owners will also need to cough up a €5,000 security deposit that will be returned once the remodelling is complete.

With the population dwindling, Cacioppo says the town needs outsiders to prevent it from falling into ruin. “We can’t afford to lose our lovely Arab heritage. Luckily, foreigners are lending a hand in this rescue crusade.” (Source: CNN).

1 Euro houses at auction

As with all 1 Euro house schemes around Italy, sales take place in public auction (vendita con incanto).

It’s impossible to tell what you are taking on just from looking at a few photos of a property.

In some countries house auctions are common. In Italy however, they are not. There are no legal packs, which contain essential information including official titles and searches, property information and planning permission. In effect, you are responsible for conducting property-related searches.

To avoid buying what seems like a bargain but, subsequently turns out to be a money pit, you should inspect the property before deciding to make a bid.

Finally …

While €1 properties may seem like a great opportunity, buyer beware! Conditions always apply.

There are plenty of other reasonably-priced houses in Italy without the terms and conditions attached to €1 property schemes. These properties may be a better option for you because you can undertake renovation at your own pace and on your own terms.

Before making any type of property investment in Italy, you should seek independent legal advice on matters such as ownership titles, zoning, planning, structure and conditions of sale and purchase.

If you are considering buying a property anywhere in Italy for 1 Euro, or more, please free to contact us via email or fill in our contact form.

 

You may also be interested in How to get a mortgage in Italy