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Private buyers reap the rewards in Italy

20th March 2008 Print
Private buyers reap the rewards in Italy Taxing times for Italy? Italian tax laws have recently changed and it is private buyers looking for holiday homes, supplemented by holiday rentals that are now streets ahead compared to the taxing times of old.

Considerably lower completion costs and the potential to bypass capital gains tax will certainly benefit the already formidable Italian property market.

Non-professional investors who are looking for a holiday home that they will enjoy for at least five years, or a permanent residence, are undoubtedly the winners in the Italian property market. New tax laws now favour this sector of the market with dramatic tax benefits. Purchase costs in Italy used to be as high as 15-17%, but new rulings mean that this figure can decrease to approx 4% - 5%, which is a huge gain in some cases.

Furthermore, after five years of property ownership owners, even holiday home owners, are exempt from capital gains tax in Italy. Capital gains tax stood at 12% but under new rulings this has been raised to 20%, so long term investors seeking stability gain considerably. This coupled with inheritance tax only on high value properties and still significantly lower than that of UK death duties, is also a big factor to mature individuals looking to invest here.

Sarah Ferrara, Managing Director of Garda Homes, says, “To gain some perspective of just how beneficial the new taxs laws are, if we take the featured two bedroom apartment in Caneto, near the popular Lake Garda town of Salò, as an example, we see that under the old rules taxes on this property would have been £16,500. However, under the new rulings this figure drops dramatically to around just £2,250; the savings are evident for all to see. Furthermore, if the owner becomes an Italian resident within 18 months of purchase this figure drops again to around just £600. Therefore those looking to invest into the Italian property market to enjoy the benefits of this region also gain significantly financially. The new tax laws will undoubtedly bring a resurgence of buyers back to Italian shores which will further strengthen this market which has performed well over the last decade.”

Property prices in Lake Garda are currently achieving 5% - 8% capital appreciation per year and the rental rewards are high. This particular property will earn approximately £7,500 to £9,000 rental per year because it has the three winning factors: lake views, swimming pool and restaurant within walking distance.

Garda Homes have hundreds of Lake Garda properties to suit all budgets and desires with prices starting from just £65,000 and rising up to around £7 million, with new properties being added daily.

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Private buyers reap the rewards in Italy