While in 2001 and 2003 government has seen 80 billions Euros repatriated to Italy, with over 20% of these funds flowing into real estate, there is a similar picture these days. So far, Italy’s third tax amnesty, so called Scudo Fiscale, has brought in an estimated 95 billion Euros already. Owner of the repatriating cash will have to pay a one-off 5 percent penalty, but than they can invest the rest or pay into an account. There is no doubt that the new money flowing back to Italy will be used in a variety of ways. It is expected that much of this will find its way into the property sector as analysts estimate as well. The effect might be positively driving the market from 2010.

Analysts are not sure yet how much will be invested in real estates and also when it will hit the market. People might park the money for a while, waiting for the market to become more interesting. Regions who will benefit the most from the repatriation cash flow might be Lombardy, Emilia Romagna, Veneto and Tuscany, whereby Tuscany is still pretty much dominated by foreigners as it proved quite stable during the recent economic turmoil’s. BUT, also in Tuscany, prices where put under pressure. Old Tuscan farmhouses in great locations are still on shopping lists of wealthy foreigners. 2010 will be the year of the breakthrough for fractional in Europe with several new fractional developments in place or to be launched. One of the great examples is Castello di Casole near Siena, a fractional ownership model for beautiful farmhouses offering the finest luxury amenities part with fine Tuscan living. As far for repatriating Italians, professionals and small businessmen are among those to take advantage of the tax amnesty and they are also expected to invest in real estate.

In general it can be said, that the overall impact on the market by Italy’s Scudo Fiscale will not be extraordinary and more likely niches such as high-end residential property will benefit more than others.

Posted By: Peter Rabitz