Investing in real estate in Italy: the consequences of global warming
The consequences of global warming in Italy are before everyone’s eyes. Here are a few : Summer temperatures remain very high for several weeks, especially in large cities. During July and August 2017, Bologna, for example, experienced maximum temperatures above 35 ° during most of these months. In the same period, most Italian cities, both in the North and in the South, recorded maximum temperatures well above 30 °. Air pollution due to urban traffic is becoming more and more dangerous, forcing municipalities to limit traffic. Summer storms, due to masses of very hot air that meet the cold draft from the north, are becoming increasingly violent, causing flooding. We see phenomena never seen before, such as water spouts that cause considerable damage and flooding. Floods and landslides are becoming more frequent. The sea level increases by about 3 mm per year, it is already 20 cm higher than at the beginning of the century, facilitating the floods and the breaking of the waves on the coasts Beaches undergo erosion which shrinks them and in some cases has already completely carried them away. Some bars and restaurants on the beach had to be closed. Jellyfish often invade the Italian coasts, especially in the center and south, making swimming difficult, unless you’re staying in a water no deeper than 130 cm. How to invest in real estate by keeping away from all the pernicious consequences of global warming? These are the precautions to be taken, in my humble opinion, with respect to each problem listed above: Avoid investing in large cities, aunless there is a particular interest in doing so. It is very likely that real estate in the sea and the mountains will be more and more sought after, and valuable, as people want to leave the cities too hot in the summer, at least for the holidays. It is better to equip yourself with a green car, electric, hybrid or with LPG or natural gas, which will still be able to circulate. Find out more about the meteorological phenomena observed in recent years and ask the municipality for a map of the flood zones. The Adriatic coast to the east is less affected by the boiling air coming from Africa: water spouts and severe thunderstorms are therefore much less frequent than on the west coast and on the islands. Look carefully at the land upstream of the property you would like to buy. Consider the extent of the beach and find out about its erosion during the last decades, if you want to buy a property in the sea. Ask about jellyfish before buying a property in the sea.
Municipal taxes in Italy for 2018: Imu, Tasi, Tari
Imu, Tari and Tasi: tell me in which region you live and I will tell you how much they cost you Municipal taxes are important in Italy, although cheaper than property taxes and housing taxes in France. In particular, in Liguria. And the most important tax is Imu, with an average cost of 197 euros. However, the waste tax and the Tasi, communal tax on integrated services, are no less important. According to the data prepared by Adnkronos and contained in the tables distributed by the Ministry of Finance, during a parliamentary hearing on the fiscal capacity of local authorities for next year, in 2018, the Ligurians will pay on average 703 euros. Taxpayers who live in Calabria will pay less than half: 298 euros. In 2018, Italian taxpayers will pay an average of 489 euros of municipal taxes, but with significant differences depending on their place of residence. After the Ligurians, to pay the highest local taxes will be those who live in Lazio (596 euros) and in Tuscany (581 euros). Whereas, after Calabria, the least taxed will be the inhabitants of Basilicata (310 Euro) and Molise (354 Euros). Above the national average: Emilia Romagna (570 euros), Piedmont (500 euros), Lombardy (498 euros). Below the average: Veneto (479 euros), Umbria (464 euros), Abruzzo (451 euros), Marche (429 euros), Apulia (389 euros), Campania (377 euros). The cost of Imu Imu is the most important tax, with an average cost of 197 euros. The highest peak is in Liguria, where it reaches 362 euros, and the lowest in Basilicata, where it stops at 108 euros. Then there are Tuscany (236 euros), Emilia Romagna (234 euros), the action (232 euros), Piedmont (212 euros), Lombardy (200 euros), Veneto Abruzzo (€ 181), Marche (€ 170), Umbria (€ 168), Molise (€ 159), Apulia (€ 158), Campania (€ 131) and Calabria (€ 115). How much cost waste disposal (Tari) Waste costs an average of 122 euros. Tuscany (€ 161), Lazio (€ 154), Campania (€ 142), Emilia Romagna (€ 139), Abruzzo (€ 135), Umbria 136 euros)), Liguria (134 euros). Below the national average, Puglia (€ 119), Marche (€ 109), Piedmont (€ 105), Veneto (€ 102), Basilicata (€ 97), Calabria euros). The weight of Tasi The Tasi weighs on average 35 euros. There is Liguria (56 euros), then – above the national average – Emilia Romagna (43 euros), Tuscany (40 euros), Lombardy (39 euros), Lazio (39 euros), Piedmont (38 euros), Veneto (36 euros). You pay less than the national average in Umbria (31 euros), Abruzzo (31 euros), Marche (29 euros), Molise (28 euros), Apulia (25 euros), Campania Calabria.
Industrial production increases, boding well for real estate
Increase in industrial production in June. According to Istat, the Italian State Statistics Institute, the seasonally adjusted index rose 1.1% from May, adjusted for calendar effects. In June 2017, the index increased in trend terms by 5.3% (working days are 21, as in June 2016), at the upper end since the end of last year. On average for the quarter of April to June 2017, production increased by 1.1% compared to the previous three months. On average, for the first six months of the year, production increased by 2.2% compared to the same period last year. The positive trend continues for the Italian industry, after positive data were also recorded in May. The recovery is already influencing the real estate market Indeed, if we look at the property prices of the last 24 months, we note that the stabilization of the Italian real estate market is confirmed, as is the economic recovery. Prices remain at fairly low levels compared to the pre-crisis level of 2008, so we can do good business by buying real estate in Italy. The automotive industry is doing particularly well The acquisition of Chrysler and Jeep by Fiat is bearing its fruits Leap of production in particular in the automotive industry. Italian car production in June increased by 19.9% over the previous year, according to Istat. The average growth in the second quarter, compared to the previous period, is 4.4%. “This is the sector that drives industrial production this month,” said the Institute of Statistics.
The deep evolution of the Italian real estate market
Housing is no longer a safe haven for the younger generations The brick no longer seems to be the safe investment property, especially for the younger generation. The purchase of the house no longer seems to be a priority, due to the economic conditions that have changed for the so-called millenials, generations roughly 25 to 40 years, poorer than previous generations. That’s mainly due to a change in lifestyle or because of the economic crisis that remains. The sharing economy , environmental sustainability, job insecurity have profoundly changed the issue. Now a home must be technologically advanced, safe, designed for energy efficiency and the use of natural materials, or otherwise promoting the health of its occupants. It is necessary to start designing the houses, taking into account the location and the correct orientation, the waterproofing of the building, but also the ventilation control, with renewable energy equipment and systems. “Today, you are asking for a connected, efficient, healthy home,” says Gaetano Courage, general manager of Paspartu, a company specializing in the restructuring of homes and buildings. “Our homes look more like a car, customizable, and re-examined over the years, to maintain performance. The imperative is to point towards urban regeneration “. Economic conditions for the construction of houses more unfavorable than in France The precariousness of work, the fact that there are fewer and fewer steady jons, also means that young couples rarely want to engage in a project to build a new house. The number of children per couple has also decreased significantly compared to the last century, which increases the demand for small-scale housing. Italy’s residential market is quite different from that of France for a rather simple reason: France counts 67 million inhabitants on a territory of about 513 000 km². Italy counts 63 million on a territory of approximately 310 000 km². Except that Italy is constituted by a good half of mountains, lakes, almost desert and uninhabitable areas. It can therefore be considered that its real population density is three times greater than that of France. Buildable land is more difficult to find, and, on average, much more expensive to buy. This is what guarantees a stability of the prices of the Italian real estate market, despite any economic crisis. It is a sort of floor, below which it really takes a major economic catastrophe in order for prices to go down. At present, I think that the Italian real estate market has hit the bottom, an opinion that seems to be corroborated by prices that have stabilized over the past few months and are even starting to rise slowly. Let’s combine that with a real estate stock that by more than 62% dates before 1990, and we will understand the importance of restructuring and restoring existing houses and apartments.
Houses to be restructured in Italy, real estate investment opportunities
How the housing market changes due to redevelopment and urban restructuring In Italy, no new houses are being built, while the Italian housing stock is outdated, as it was mostly built before 1990. The demand for rental and purchase of real estate changes, as 2 million square meters of housing remain empty in Italy. But if at first sight this may seem a critical problem, on the other hand, it represents a huge opportunity. The renovation of real estate is the opportunity for the whole industry and for foreign or Italian investors Italy is a country of 20 million home owners. However, the properties are often empty, blocked by the small number of real estate transactions. In this scenario, the renovation of Italian real estate is the future of construction and industry. Already, in fact, 19 percent of sales involve renovated homes. Gaetano Courage, from Paspartu Italy explains how the market evolves and how to meet the new demands of transformation today. A connected, modern house. But also effective The beautiful home is a healthy one, and online. The revival of Italian real estate is an opportunity for the entire industry. Today already, in fact, 19 percent of sales relate to the renovation of homes. Environmental sustainability and energy savings are some of the key requirements According to the “first report on the resumption of construction in Italy”, produced by Scenari Immobiliari (real estate scenarios) in collaboration with Paspartu Italy and presented in Milan, 62.2 per cent of the properties were built before 1990 (30.1 per cent even before 1970). An outdated, energy-consuming heritage, often insufficient to answer the question that has been raised in recent years. On the other hand, there are at least 147 million square meters of empty and ready-to-sell properties, compared to the 123 million square meters of inadequate and unresolvable housing. With this framework, it is clear that the recovery and restoration of real estate assets could represent today one of the best opportunities for the whole sector: a market potential of 50 billion euros. “We have to create a new market,” explains Mario Breglia, president of Scenari Immobiliari. “And this role can be played by the restructuring of existing assets. Interventions that can render homes more comfortable, more pleasant, more beautiful. We can no longer consume land, so we have to take action on buildings, not just on individual apartments. “
Real estate foreign investments boom in Italy in 1st half 2017
Why foreign investors invest in real estate in Italy Six main reasons for investing in real estate in Italy if you are a foreigner There are plenty of creative Italian companies that are exporting a lot, at relatively competitive prices. These same companies are often bought by foreigners at reasonable prices Italy is beautiful, rich in artistic and cultural heritage, dotted with tourist springs and cities of art, having magnificent beaches. The purchasing power of the Italians, affected by the crisis more than in the rest of Europe, has brought down the price of real estate in Italy, which are now relatively cheap. There are many judicial auctions where you can get bargains Its climate is mild and temperate Its population has the reputation of being cheerful and friendly Italian real estate market boosted by foreign investment in second quarter of 2017 During the second quarter of 2017, nearly € 4 billion was invested in the Italian real estate market, representing € 5.8 billion for the first half of the year, with a 58% increase compared to the same period last year – and thus establishing the largest volume of real estate investment ever recorded in a period in Italy. Interest in the sector is therefore very strong in the first half of the year, with dynamic activity “plus” and growth in both the average value and the number of transactions compared to the first half of 2016. This is what emerges from the analysis of CBRE, the leading real estate consulting firm. 80% of investments in Italian real estate came from abroad Foreign capital accounted for 80% of total investment in the first half of the year, at around € 4.5 billion, an increase of 67% compared with the first half of 2016. The share of Italian investment continues To improve with more than 1 billion euros invested in the first six months of 2017. In terms of sectors, offices still have the largest share of investments: 2 billion in the first half of 2017 (+ 30% compared with the first half of 2016), followed by retail sales totaling 1, 2 billion (+ 76% compared with the first half of 2016). The volume of replacement investments is high at 992 million, almost twice as high as the first half-year 2016. Logistics, which began this year, continued to attract investors’ interest in To reach a total of approximately 800 million investment (+ 291% compared to the same period in 2016). Even the hotel sector, with 770 million (+ 49% in the first half of 2016), continues to attract more and more investments. As regards geographical areas, there is an improvement in the Roman market, with € 1 billion invested in the first half of 2017, an increase of 30% compared with the same period in 2016. Milan reached an investment volume of 1.8 billion euros, 25% more than in 2016; of these, 48% relates to the office sector. Milan and Rome then confirm that they are the most attractive places for investors, accounting for 50% of total investments in the first half of this year.
Notre nouvelle maison dans les Pouilles
Nous avons acheté un terrain dans les Pouilles pour y construire une maison. Nous savions comment nous y prendre en France mais en Italie les choses se sont révélées très différentes. Lorsque nous avons croisé notre premier problème, nous avons eu la chance qu’un ami nous conseille Marco Marragia. Depuis il nous aide à chaque étape. Il a toujours été très disponible et a toujours trouvé une solution à nos problèmes (relation voisinage, mairie, entreprise, assurance, urbanisme, enquêtes diverses, contrat…). Dans nos rapports difficiles avec les entreprises il a su trouvé le juste ton pour parler avec eux. Nous regrettons vraiment beaucoup de ne pas avoir démarrer avec lui dès l’achat du terrain et le choix de l’entreprise. Se faire assister d’un avocat est finalement indispensable d’autant plus que Marco est beaucoup plus qu’un avocat. Aurélia Hornecker & Emmanuel Nessi, France. a.hornecker@gmail.com We bought land in Puglia to build a house. We knew how to do it in France, but in Italy things have been very different. When we ran into our first issue, we were fortunate that a friend advises us Marragia Marco. Since then, he helps us at every step. He has always been very available, helpful and has always found a solution to our problems (neighborhood relationship, town hall, business, insurance, urban planning, various surveys, contracts, …). In our difficult relationship with the companies he has found the right tone to speak with them. We really regret not having started with him from the land purchase and the choice of the company. Have the assistance of a lawyer is ultimately essential especially since Marco is more than a lawyer. Aurélia Hornecker & Emmanuel Nessi, France. a.hornecker@gmail.com
What attracts foreign investment to Italy
Foreign investment in Italy, latest trends There are several factors that could have a positive effect on the attractiveness of Italy, but the necessary reforms must be carried out. Italy is becoming less and less attractive to foreign investors. The country loses positions in international rankings, and the AIBE index, developed by Censis (the National Research Institute) with the Association of Foreign Banks, is down to 40.3, from 47.8 in 2016. Being given that 100 is the maximum value, Italy is therefore considered to be a country where investing is not very practical: among the main causes are the tax burden, the slow times of the civil and regulatory bureaucracy and the justice. The most attractive are China and Germany, followed by the United States and India. Nevertheless, we can remain optimistic However, there are several factors that could have a positive effect on the attractiveness of Italy, from the Industry Program 4.0. Even Brexit could favor Italy, while the Trump Presidency is seen as a negative factor, as well as domestic political instability. Strengths remain for fashion and luxury investors (91.3%), food (60.9%) and mechanics (60.9%). They are followed by tourism and pharmaceuticals. Among the internal factors, of great importance is the quality of human resources. The main mode of investment is indicated in the merger and acquisition, for the prestige of its brands, the quality of products and services and the acquisition price considered relatively low. It is hardly the case to note that even real estate prices are relatively cheap, especially in some areas. Residences on the sea front can be found around 1000 € per square meter, especially in the south of the peninsula. In short, Censis concludes, Italy’s external perception is better for the country’s structural aspects such as human resources, infrastructure, the banking system and the flexibility of the labor market. While investors remain chilly in view of the aspects that involve the public administration. What slows down investment may disappear in the long run If we look at the last administrative elections in mid-June, the extremist parties lost ground. This could allow the governing parties to carry out the reforms that Italy needs. On what Italy should bet to improve their “convenience framework”, as defined by the Censis survey? For the vast majority of respondents (who are entrepreneurs, managers, banks and foreign correspondents), it is essential to continue the reforms: 72% declare it. The reform of public administration, the simplification and certainty of a more effective fiscal policy, the reform of the civil justice, continue to return to the center of the concerns of the foreign investors.
Unemployment rate falls in Italy, which is expected to stabilize house prices
The unemployment rate drops to 11.1% in April: minimum since 2012 To celebrate these are above all those who are over 50 years old: compared with the year 2016, there are 277 thousand more employees, thanks to the growth of 362,000 at work. The unemployment rate is stable among young people at 34 per cent. Net decrease in the unemployment rate in Italy: in April the figure of unemployed is down to 11.1 percent, down 0.4 percentage point in one month and 0, 6 points over the year, reaching a trough In September 2012. The annual decline is 4.8%, in the amount of -146,000. Among youth, the unemployment rate remains at 34%. Last month, the Italian labor market saw employment growth of 94,000 people. + 0.4% compared to March at 57.9% and the highest since 2009. But the statistics highlight a phenomenon that marked the resumption of work in Italy in recent times: the increase in employees – particularly for men, affects people over the age of 50, and to a lesser extent, those aged 25-34, while there is a decline in other age groups. Still on an annual basis, in April, the unemployed (-4.8%, equal to -146,000) and inactive (-1.4%, equal to -196,000) were reduced. Consequences for the real estate market If there are more workers, there are more people who can borrow to buy real estate. The real estate market can only benefit from a decrease in the unemployment rate. The chart below shows a decline in real estate prices in Milan from 2015, which had already begun to stabilize somewhat in recent months. Now let’s look at the chart showing the evolution of rent prices in Milan, again for the same period: the constant increase predicts that sales prices will soon follow the same direction of rent prices, because rents increase only when there is a corresponding increase in purchasing power. Increase that will benefit the price of real estate. Conclusion: it’s a good time to invest in real estate in Italy Indeed, given the economic recovery that seems to be consolidating, everything predicts that real estate prices have reached their bottom, and will start to rise, albeit slowly.
The obligation to keep auxiliary warehouse registers
The circumstances under which the law demands auxiliary warehouse registers According to the wording of Article 14 of Presidential Decree 600/1973 and Article 1 (1) of Presidential Decree 695/1996 taxpayers are required to keep auxiliary warehouse registers as of the second tax period following that in which, for the second consecutive time, the amount of the products and the total quantity of stocks are higher by 5,166,569 EURO and 1,032,914 EURO respectively. As a result, if an enterprise in years n and n + 1 has exceeded the above limits, the inventory accounting obligation will start from year n + 3 (second period after tax). In order to exclude the obligation to have to take over the daybook, the book of inventories and documents required for VAT their ancillary warehouse entries, you must then carry out a separate check of the two values indicated: Revenues and inventories. It becomes essential to understand, for both income and inventory, what items to include or exclude. In terms of turnover, considering that in the event of the start of the business or tax year not coinciding with the calendar year, the same should be converted into one year, should be taken into account: The proceeds from the disposition of the property and the provision of services; The proceeds from the sale of raw materials and semi-finished products; The consideration for the sale of non-mobile equipment; Fees for the sale of trading securities; The value of the goods that are consumed or destined for purposes other than those of the company; The insurance indemnity (for a discussion on remuneration see Tax Circular No. 18/2017) of commodities; The contributions due under the contract; Account / year contributions due according to the law. However, are excluded from the calculation: Capital gains; Potential assets; Account / capital contributions; The proceeds from the sale of mobile equipment; dividends; Interest income; Income from real estate. Please note that if multiple activities are exercised, the income to be taken into account are the total sum of the income from the individual activities. With regard to inventories, however, since these are the same rules for carrying out the activities referred to in the preceding paragraph, it should be noted that you should not update the accounting entries each year. For the elements included in the calculation, it is necessary to distinguish: Products whose production and exchange are commercial activities; Raw and auxiliary materials and semi-finished products; Work, supplies and services are performed at the end of the year. Credit-related securities are excluded. The obligation shall cease from the first tax period following that in which the amount of proceeds or the value of inventories for the second consecutive time is less than the limits indicated. Remember that auxiliary warehouse registers are not required for individual companies and companies that operate in simplified accounting, and business professionals. The legislature also excluded from the obligation to keep ancillary accounting of stocks: Retailers selling in places open to the public, in in-house stores or by automated equipment, mail-order, home or mobile; Persons who sell hotel services; Persons who sell food and beverages in public exercises, in company canteens or by vending machines. The obligation rests with these persons only if they use centralized warehouses which serve one or more shops and provided that at least one of them is situated in a different municipality from that where the activity is carried out. It was also pointed out that, in the case of the conduct of retail and wholesale activities carried out on the same premises, for the purpose of obligatory verification of the auxiliary entries of the warehouse, the same rules prevail as for retail trade. They are so-called freight companies or those that deal with the supply of goods and not their production. The wholesalers are obliged in any case to keep auxiliary records of the warehouse, while for retailers the considerations that precede apply.