Italian labour market improves thanks to Jobs Act
The reform introduced by Renzi’s government has improved employment and economy, albeit slightly Interim results on the field of the reform introduced by the Renzi government – it will take time, allowing the polls, to fully assess the structural effects – tell a two-faced reality: in early 2015, when started the reduction in contributions for new hires, the rate of occupancy was 55.9 percent and that of unemployed to 12.3 percent. Today – as they said the day before yesterday to Istat – Italians who work have risen to 57.3% and those without a job fell to 11.9 percent. Around the beautiful country 417,000 employees have been added. Something moved in the right direction, one might say at first glance, thanks to the timid economic recovery. But the result of the Jobs Act is actually a cocktail of lights and shadows: in November 2016 – and it is good news – there was 409,000 permanent contracts more than in early 2015. Too bad that young people have not benefited. The generational divide The generational divide indeed, complicit rigidities of Fornero law that extended the retirement age, has expanded: in 23 months, the number of over fifty to work in Italy has increased by 690,000 units. The new posts for youngsters between 14 and 25 were however only 36,000. More than 500,000 of our fellow citizens, and even here there is to celebrate, are back on track to seek employment. And, discordant note, layoffs jumped by 32%, facilitated – critics say – the weakening of Article 18, which makes layoffs much more difficult. Here in detail how and what has changed in the labor market in Italy in the era of the Jobs Act: REBATES HAVE WORKED WELL Hiring savings of more than 8,000 euro of contributions made to run businesses have increased the the number of permanent workers in 2015, closed with activations up 56% in 2014. In December of that year, before the relief rebates where reduced to 40%, it has seen a historic passing of stable activation of certain ones. The last photo of Istat (the sadistic office of the government) portrays 14.9 million permanent employees (last November), up sharply from 14.5 million in March 2015, when the Jobs Act became effective. But behind these positive numbers lie two weaknesses. Out of a hundred permanent contracts in 2015, only 9.5% can be classified in full as new jobs. They are workers who were never registered in the INPS (the Italian Social Security) archives as autonomous or professionals, nor have ever been the subject of mandatory reports (started, stopped, extended, transformed) since 2009. The de-casualization is admittedly welcome, but then likely to fade with the loss of tax relief and a lack of sustained economic growth in recent months, the temporary hires have returned to grow at much greater rate, while with the weakening of the economic advantage of hiring the boom of stable contracts was off. OK FOR ALL THE OVER 50 The over fifty workers are the ones that come out better from the first two years of the Jobs Act. The statistic – obviously – is a bit distorted by the effect of the Law Fornero, which raised the retirement age. The numbers are nevertheless very significant: from January 2015 to November 2016 employed workers over 50 increased by 690,000 units. Like saying that every day nearly 1,000 places were added. The reform of the Renzi government labor market, in this case, has had a marginal impact, given that the trend is a photocopy of that of 2013-2014, when in two years, workers with more than 50 years had grown to 721mila units. The unemployment rate for this age group puts Italy almost at the German level of excellence. In November last year we were at 5.6%, the lowest since 2012, half a point less than in January 2015. RECRUITMENT STAGNATES FOR YOUNGSTERS The effect of the Jobs Act is almost nil for young people between 15 and 24 years. From January 2015 to November 2016 the employed in this age group grew by only 36,000 units. And in 2016, with the reduction of rebates, new posts were only 5,000. It must be said, nevertheless, that since 2004 the annual balance for those under 24 was always negative and the unemployment rate fell in two years from 40.9% to 39.4%. Even the Observatory of Labour Consultants certifies that young people (as well as women and graduates) are those that have benefited most from the increase in stable employment. In recent months, however, the youth labor market has gone back into reverse. In April, the number of employed persons in this age group had risen for the first time in 2013 to more than a million people. Since then, however, 38,000 jobs were burnt. Things are not good even for 25-34 year olds: in 2015 unemployment for them has fallen from 18.4% to 17.2%. In November, the index had already risen to 18.9%, and since the Jobs Act have been burnt over 130,000 jobs. THE OPINION OF ENTERPRISES The new protections against dismissal (based in fact on compensation) are, according to the investment bank Barclays Bank, appreciable because companies know exactly how much can cost them to part with a worker, without waiting for the discretion of a court. HSBC Bank International recalls that the OECD credits the Jobs Act of a beneficial effect on GDP of 0.6 percentage points in five years. But it also recognizes how the companies themselves attribute two-thirds of new hires to contribution savings. A spent drug, except for a few limited cases.
My house in Puglia and Basilicata
Marco managed the purchase of our land in Puglia and our house in Basilicata with great professionalism. He helped us to understand the procedures and dealt with the officials, interpreting from English to Italian as required. We will use him in the future and would not hesitate to recommend the firm to others.’ Hilary Shenton hilary@zarza-alpacas.com
His professional advice on the Italian legal system was invaluable!
Marco Magaraggia assisted us in the purchase of our house in 2007 and two years later assisted in resolving a boundary dispute with our neighbour. With the assistance of our Geometra he identified the official boundary line and visited our neighbour to resolve the dispute amicably. We later sought his advice on the subject of our Wills. He is quick to respond to requests for help and his professional advice on the Italian legal system was invaluable. The fact that he speaks English is an added bonus. Donald Goulding donaldgoulding@yahoo.co.uk
Dozza, an Italian village that’s an open sky art gallery
The walls of this town atop a hill are embellished with beautiful frescoes Click on images to enlarge : The medieval village of Dozza, one of the hundred “Most Beautiful Villages of Italy”, located south of Bologna, 6 km from Imola on the crest of a hill, overlooking the river valley and slopes gently towards the via Emilia. Why visit Dozza A Dozza, art becomes urban landscape and decorates the walls of houses, streets and squares, with a wide variety of styles, open to sudden flashes of color. It’s a real museum in the open air, where you can admire more than a hundred works of prestigious names in contemporary art. Inside the fortress, there are preserved frescoes and sketches of the work on the wall exposed to the Centre for Research and documentation of painted wall. The Biennial of Painted Wall, born in the sixties, gave Dozza a modern art gallery in the open, always available for the visit, no opening hours nor admission fees. The gallery is on the walls of houses, permanent frescoes and reliefs are created by guest artists every two years. The painted wall materially characterizes the houses facades in the historic center, and the murals are in close symbiosis with the history, the atmosphere, the smells of the old village and the gentle hills. On the walls of this village, around windows, doors, workshops will shine the colors of the paintings. Dozza has become a pictorial anthology, a true modern art gallery, outdoor, of singular interest, not only because it covers a semi-secular period, but also because the paintings are closely and intimately linked to the place for which they were designed. Where to visit and what to see at Dozza The best time to visit Dozza is definitely from May to September, to join in the occasion of the visit of the village by taking part in events such as the “Wine Festival” and the “New Biennial Painted Wall”. Its historic center still retains its original urban fabric of medieval style, and the mighty Sforza Rocca, placed at the height of the country, is in perfect harmony with the rest of the village, which follows the route of the ancient walls. In the historic center, to which painted walls give color and atmosphere, i’t’s also to visit the Church of St. Mary of the Assumption in the pool, built in the twelfth century on the remains of an ancient Roman church – it contains a table Marco Palmezzano, dated 1492 – the Rivellino, inside which was restored in the 18th century the gateway to the village. Room with a view Placed in a convent of 1200 completely renovated, Hotel Monte del Re is an ideal place to combine work and relaxation. Located on a hill overlooking the medieval town, it features an outdoor swimming pool surrounded by greenery. The old church is now used as a conference room suitable especially for conferences and seminars. Do not missat Dozza At Dozza you can not leave without visiting the Enoteca Regionale. Located in the basement of Castello Sforzesco, are exposed for selling over 800 selected wine labels. The premises also host a wine bar for tastings guided by professional sommeliers.
Italy is the 12th best loved country in the world
The 2016 country reputation ranking The countries with the highest reputation worldwide have been ranked by the Reputation Institute in its annual Country RepTrak index. A ranking to be proud of According to the Reputation Institute, Italy ranks 12th. This is great, if you are to consider that there are about 200 countries in the world and Italy ranks better than Germany (18th), France (15th), United Kingdom (13th) and Japan (14th) to name a few. The attractiveness of its touristic resorts and the quality of his exports are the two factors that most contributed to Italy’s top ranking. However, Italy’s ranking is average if you consider the European countries altogether. Indeed, among the ten top ranking countries, seven are European. They are mostly northern countries with high per capita income and standard of living. I would say that Scandinavia is a top performer, since all the countries of this peninsula rank among the top 10, with Sweden ranking first. This comes to no surprise for anybody who knows these countries. You can look at the complete rankings below, with the United States ranking rather poorly, and the 28th place. The criteria for evaluating the reputation of a country Contributor to global culture • High quality products & services • Well-educated and reliable workforce • Well-known brands • Values education • Technologically advanced.
Debt laden Italian banks render Italian real estate cheaper
The weakness of Italian banks, an opportunity for foreign investors? Italian banks have an estimated $360 billion worth of bad credit. Those are loans that will be hard to be rebate by the doors, since their financial or economic recitation doesn’t allow the stipulated payments. It is calculated that about $200 billion worth of loans will never be paid back. So, despite extremely low interest rates, the volume of real estate trading in Italy is way lower than precrisis levels, about 40% lower. Prices have stabilized at a low level. Indeed, the average is 2100 dollars per square meter. At some beautiful resorts, especially in Southern Italy and on the East Coast, in central and southern Italy, you could buy apartments at the seaside for around $1000 per square meter. Consider that Italy is a beautiful country which has drawn investors over the centuries. It is densely populated: its 310,000 km² host roughly the same population as France (around 65 million people), which has more than 500,000 km². But in Italy, the country is so full of steep hills, mountains, and semi-desertic areas, especially in the South, that human settlements can take place in roughly half of the country. This population density provides for the value of Italian real estate, which can never dramatically plummet. Since Italians care a lot for housing, the quality of Italian real estate is often outstanding, never too low. Conclusion: in my humble opinion, the Italian real estate market should have bottomed, is a good time for foreigners to take advantage, investing in one of the world’s most beautiful countries. The last real estate Observatory of Nomisma, one of Italy’s most prestigious think tanks, evidences that the interest of Italians is no longer limited to the residential sector in recent months: investment in real estate for companies has also grown. While noting a slight recovery in the housing market, in place for several years and confirmed in early 2016, Nomisma still urges caution. Certain factors – the Observatory cites the outcome of the British referendum, which sealed the release of the UK from the European Union – could undermine the stability of the macro-economic environment, with inevitable repercussions on the Italian real estate market, still far from the levels prior to the economic crisis. In fact, the increase in purchased and sold properties registered in recent years – the trades have increased as well 2014 (+ 3.6%) as in 2015 (+ 6.5%) – it was not large enough to allow a return to pre-crisis levels. Nomisma, which provides for an increase of 7.6% of trade for 2016, points out that the market trades in 13 major Italian cities were reduced by 40% in the residential sector and 50% in the non-residential. Further confirmation the modest recovery in the housing market is coming from the Observatory of casa.it, which certifies a growing interest in the residential homes. In the first half of 2016, the demand for housing has increased (+ 2.6%) – the analysis reveals that Italians are mainly seeking apartments (29%) and three-room apartments (26%) in semi-central or remote areas. But this has not been accompanied by a simultaneous increase in prices: a square meter costs on average 2,010 euro, down 0.1%.
Neighbor dispute
Twee jaar geleden moest ik op zoek naar een advocaat hier in Puglia, omwille van een burendispuut met betrekking tot roerend en onroerend goed. Via een vriend kwam ik in contact met Meester Marco van het advocatenkantoor Studio Legale Magaraggia in Lecce. Een zeer integer man die Ik graag wil bedanken voor zijn correcte hulp en bijstand, zijn immer goed onderbouwde betogen voor de rechtbank en zijn niet-aflatende inzet voor mijn zaak. M. Vanderoost Two years ago I had to look for a lawyer here in Puglia, because of a neighbor dispute concerning movable and immovable property. Through a friend I came in contact with LL.M. Marco from the law firm Studio Legale Magaraggia in Lecce. A man of integrity whom I would like to thank for his correct help and assistance, his always well-founded arguments in court and his persistent commitment to my case. M. Vanderoost magda.vanderoost@hotmail.com
The Italian real estate market recovers slightly in the 2Q of 2016
The last real estate Observatory of Nomisma, one of Italy’s most prestigious think tanks, evidences that the interest of Italians is no longer limited to the residential sector in recent months: investment in real estate for companies has also grown. While noting a slight recovery in the housing market, in place for several years and confirmed in early 2016, Nomisma still urges caution. Certain factors – the Observatory cites the outcome of the British referendum, which sealed the release of the UK from the European Union – could undermine the stability of the macro-economic environment, with inevitable repercussions on the Italian real estate market, still far from the levels prior to the economic crisis. In fact, the increase in purchased and sold properties registered in recent years – the trades have increased as well 2014 (+ 3.6%) as in 2015 (+ 6.5%) – was not large enough to allow a return to pre-crisis levels. Nomisma, which provides for an increase of 7.6% of trade for 2016, points out that the market trades in 13 major Italian cities were reduced by 40% in the residential sector and 50% in the non-residential. Further confirmation the modest recovery in the housing market is coming from the Observatory of casa.it, which certifies a growing interest in the residential homes. In the first half of 2016, the demand for housing has increased (+ 2.6%) – the analysis reveals that Italians are mainly seeking apartments (29%) and three-room apartments (26%) in semi-central or remote areas. But this has not been accompanied by a simultaneous increase in prices: a square meter costs on average 2,010 euro, down 0.1%.
Italian real estate market back on a growth path
In 2015, in Italy, the real estate housing market, after the long, steep descent observed since 2007, seems to be back on a growth path (449,000 standardized transactions), confirming and passing (6.5%), the positive figure of the previous year (421,000). This is what we read in the report of the Revenue Agency for real estate and ABI (Italian Banks Association) for the residential sector. Observatory of the housing market Affordability index rose to 11.9% in March, the historical records No coincidence that in 2015 the “affordability index” developed by ABI, which measures the ability of families to buy a house by borrowing, continues its positive trend. With a significant improvement in the second half of the year, this trend led him to establish time high. According to the monthly projections, in March 2016 the index should be further improved reaching a value of 11.9%. Trades up 6.5% to 449,000 in 2015 The report notes that the figure of 2015 still strengthens the positive trend already observed in 2014, marking a clear sign of recovery. If, in fact, the growth recorded in 2014 was influenced by the effects that the new system of registration fees, mortgage and property rights, enforced on 1 January 2014, has had on the market, – says the study – the figure for 2015 represents an outright + 6.5% growth. “ Declining interest rates among recovery drivers The causes of this housing market recovery depend, according to the report, on four factors. “In the first place, by the fact that, sooner or later, first purchasers who were staying off the market because of the crisis, must acquire a dwelling. Second, the overall economic situation begins to give positive signals, though not exciting, in particular on the various indicators that measure household confidence. ” Third, the interest rates have declined further and the bank credit has increased. The data in the report show that in 2015 purchases made with a mortgage loan increased by 19.5%, and the average interest rate (calculated on first installment) fell by 0.65 percentage points to 2.75% on average. See the market in 2016
Rental income tax – a more favorable rate applies from 2016 on
In the STABILITY LAW 2016, a new Flat-Rate Tax Scheme favors landlords The flat-rate tax scheme, first introduced into the Italian tax system by Stability Law 2015, has been modified and made more practical and favourable in the 2016 Stability Law. The government’s aims for introducing the flat-rate tax scheme are to boost employment, steer Italy’s economic recovery in a positive direction, reduce undeclared taxable income and employment irregularities. The reformed tax scheme applies to individuals operating in what are classified as, ‘the arts and independent professional activities’ sector. This includes individuals generating income from the rental of investment properties and second homes. The reformed tax scheme: Establishes a tax replacing Irpef, Irap and additional taxes of 5% for the first 5 years and of 15% from the sixth year onwards: neither VAT nor other taxes are due. Represents an opportunity to regularize compliance on any activity that has not previously been declared to the Italian Tax Authority. Foreign property owners may not realize that they need to declare this type of income, even if it is seasonal and infrequent. Owners may be subject to heavy penalties in case of an audit by the Italian tax authority. Taxable income in the flat rate – tax scheme is determined by applying profitability coefficients. These codes vary according to business activity. Accommodation, lodging, lettings and B&B activities are determined by applying a profitability coefficient of 40% of revenues. Let’s make an example: Mr. Smith owns a property in Puglia and decides to start running a (seasonal) business by renting out the property for holiday letting. Mr. Smith decides to apply for the flat rate-tax. Taxable income : Euro 16.000 (coefficient of profitability 40% of 40.000) Tax to pay: 800 (tax rate 5% of 16.000). With the ordinary tax scheme Mr. Smith would pay approximately Euro 4.300 on the same profit. And he would pay much more if eligeable costs to offset generate a higher profit. As an example, if the annual revenue are Euro 40.000 and the deductible cost are 15.000, the taxable profit will be Euro 25.000 and the taxation will be around Euro 6.500. As you can see from the example above, in the “5% tax scheme” for the purposes of calculating income tax, expenses are not included – the basis for the calculation of taxable income is exclusively based on revenue. Only social security contributions (INPS) can be deducted from revenues; it is worth a reminder here that any Italian resident taking advantage of the flat-rate scheme, must have social security cover. Social security contributions are calculated as a percentage of revenues, a reduction of up to 35% of contributions is available. Up to a profit of 14.000 euros the social security contribution is fixed at approximately Euro 1900. Looking at the example above – where the maximum profit is 16.000 – the social security/insurance contribution costs will be 1900 + 20% * 2000 = 2.700. These money will not be lost; after 5 years of contribution you will accrue a (small) pension. An Individual planning to start-up a business activity in Italy qualifies for the flat-tax scheme, provided that the individual has not (officially) carried out the same activity in the past three years and that revenues will not exceed €40.000 per annum. Foreign residents and non-residents, who generate an income from letting their property in Italy, wishing to benefit from the flat-tax scheme, must notify the Italian tax authorities through a Notice of Business Start-Up. If you need help to understand your personal situation, please contact me or seek advice from a qualified accountant registered with the ODCEC, the Italian professional accounting association of certified public accountants, auditors and advisors.