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Luxury houses, flat tax effect, foreigners attracted by Italy

30 October, Economia & Lavoro

Lighter taxation is an incentive to investments

This is a great moment for Milan. Thanks to the competition for becoming the next headquarters for European Agency for the Evaluation of Medicinal Products, the thriving after Expo and the ambition to channel professionals, companies and capitals leaving London following Brexit, the city is in great shape. Engel & Völkers, real estate company specialised in upscale houses, as well yachts and planes, “sees for the market of Milan and increase of the demand and of the number of sale and lease contracts, with a steady offer and rent prices unchanged”, reads the latest report about Milan and Rome real estate. “Milan is one of the most attractive cities in Europe from a luxury properties point of view – observes Alberto Cogliati, commercial director of Engel & Völkers -. Moreover, Milan will grow even further in 2018 thanks to the requalification project bringing new value to the city”.

Rome also has a future of growing sales and leases. Between the two cities, however, Milan is far ahead with “better quality properties of high energy class”, explains Cogliati. This aspect favours the price trend, with the highest prices in Milan of 15 thousand euro per Sq m and 9,500 euro per Sq m in Rome. However, “the purpose of the sale is not investment – observes Cogliati –  since taxation is too high. Between 2015 and 2016, the number of sales in Italy has grown by 19% but prices haven’t risen. Italy is one of the few countries in Europe together with Greece, that hasn’t registered any price increase. Who is looking for a house now for 2018 or has bought one in the last six months, has done so for luxury, for the children or for work, but not for investment”. Taxation is a strategic element. The proof is, according to Cogliati, the application of the flat tax on big foreign capitals: “This has made possible bringing back home the Italian customers that have been living abroad and to attract international customers craving the Italian lifestyle. Russians, British and French are coming – explains the manager. From 2006 to 2016, the property sales in Italy by foreigners have increased considerably, 60 thousand in total. Since 2017, these have increased thanks to the flat tax representing a good incentive for these type of clients”.

Following this interest in luxury properties in Italy, Engel & Völkers is strengthening its presence. In Lombardy, the company has retail shops in Milan, Monza, Varese, Bergamo, Brescia and on the four lakes, beloved by foreigners. In 2018 the company will open shops in Pavia, Mantua and Cremona. In Tuscany, it’s present in Florence, Siena and Versilia, and it will expand in Lucca, Livorno, Grosseto, and the island of Elba in 2018. Finally, in Emilia-Romagna, it’s present in Bologna, Modena, Ferrara, Riccione, Milano Marittima, and in 2018 it will add also Parma, Ravenna and Reggio Emilia.

Source: Economia & Lavoro

Translator: Cristina Ambrosi

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