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04 January 2016
The stability law, or “legge di stabilità” as it is called in Italy, is meant to promote the country’s stability and contribute to its economic growth. Every year it is newly defined and adjusted to the current market conditions. In December, the Stability Law for 2016 was finally adopted. Following is a brief overview of the most important changes concerning property owners.
Most of the following items mainly concern those of you who have their first homes in Italy. The first item, however, is also of interest and importance to owners of holiday homes.
There is some good news: the annual broadcasting fees of 113,50 euros have been reduced to 100 euros. The novelty here is the automatic billing in 10 consecutive instalment rates via the electricity bill of each property. In other words, as of now every owner of a property, which is connected to the power grid, is asked to pay the broadcasting fees by the Rai (Radiotelevisione italiana S.p.A.) via the electricity bill. Moreover, that happens independently of whether the property has a TV, radio or is connected to the internet.
The reason for these rather drastic measures is the high number of missing contributions. In Italy, we are looking at a figure of over 30 %, which corresponds to an annual amount of 600 million euros. With the help of this automatic billing system via the electricity bill, the idea is to put a stop to this evasion of contribution. Prime Minister Renzi is considering further reductions of the contribution rate for 2017, should this new measure result in better payment behaviour.
In case one refuses to pay ones contributions, the tax office intervenes immediately and the offender has to pay a fine of some 30 euros. Should the payments fail to materialize despite the warning issued by the tax office, the property will be inspected by the broadcasting company or the tax office. Should it become apparent in the course of these control visits that the contributor has given a false statement, he/she not only has to pay a fine of 500 euros but also has to face criminal proceedings. In case a property really has no connection whatsoever to the broadcasting network, the owner of the property has to provide evidence to effectuate the exemption of the payment.
The maximum limit for cash payments, which in recent years was under one thousand euros, was increased. As of now, it is possible to effect cash payments up to a maximum amount of 2999,99 euros. Exempt from these regulations are Money Transfer payments. For this type of payment the maximum limit continues to be 999,99 euros.
Particularly in relation to the tax burden on properties the Stability Law offers numerous changes:
When buying a property directly from the building contractor, 50 % of VAT paid can be written off of the Italian income tax. But the property must be bought during the year 2016 and fall into the energy class A or B.
From now on the local service charge TASI – just as the local tax IMU – will no longer be calculated on properties used as first homes. Exempt from these regulations are luxury properties.
With immediate effect agricultural land is also exempt from IMU payment.
The tax rate for second homes is divided in half, if these second homes are entrusted to children, parents or divorced partners, who use them without paying for them.
Second homes which are let on the basis of a regulated renting contract, profit from a tax reduction of 25 % on property tax.
Building contractors do only have to pay property tax of 1 ‰ on unsold property units.
State subsidies for the construction sector have been extended for another year and can be claimed even in 2016. Consequently 50 % of costs incurred for renovation works are still tax deductible. Up to 65 % of all costs incurred for renovation works which lead to the reduction of energy consumption can be deducted. Even the Bonus Mobili, which comprises state subsidies for the furnishing of renovated homes, has been extended until December 31, 2016. Up to 50 % of the costs for furnishings up to 10.000 euros are tax deductible.
The law even contains fundamental changes which almost revolutionize the tenancy law:
Since January 01, 2016 renting contracts have to be registered within 30 days after they were signed. Up to now the tenant or estate agent had to have the contract registered, as of now this is the task of the landlord. The landlord has another 60 days to communicate with the tenant or estate agent that the contract is registered.
The costs of the registration of the contract are divided in equal parts by both parties. There exists even the possibility that the landlord bears the total of the registration costs. On the other hand, it is not possible that the tenant has to bear the whole costs.
It is possible to pay the registration tax once a year or to make an advance payment for the total duration of the contract. In case the tax is not paid in time this delay results in a fine at the rate of 120 – 240 % of the sum in question plus interest payable on arrears.
In order to counteract the evasion of rental income it was decided that any kind of agreement regarding higher rental payments than the sum stipulated in the rental contract is not valid. From now on tenants have the possibility to reclaim rent paid in excess within 6 months after the return of the rented object.
Since 2016 radar units may not only be used for speed controls but also for vehicle checks to verify valid insurance documents and regular MOT tests. This regulation primarily applies to vehicles with Italian registration number plates.