With its beautiful beaches, crystalline seas, culture, food, climate and people, Sardinia is one of Italy’s most popular regions to invest in, for Italians and non-Italians alike.
One reason why Sardinia is such an attractive region is the diversity of properties and locations available – beach-front villas, apartments in historical towns such as Alghero, inland country retreats, “agriturismo” business ventures or holiday homes.
You might also decide that you wish to move to Sardinia and take advantage of the incentives that the Italian government has introduced to attract foreign individuals to take up residence in this region. If you are looking to retire, Sardinia offers a “Flat Tax” of 7% on your foreign income, with the proviso that you move to a town with less than 20,000 residents.
If you are not yet retired and are lucky enough to be able to work from Sardinia, as a High Net Worth Individual taking up Italian residence for the first time in at least the past nine years, you could choose to pay a £100,000 tax lump sum on all foreign income for each fiscal year.
Further incentives have been introduced to attract new residents to the region. In the town of Ollolai, for example, a property can be bought for €1. These properties are dilapidated and need major renovation works, but provided the buyer is willing to take on the burden, expense (and risk!) involved, the purchase price is nominal.
If you purchase or renovate a property in a town with less than 3,000 inhabitants and move your residence to this property, you will receive a contribution from the government towards these renovation works, up to a maximum of 50% of the costs (and up to a value of €15,000).
It is, of course, highly recommended when purchasing a property that a surveyor is instructed well before an offer is made. This applies especially in these cases – where the property being purchased is dilapidated or needs substantial renovation works, a professional technical report must be made to establish the risks involved. Bearing that in mind, despite the attractive price and government incentives, the liabilities being adopted may not quite be as attractive.
At the other end of the spectrum are luxury properties in Sardinia, of which there are plenty – Porto Rotondo being just one of the areas which attracts many wealthy individuals. As well as the usual checks and processes involved when purchasing a property in Italy, there are some additional considerations to take into account when buying a luxury property here.
The Italian Courts and legislators have provided their definition of what characteristics a property must have for it to be considered “luxury”. However, in order to be certain as to whether a property is considered as such for fiscal reasons, one must look at what code has been assigned to it in the Land Registry (for example – A/8 for a Villa). These properties are specifically excluded from certain tax benefits, so the first action necessary will be obtain the Land Registry entries of the property to establish whether it is considered a luxury property and therefore whether there are any additional costs to consider during your purchase.
Usually, if you are purchasing a property in Italy as your main home (and officially registering yourself with the authorities as such), the taxes that you will pay on the purchase will be significantly reduced. You would also not be liable for “IMU” property taxes, which are due every year on an individual’s “second” home. These exemptions are not applicable to luxury properties, even if it becomes the individual’s main residence; the entire taxes (usually a total of 9% of the tax value of the property) will be due, and IMU property taxes will also have to be paid each year.
If the property is considered to have “significant” historical, cultural, artistic, or architectural importance, then the Italian State might a pre-emptive right to purchase the property. This is a very complicated area of law which is not clear cut at all, so it is important to obtain specific legal advice to check whether these pre-emption rights exist.
Purchasing a luxury property involves additional costs and taxes, and potentially incurs higher risks with any extensive renovation works required. Therefore, it is more advisable than ever to ask a surveyor to check for any structural issues, as well as reporting on the usual checks as to whether any works and additions (such a swimming pool) relating to the property benefitted from the appropriate planning permissions, and whether the property plans registered at the Land Registry are up to date.
