Tax Pills

Positive trend for the residential real estate market in Italy. In 2016 sales increase by 18,9% with a transaction value of € 89 billion
For the third year in a row, the residential real estate market in Italy continues to grow.  In 2016 the number of sales and purchases rises of 18.9%, after the growth of 6.5% in 2015 and 3.5% in 2014. A constant positive trend that goes hand-in-hand with the increase of the transaction value that jumps from 76 billion euro in 2015 to 89 billion in 2016. At the same time grows the percentage of houses purchased with a mortgage loan (+ 27.3%), an increase also related to the upgrading of the affordability index, which measures families possibility to obtain a mortgage to buy an house.This is the picture emerging from the residential Real Estate Report 2017, the study presented today  in Rome and carried out by the Revenue Agency's Real Estate Market Observatory, in collaboration with Abi, the Italian Banking Association.
The Housing Market in 2016 - After a period of crisis, observed since 2007, the residential real estate market seems to have returned to a constant growth. 533,741 housing units have been sold in 2016, recording an increase of 18.9% compared to 2015, with a transaction value of 89 billion euros (+17,4%) The average surface area of ​​the houses is also slightly increasing, moving from 105.2 to 106.6 square meters.
The housing market region by region - Lombardy (+ 21.4%) has the most dynamic housing market, which represents more or less one fifth of the entire national residential real estate market, followed by Veneto (+ 23.1% ), Tuscany (+ 20.0%), Emilia-Romagna (+ 22.8%) and Piemonte (+ 22.8%). Good results have also been achieved in Liguria (+ 23.8%), Sardinia (+ 18.2%), Friuli-Venezia Giulia (+ 18.8%) and Valle d'Aosta (+ 24.6%), although with a lower weight on the national market volume. Lazio, the capital region, has registered an increase of +13.2%, but with more than 55,000 houses sold in 2016, accounts for about 10% of total transactions in Italy. Molise (+ 7.8%) and Calabria (+ 10.8%) are the regions where the residential market grows less in 2016.
Strong increase in mortgage lending – In 2016 mortgages have been 246,182, 27.3% more than in 2015, when they were 193,350. The North West is the area with the largest share of purchases through mortgage, the 36.7% of the nationwide total. As regards the amount granted for the purchase of a home, the national average share is around 120,000 euros. Mortgage interest rates continued to decline and in 2016 still fall by 0.44 percentage points, reaching a 2.31%. Average rates are higher in the southern regions (2.56%) and in the center (2.46%), while the lowest are in the northern regions (2.18%). The average life of the mortgage is essentially stable at 22.5 years, distributed more or less homogeneously across the Country and the monthly mortgage repayment, on average, decreases from 592 euros observed in 2015, to 570 euros in 2016.
Stable situation for the rental market - In 2016, the number of new residential real estate lease contracts was 1,690,520, 1.3% more than in 2015, for a total of more than 1.7 million rented  properties. The number of properties that are under a lease contract in 2016 amounts to about 5.6% of the potentially available stock (the primary residences are excluded). The average surface area is 92 square meters, with an annual average rent of 60.7 € / m2, +0.3%.

Italy’s R&D tax credit extended and increased sounds more appealing. The Revenue Agency illustrates the new fiscal changes adopted through 2017 Budget law
Among the major changes following Italy’s 2017 Budget law publication in the official Gazette on 22 December 2016, the R&D tax credit is extended through 31 December 2020 and is increased to 50%, previously it was 25% or 50% depending on the type of cost, of the annual R&D incremental expenditure (of any type) exceeding the average spending of fiscal years 2012, 2013 and 2014. The annual cap has also been escalated to 20 million euros per year from the previous 5 million euros.
Larger bounds for the R&D tax credit - As from 1 January 2017, the benefit also may apply to resident companies, Italian permanent establishments of nonresident companies included, that carry out R&D activities through contracts with entities that are resident for tax purposes in Eu/European Economic Area (Eea) countries or in other countries and territories that allow an adequate exchange of information with Italy.
Taxes on research and development, new clarifications in details - With circular n.13/E, drawn up in agreement with the Ministry of Economic Development, the Agency provides accurate instructions to companies that intend to take advantage of the renewed incentive, specifically in the light of the changes introduced, in order to strengthen the fiscal appeal of this instrument and make it simpler to manage and more attractive. Among the changes that apply as from 1 January 2017, one more year is granted to make ad hoc investments in research and development sectors, whereas the maximum annual amount of the tax credit each beneficiary can cumulate increases from 5 to 20 million euro. At the same time, the rate increases to 50% and becomes unique for all types of eligible expenses. And again: resident companies that carry out research and development on behalf of non-resident contracting firms are also eligible for the R&D and the same is for the costs of all the staff employed in R&D, regardless personnel diplomas and professional qualifications.
One more year for de-taxed investments – It has also been extended over one year the time period within which interested companies may make qualified investments. Particularly, as a result of the changes made by the 2017 Budget law, taxpayers whose tax year coincides with the solar year can take advantage of the fiscal relief, other than for the investments made during the 2015-2019 tax period, even for those made during the tax year 2020. Similarly, subjects with a tax period not coinciding with the solar year may qualify for the tax credit for investments made from the tax period 2015-2016, until 2020-2021.
Multiplied the maximum initial limit for the R&D tax credit - The annual maximum amount of tax credit recognized to each beneficiary grows from 5 to 20 million euros, provided that the costs incurred for research and development must be at least € 30,000 in the tax period during which the credit is claimed. For the first two eligible periods, the tax credit is within the limits of the maximum annual amount of 5 million euros, while for the remaining four eligible periods the benefit falls within the limits of the new maximum ceiling. With regard to the time of claiming the tax credit, it can only be used in compensation starting from the tax period following the one in which the costs for R&D activities were incurred.
The tax credit for research and development activities can be also eligible for activities carried out for foreign contractors – As redesigned bi the 2017 Budget law, the R&D tax credit can be applied also on activities carried out by companies operating in Italy on the basis of contracts with foreign firms. As a result of this change, the resident enterprise who "carries out research and development activities" on behalf of non-resident clients is thus equated, for eligible fiscal purposes, to resident operators who "invest" in research and development.

FiscoOggi è una pubblicazione dell'Agenzia delle Entrate - Ufficio Comunicazione
Testata registrata al Tribunale di Roma il 19.9.2001 con n. 405/2001
Direttore responsabile Claudio Borgnino