2019 Italian Growth Decree: New Tax Incentives to Boost Securitisations of NPLs/UTPs and the Real Estate Market

The Italian Law Decree No. 34 of 2019 (Growth Decree), published on the Official Gazette no. 100 on 30 April 2019, entered into force on 1 May 2019. The Growth Decree shall be converted into law by the Italian Parliament, possibly with amendments, by 29 June 2019. Absent any such conversion, the Growth Decree will cease to have effects retrospectively. The incentives introduced by the Growth Decree to boost securitisations of NPLs/UTPs and the real estate market are as follows:

  1. It allows for the establishment of a number of “Real estate owned Companies” (ReoCos) and “Leasing Companies” (LeaseCos) to support a single securitisation of NPLs/UTPs executed by a Law 130 “Special Purpose Vehicle” (130 SPV);
  2. It clarifies that ReoCos and LeaseCos established to support securitisations of NPLs/UTPs can benefit from the same favourable income tax regime available to 130 SPVs;
  3. It provides for the application of negligible transfer taxes upon purchase of real estate assets by ReoCos and LeaseCos established to support securitisations of NPLs/UTPs;
  4. It provides for the application of negligible transfer taxes upon resale of real estate properties by ReoCos and LeaseCos established to support securitisations of NPLs/UTPs under certain circumstances;
  5. It clarifies the legal framework applicable to a new type of securitisations for investments in real estate properties and registered movable assets; 
  6. It provides for the application of negligible transfer taxes upon acquisition of real estate properties by enterprises which will demolish, re-build and dispose of such properties within a ten-year period. The decree also innovates certain aspects of the regulatory framework applicable to ReoCos and LeaseCos in securitisations of NPLs/UTPs, which are not covered by this note. Read More.
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