Italian taxes sending buyers to nearby Montenegro, it is suggested
A new Italian tax on boats and yachts is leading more Italians to move their assets and is boosting interest in property in nearby Montenegro.
According to the Boka Group, a private equity real estate developer, it has seen a 175% increase in interest and enquiries from Italian buyers in two of its principle residential real estate projects over the last six months.
The group, which has recently launched the development of the first 18 hole Championship Golf Course, with Country Club, in Tivat, some three kilometres from the yachting haven of Porto Montenegro, says enquiry levels over the summer period from Italian buyers and current multinational owners of property in Italy has been staggering.
‘We have seen unprecedented interest from the Italian market over the past six month, much of it is as a direct result of changes in the taxation on boats and yachts,’ said John Kennedy, Boka Group chief executive officer and founder.
‘This single measure has seen enquiries from Italian investors for land based assets now competing with traditional market enquires from British and Russian clients. Italians are now right at the top,’ he added.
It is estimated that the new Italian tax has already seen an estimated 20,000 yachts from Italian ports cross waters to anchor in France, Spain, Malta, Croatia, Greece, and Montenegro.
Kennedy explained that these assets can be re-registered and therefore the owners can legally escape the new fiscal regime imposed by the Italian government which has no real means of realising this tax, especially on larger vessels. As a result Boka is expecting increased interest in apartments and villas which large yacht owners often require near to their home berths.
It has also noticed signs of a more general movement by non-boat owners, in particular owners of second homes in Italy, of all nationalities. ‘Many are worried they are next in line for tax targeting in any new round of fiscal initiatives. With no signs of European Union and Italian deficit problems being resolved soon, there are signs of a pre-emptive movement to swap and relocate fixed assets out of Italy. It is clear that some people are no longer prepared to wait to see what happens next,’ explained Kennedy.
‘Montenegro has been hardly affected by any of the numerous European bailouts or tight fiscal austerity measures. The country sits on the borders of the EU and there is no currency risk for Italians as the Euro is the national legal tender. At the same time the country enjoys scenery and topography similar to that of the most popular regions of Italy,’ he pointed out.
‘People are telling us that they are starting to rationalise where their assets are placed and looking at the strategic benefit in mitigating overexposure in one jurisdiction. Montenegro as an emerging and growing market with a euro base, but just outside the EU borders has suddenly become of great interest to people who already thought they had found a perfect place in the sun on the shores of the Adriatic. Some now clearly believe that they are on the wrong shore,’ he added.
The Italian Government’s new boat and yacht policy has already affected the recruitment sector in Italy with a 15% decrease in the number of employed staff in the industry which equates to some 9,000 jobs.
In the second half of last year alone a total of 157,000 yacht berths and 18% of charter visits to Italy were cancelled. The announced rise to 35% tax for yachts in transit during the month of June has directly affected the volume of visitors to the Western shores of the Adriatic, which has simultaneously increased visitor numbers to Montenegro and Croatia at the same time.
The Royal Montenegro Golf & Country Club will include several hundred resident, commercial and retail units, a Club House, two hotels and spa, and a Golf Academy. Villas prices start at €4Villas prices start at €400,000 and have views of the Adriatic and are located near to the UNESCO World Heritage ancient walled city of Kotor.