Investing in Italian Real Estate Assets through Regulated Investment Vehicles – An Overview of Income Tax Implications for Foreign Investors

This is the second article in this two-part series comparing the legal, regulatory and income tax regimes applicable to real estate investment funds, SICAFs and securitization companies, highlighting the key similarities and differences between them and assessing their respective advantages and limitations in the context of inbound investment into Italian real estate. This second article focuses on the income tax regimes applicable to these vehicles. As discussed in the first article, REIFs and R-SICAFs are regulated investment undertakings governed by a dedicated legal and regulatory framework, whereas 7.2 SPVs are securitization vehicles subject to a fundamentally different set of legal and regulatory rules. Notwithstanding these differences, all three structures may be used for indirect investment in Italian real estate. This article examines the extent to which these structural differences are reflected in their respective income tax regimes and whether, in practice, the applicable tax rules ultimately lead to comparable outcomes.