On 27th June 2019 the Italian Parliament converted into Law the Italian Law Decree No. 34 of 2019 (Growth Decree), provisionally enacted on April 2019.

Differently from other measures, the provisions of the Growth Decree introducing tax incentives to boost securitisations of non-performing and unlikely-to-pay receivables (NPLs/UTPs) and the real estate market have been amended by the Parliament to a very limited extent, and are therefore in force, as discussed in the following sections.

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.