Ending value added the government, which analysts say had a marginal cost, and introducing a transfer tax of 10-11% on the value of deals, proposed tax on real estate deals. An industry source said that the real estate association has asked for a meeting with the government to have talks.

Listed real estate companies have fallen 10% or more since the tax decree was published late on Wednesday, after last Friday's mini-budget, with Beni Stabili SpA seeing the largest falls.

Pirelli & C Real Estate SpA, which is involved in a variety of real estate operations from joint venture investments to management, is continuing to analyze the impact of the proposals, company officials said. Analysts said the impact on Pirelli RE is complex because of its wide range of real estate activities.

Specialist real estate broker Kempen said in a note yesterday that Pirelli RE is 'not necessarily less negatively impacted' because of its wide activities. The tax on property deals can have a knock-on impact on its estate agency business, because of lower activity, while its asset management activities can suffer from slower growth, it said.

Industry sources said they are particularly concerned about retroactive aspects of the latest legislation, which affect aspects of the outgoing value added tax and remaining VAT credits.

By M. Sese
http://realestatepress.org