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By Gareth Horsfall
This article is published on: 21st April 2026
I admit it. I have been confused for years about the rendita catastale. I have never been entirely sure about its role in the Italian economy or how it benefits the individual or the system as a whole. Until now. A recent deep dive into some economic analysis finally made the penny drop.
IMU – (Imposta Municipale Propria) – The tax on second + properties and houses, which are considered luxury properties (Class A/1, A/8, A/9)
Imposta di registro, Ipotecaria e Catastale – the taxes when buying and selling property (not market value!)
Imposta di successione e donazione – the value of property is calculated using the rendita catastale for the purposes of inheritance tax. https://spectrum-ifa.com/how-can-i-save-on-inheritance-tax-in-italy
The rendita catastale represents the amount of “theoretical rent” that a householder pays to him or herself as a measure of economic consumption. It is an imputed figure — a notional income — that reflects the benefit you receive simply by living in a property you own. In other words, if a householder owns their home outright, with no mortgage or debt, then that person is considered both a consumer and an investor of the invisible rent money they would have received had they been renting out a similar property. This money is assumed to be spent, reinvested, or otherwise circulated back into the economy.
Economists consider this a growing financial benefit that property owners enjoy from not having to pay rent. It is a silent contribution to economic activity, even though no cash actually changes hands. And in a country like Italy, where home ownership is culturally and economically significant, this imputed value plays a surprisingly large role.
During the financial crisis 2008/9, the Italian economy shrank dramatically. GDP fell, unemployment rose, and many sectors contracted sharply. Yet property, proportionately, made up more of the gross domestic product. The weighting of property in Italian GDP increased despite falling house prices and fewer transactions. That gives you an idea of how severe the declines were in other parts of the economy. Even when the market was weak, the imputed value of housing — the rendita catastale — continued to represent a stable and substantial component of national wealth.
This helps explain why successive governments treat property taxation so delicately. When the financial benefit from housing takes up a larger proportion of a property owner’s economic position, it becomes politically sensitive. It is no coincidence that governments have repeatedly adjusted or abolished taxes on the prima casa, recognising that Italian homeowners’ spending habits are more important to the domestic economy than the behaviour of foreign buyers. Italy’s economic engine is fuelled by its own residents, and the majority of them live in homes they own.
The Italian economy relies heavily on home ownership. Simply by residing in debt‑free housing, paying no rent, living in family homes, or paying below‑market rents, Italians contribute a significant share to national GDP through this imputed rental value. In a country where more than seventy percent of the population live in owned residences, this contribution is not only substantial but essential. It has grown over time, rising as a share of GDP, and continues to act as a stabilising force even when other sectors fluctuate.
Understanding the rendita catastale also helps explain why property taxation in Italy often feels disconnected from market reality. The cadastral values used for tax purposes are based on an old system that does not reflect current market prices. Yet these values continue to underpin calculations for IMU, taxes on buying and selling properties, inheritance tax, and other assessments. The system persists because it provides predictable revenue for the state and a predictable burden for homeowners, even if it bears little resemblance to actual property values.
There have been discussions for years about reforming the cadastral system, modernising valuations, and aligning them more closely with market prices. But such reforms would have enormous political and economic consequences. Updating cadastral values would instantly increase the taxable base for millions of households, and no government has been willing to take that risk. So the rendita catastale remains, outdated but deeply embedded, shaping everything from tax bills to inheritance planning.
What becomes clear is that the rendita catastale is not just a quirky Italian administrative concept. It is a structural pillar of the economy, a silent indicator of wealth, and a key reason why property taxation is handled with such caution. It reflects the reality that Italians’ relationship with property is not merely financial but cultural, generational, and deeply tied to economic stability.
And now that you finally understand it, you can see why it matters — not just to economists, but to anyone living, buying, inheriting, or planning their financial future in Italy, including us.
By Gareth Horsfall
This article is published on: 21st April 2026
You may not be aware, but from an inheritance tax point of view, Italy is actually considered more like a fiscal paradise. After you have picked yourself up off the floor because I just called Italy a “fiscal paradise”, you might want to read on. If your estate, or part of it, is likely to be subject to Italian inheritance tax on your death, then the current rules may interest you.
Italian inheritance tax law dates back to the Napoleonic period.
It requires parents, on death, to leave a major proportion of their wealth to their children instead of just their spouse. This system of forced heirship still exists today and continues to shape how estates are distributed in Italy.
If the estate is passed to your spouse or relatives in a direct line, such as children, they are required to pay 4% on the value of the inheritance that exceeds one million euro per beneficiary. Brothers and sisters must pay 6% with an allowance of one hundred thousand euro each. Other relatives must pay 6% or 8% depending on the degree of relationship, but without any allowance. Non‑relatives pay 8% with no allowance.
However, there is a term called ‘eredi legittimi’ meaning that only certain relatives have an absolute right to the share of your estate on your death. These are your children and, spouse. If you don’t leave any children then your parents and brothers and sisters have a legal right to a share in your estate and only in the event that there are none of the above, would your other relatives up to the 6th degree have a legal right to a percentage of your estate.
For foreigners (non- Italians) living in Italy at the time of death they have a right to nominate the law of their home country as a way to distribute the assets from your estate on death, instead of being forced to adopt the Italian forced succession rules. (If you are from the UK, this could create significant IHT planning opportunities). It mean you are taxable in your home country (depending on the IHT rules there) but simply means you may be able to distribute your assets according to a last will and testament, if that is your choice. One exception does apply, where you have spouse of children who are resident in Italy at the time of your death, and in this https://spectrum-ifa.com/rendita-catastale-in-italy/ case, they may be legally entitled to their fair share of your estate regardless of your will. If you are in any doubt it is always best to consult a legal professional to discuss the options.
Despite Italy having a large number of people who are subject to inheritance tax each year, the tax collection is relatively small. This is due to the high allowances and also the fact that succession for a property is based on the valore catastale, not the market value. The cadastral value is often significantly lower than the real value, which reduces the taxable amount.
There has been periodic political discussion about increasing inheritance tax in Italy, but as of 2026 no changes have been implemented. The current system remains one of the most generous in Europe, especially for spouses and children. However, this does not mean that planning is unnecessary. On the contrary, understanding how your assets are treated under Italian succession law can make a significant difference to what your heirs ultimately receive. The new UK Statutory Resident rules https://spectrum-ifa.com/new-uk-inheritance-tax-rules/ for inheritance tax mean that many more UK nationals living in Italy may be able to avoid UK and Italian IHT altogether with some clever planning.
As part of any inheritance tax or succession planning that you may undertake, you may want to look at ways in which you can hold assets in a more tax‑efficient manner. The polizza assicurativa — or life assurance bond — meets exactly that criteria. Any money that you hold in one of these tax‑efficient accounts is completely free from Italian inheritance tax and is kept outside of the estate when the value is calculated. This can be particularly useful for those who wish to leave assets to beneficiaries who are not in the direct line, or who wish to avoid the constraints of forced heirship within the limits permitted by law. It is also outside the Italian equivalent of probate (successione) and so will not get potentially tied up for any length of time in administration or legal affairs, potentially saving thousands in legal fees as well.
The not‑so‑good news is that if the majority of your estate is in your property, this cannot be placed inside the tax‑protective structure. However, any other invested or investable assets can be, generally from around €250,000 upwards. One of the great advantages is that there is no upper limit to contributions. You can protect a large part of your estate from Italian inheritance tax easily and with maximum flexibility to access the capital and any income from it during your lifetime.
By Gareth Horsfall
This article is published on: 21st April 2026
If you are buying a house in Italy and are intending on benefitting from the system of detractions and deductions for the costs of building and renovating your property, then here are 5 things which we learned in our home restoration.
By Gareth Horsfall
This article is published on: 8th April 2026
Living in a foreign country is never easy, but have you thought how complicated it would be for your family if you die suddenly?
(Apologies for the subject matter around Easter, but if you are anything like me, I like to try and organise my annual tax paperwork for the commercialista around this time and so it is also a good moment to think about putting parts of your financial paperwork in order)
This article is one which I prepared years ago and have been sending out infrequently because on my travels and in the conversations I have, it is ever apparent that most people do not have all their financial paperwork in order in case anything happens to them.
Ensuring that your papers are in order in the event of your sudden death is incredibly important when living in another country. It will provide you with peace of mind that your loved ones will not have too much difficulty in administering your estate, and your family will be thankful that you did it for them.
The big problem is that we often have documents spread across multiple locations: the office, a house in another country, with family members and in that old box that no-one dares look in.
The purpose of this article is to outline a proven way of organizing your affairs to reduce stress on the family in the event of your death.
It is a single file (digital or physical) where you keep all of your important personal and financial information together. It allows easy access to these documents in the event that you are no longer around to deal with these things. It is really important to have it in place where one family member takes the lead on the family finances (as I do in our household). That includes paying bills, managing accounts and storing documents.
Well, I think it is worth the effort. I did mine a while ago and it gives me peace of mind more than anything else. I also told a few people about its location and left a note of who my wife should contact in the event of my death.. A time of loss can be stressful enough without having to try and piece the financial affairs together.
Preparing ‘THE’ folder is much more than avoiding stress as well. If you leave behind an administrative nightmare you could also delay access to the inheritors’ funds and potentially cost a small fortune in legal fees.
To give you an example of this, the UK Department of Work and Pensions estimate that there is currently more than £400 million sitting in unclaimed pension pots in the UK.
Approximately 1 in 7 Americans are estimated to have unclaimed property, such as forgotten bank accounts, insurance proceeds, or unclaimed inheritances
This comes down to personal preference. It can be done by either creating an electronic file that survivors can access in the event of death. This file can then be stored on your main computer, in the cloud or on an external hard drive. Alternatively you can use a physical folder to keep all of the important information together.
For what it’s worth, I decided to do both when building mine because my wife prefers paper and so is happier with hard copies of everything. I prefer digital. I have also shared the digital folder with some trusted family members.
Birth, marriage and divorce
You can download free copies of your Italian documents, and copies with the ‘bollo’ (for €16) from the Italian national register website, here: https://www.anagrafenazionale.interno.it/ You will need to access it with your SPID or CIE.
Gifts which have been made many years ago can be hard to track down and so it’s important that when you make a gift to a family member or anyone else, that you keep a copy of the bank statement showing the amount paid, on what date and to whom.
If you made a larger gift, in Italy, then it will likely have been made through a notaio and so paperwork should be available. Keep these documents safe.
(so they can be maintained if necessary or cancelled if not. Essentially list the fixed costs which would need to continue after death)
Firstly, it is sensible to note the date that it was last reviewed so that anyone using it has an idea of how up-to-date the details are.
Going forward, reviewing the file on an annual basis should be sufficient.
I think it’s safe to say that this is the most problematic part of the whole process because we have so many passwords nowadays and need to change them all the time.
f you are not comfortable keeping these in your hard copy folder, consider using a password management program. A password manager allows you to save all account usernames and passwords in one place. They are then protected using one master key. There are a number of them available. Don’t forget to leave note of how to access the password manager though!
This may, however, be a step too far for you given the data breaches that seem to happen often and I appreciate that and if you are not comfortable in using such an app then its important to have a physical record some where that can be accessed in the event of your death.
This may seem like common sense but our lives now revolve around our phones and so ensuring that you leave details of not just your password to access the phone / PIN or line drawing shape, but also the PIN or access codes when the phone has been switched off AND your PUK code in the event that they get blocked out. If you use fingerprint authentication then you may also want to ensure that you leave open another access possibility, such as the PIN so that the phone can be opened without the need for your fingerprint, when that is no longer possible.
As per the above, do the same for your computer.
It’s probably worth a note about your SPID (Sistema Pubblico di identità digitale) and / or your CIE ( carta d’identità abilitata). These are digital identities accessed via apps and are now arguably some of the most important phone apps to access important financial and legal information held by the Italian state and therefore ensuring that you leave details of your passwords to access the apps could help your beneficiaries resolve estate issues without needing to engage or financial professionals to communicate with the various agencies on your behalf and at great cost.
Lastly, be sure to tell someone about it. There is little point going to the effort of creating such a folder if no one knows of its existence / where to find it.
By Gareth Horsfall
This article is published on: 4th March 2026
I wanted to communicate some information regarding what is going on in the Middle East with some information from Evelyn Partners ( one of our asset management partners) in an email newsletter to all advisers, which provides perspective regarding investments. If you have any questions or thoughts, do not hesitate to get in touch and fingers crossed this situation does not last long!
Escalating tensions in the Middle East have brought renewed market volatility and lifted oil prices, but diversified portfolios offer resilience in periods of uncertainty
Over the weekend, tensions between the US, Israel and Iran escalated materially. Israeli strikes have reportedly targeted Iranian nuclear facilities, while the US has signaled a broader objective that may extend beyond deterrence towards regime change. Iran has responded with attacks affecting parts of the Gulf region, including strikes impacting areas in the UAE, Qatar, Bahrain and Kuwait, as well as Israel.
This marks a significant shift from prior contained flare-ups. Financial markets are responding to the risk of further escalation.
Three key price moves frame the immediate response:
Iran is a major exporter, and critically, more than 80% of Iranian oil exports go to China. Iran is also strategically important to China’s Belt and Road initiative, is a member of BRICS, and plays a role in facilitating trade outside Western sanction frameworks.
In that context, this is not just a regional issue; it intersects with broader US – China strategic dynamics. Should the US gain greater leverage over oil flows coming out of both Iran and Venezuela, it would provide Washington with a significant bargaining chip ahead of the upcoming summit between Presidents Trump and Xi of China.
Paradoxically, such leverage could also deter China from blockading or invading Taiwan, a far larger systemic risk to global markets given Taiwan’s dominance in producing advanced semiconductors.
The primary “tail risk” remains disruption to the Strait of Hormuz, through which roughly a fifth of global oil supply passes. At present, while there are signs of disruption – including higher shipping insurance costs and some tanker hesitancy – the Strait remains open and traffic continues. A full closure or mining of the waterway would represent a far more severe shock to energy markets and global growth.
There is also the risk of broader attacks on regional energy infrastructure or US-linked assets across the Gulf, as most of the key oil infrastructure sits within short-range missile range of Iran. However, at this stage, markets are pricing heightened uncertainty rather than a sustained supply shock.
It is also worth noting that global oil inventories have been rising, which provides a partial buffer against near-term supply disruption. That does not eliminate risk, but it may dampen the impact unless escalation becomes materially worse.
Equities have softened modestly, but earnings growth remains the dominant driver of equity markets. Corporate Earnings Per Share momentum has so far offset geopolitical and tariff concerns this year, and we are not seeing signs of systemic stress or disorderly market functioning.
Periods like this are uncomfortable, but they are not unfamiliar. We have seen similar episodes – most recently during prior Israel–Iran tensions and in the 2022 energy shock.
History shows that while oil and gold often react sharply, diversified portfolios tend to prove resilient.
Across asset classes, we are seeing natural offsets:
Within equities, exposure to energy producers can help offset broader market weakness linked to rising oil prices. In fixed income, inflation-linked bonds could benefit from rising inflation expectations. Alternatives such as gold continue to demonstrate their value during energy shocks, as seen in previous episodes including 2022.
Investment strategies are designed with periods like this in mind. They are constructed to withstand geopolitical shocks, inflation pressures and bouts of market volatility, while remaining fully liquid and aligned with clients’ long-term objectives and risk profiles.
We expect markets to remain volatile in the days ahead. News flow may be intense and, at times, sensational. It is important to distinguish between media tone and market fundamentals.
At this stage, this is not a systemic market event. We are not seeing disorderly trading conditions or liquidity stress.Remain vigilant and ready to adjust portfolio positioning should fundamentals materially change.
For now, the appropriate stance is calm, disciplined and long term. Periods of geopolitical tension are unsettling, but diversified portfolios are designed to navigate precisely these environments. We will continue to monitor developments closely and keep clients informed with measured, evidence-based updates as the week progresses.
I know these are not easy time and so if you have any questions, or would just like to send me some comments then feel free to do so. I am always interested to hear your thoughts on these matters.
By Gareth Horsfall
This article is published on: 20th February 2026
In this Ezine I will summarise the discussions and news from our annual event which took place in Monaco this year.
As you may know my newsletters are not AI generated and for this reason they take me a little time to summarise the information, and also find the time to do so. I hope that you appreciate the fact that you are not being sent existing information which has been trawled out of the internet-o-sphere, but rather real, new and original content. (AI was a big story on the conference actually, so I will be touching on this a bit further down.
One interesting thing that occurred before I went on the conference, in fact just a few days before, was that a handful of people contacted me to say that they wanted to sell out of US based assets because they didn’t like the activities of Donald Trump and the current US administration. My advice at this time was:
It is always good to be reminded that the US stock market is valued (USD 67-69 trillion) at more than the rest of the worlds stockmarkets cumulatively (USD 55 to 60 trillion). So no matter what we think about the politics in the US at the moment, to exclude ourselves from the US stockmarket would be akin to investment suicide. We can make investment choices based on sustainable and ethical choices (and we offer these services as well for our clients) but some of the best research, technological innovation and new creative thinking comes from the US and so it still retains it’s spot as one of the best, if not THE best places for an investor.
To further explain the importance of the US market, it was explained at the conference, that should just 1% of the total value of the US stockmarket be moved at any one time, it would hardly move the markets in the US at all. That same amount would be the equivalent of the entire German stockmarket (which includes all the big names we know such as Volkswagen, Basf, Siemens, SAP, Mercedes Benz and many more) and would have a tremendous impact on the German stockmarket and in Europe, just to give context on how important the US is for our portfolios.
Saying all this, I appreciate that the Trump administration may still be a little too much to bare for some people, and so here is my summary of what is going on there:
If the U.S. economy is about 30% of global GDP, then should its currency, being that it is the reserve one, account for 35%-40% of global reserves and not 50% or 60%?
It is now pretty evident that the Trump administration is aiming to push the US Dollar lower against other currencies…but why?
The old globalisation game where the US outsourced everything and let China build the factories is effectively over. The idea that cheap imports were free trade and you don’t pay the price for destroying your industrial base is something which needs to be re-addressed as many economists on both the left and right side of politics, agree. To some extent Beijing also started weaponizing supply chains, particularly in rare earths such as lithium, cobalt and graphite, because they have an almost 90% control over these rare earths, both in mining and refining. The Trump administration is aiming to protect US interests and rebuild American industry from the ground up.
Tariffs are back—and they’re not going anywhere. They have largely turned out to be a negotiating stick and strategically aimed at specific goods rather than blanket punishment, to protect US domestic producers and force companies to bring manufacturing back to the US. As DT has said: “if you want access to the world’s largest consumer market, build in the US” Produce there and employ Americans.
Not a collapse, but more than likely a deliberate, controlled depreciation to make U.S. exports competitive again and make imports more expensive. (2026 may see a further USD decline when the new Fed Chairman Kevin Walsh is put in place, and then it could stabilize)
Cheap foreign goods have flooded the US market (and Europe) for decades because the dollar was probably too strong. A weaker dollar rewards domestic production, boosts manufacturing margins, and will hopefully brings jobs back to places that have been forgotten for years! (If this strategy works then you can be assured that Europe wil adopt the same approach, no matter how much they hate to admit it!)
This could be one of the most significant decisions made by any US administration for decades. Project Vault is a $12 billion strategic plan to stockpile critical minerals, the equivalent of a Petro Reserve for the AI and defense age. The US is building a preferential trading bloc with price floors, adjustable tariffs, and enforceable rules to crush China’s predatory pricing and market flooding.
The winners will be the ones who control the physical economy—the mines, refineries, smelters and processing plants. Critical minerals and rare earth security.
Without them, nothing modern works. Jet engines. Hypersonic missiles. Wind turbines. Electric motors. Drones. Smartphones. AI data centers. Defense systems. EVs. Nothing.
And here are some examples:
Niobium—an irreplaceable steel strengthener. Adds toughness, corrosion resistance, and high-temperature performance to superalloys
(Brazil controls ~90% of global supply. The U.S. imports 100%. Zero domestic production. One mine in Canada which given the fractious nature of current US / Canada relations, the US considers this a national security nightmare)
Neodymium (Nd) and Praseodymium (Pr)—the magnetic rare earths that power permanent magnets, the strongest magnets ever made.
(Essential for EV traction motors, wind turbine generators, missile guidance, radar, precision-guided munitions, and high-performance robotics)
CHINA CONTROLS CIRCA 90% OF REFINING AND 93% OF MAGNET PRODUCTION AND 60% OF THE REFINED SILVER MARKET.
IF RELATIONS SOUR FURTHER, THEN BEIJING WITH JUST ONE PHONE CALL, COULD PARALYZE WESTERN DEFENSE AND CLEAN ENERGY SUPPLY CHAINS
And so, in a nutshell, that is what the Trump administration would appear to be doing geopolitically. (I won’t mention any US domestic issues that are….well….. questionable).
My hunch is that you will see Europe follow suit. Europe appears to have woken up (c/o D.T) to the fact that it needs to protect itself and can no longer rely on the US Military Industrial Complex. Re-arming Europe seems to be the EU leaders first objective, but if they then see progress with this economically nationalistic kind of behaviour in the US then I would say that they will start to walk a similar path, even though the EU is quite protectionist by nature anyway. It may mean that you need to stock up on TEMU goods now, whilst the prices are still low!
I have probably dedicated more time here to the Trump administration than I had wanted to, but it is clearly on alot of minds and so was worthy of a few lines.
However, on our conference we did discuss other investment matters, which arguably are not quite as important as what is happening in the US administration, but also warrant some time being spent on them.
These conferences are always interesting to get perspective on certain matters and the issue of Greenland was brought to light as follows:
From 1951 to 2004 the US had the right to place US bases in Greenland without any permission required.
From 2004 this power was taken away when Greenland gained sovereignty and fell under the supervision of Denmark.
Now, the pre-1951 agreement is being re-negotiated, and although not a ‘free to do what you wish’, the US will certainly have the possibility to expand its military presence. Was the whole ‘buying Greenland fiasco’ just a ruse to restablish this agreement?
At the 2025 conference alot was made of AI and how it would be changing the world, putting people out of work and taking over our world. Just one year on and the view from the asset managers was almost completely the opposite, but also that it is not going anywhere soon.
However, an AI bubble (like the tech bubble of 2000), it would not seem to be. AI is already helping businesses to improve productivity but not by firing staff. There is no evidence of this and the companies running AI models themselves, are already profitable. In addition the Big tech companies are cash rich. It is more likely that AI integration will more of a messy technological shift, than a huge damaging effect and it’s very unlikely that AI stocks will be the cause of a global recession, or mass unemployment no matter what you read online.
Net income from Tech + comms services companies has grown from 23.1% in the year 2000 to 35.3% in 2025
A term was used: ‘Crap in – Crap out’.
What is being found is that the AI we know: ChatGPT, Google Gemini etc cannot be relied upon for accurate results.
Search results are based on the data that is out in the internet-o sphere. If that data is flawed then it has no way of knowing how to fact check it and hence it will produce inaccurate results. (In fact caught out ChatGPT on 3 occasions, when I knew its results were incorrect. I now use Google Gemini, which appears to be better). There is also a HUGE amount of internet fraud and scam and the culprits are using the internet to deliberately put out content which furthers their devious means. So, how can we rely on such a system? Markets are worried about the inability to overcome this problem and about a lack of innovation in AI. If we are all fishing in the same pool of information and being provided the same results then innovation and creativity grinds to a halt, and that is not good for businesses who are looking to find an competitive edge and / or increase productivity.
But, AI probably has a more focussed strength in it’s ability to gather, organise and analyse large data sets. Private data is the real gem! It’s what you can’t see rather than already public data. I may have mentioned in my Ezine last year the example of the Lancet medical publication in the UK, which has archives going back 203 years. It is almost unimaginable that human beings would be able to reference a tiny fraction of that information, whereas they are already using AI tools to organise data and information in their business and to make it available to a much wider and much more targeted audience. Data is the new gold! Loyalty card data would be a perfect example of data which can be privately exploited by companies looking to gain a competitive edge with the use of AI tools.
The strange thing with AI is that the people who are probably going to make money from it are not the people directly running AI tools, but more likely the periphery businesses that are needed to keep it running: energy providers and data centres being good examples: see images below to give you an idea of just how many resources are going to have to go into running and maintaining these centres.
Could nuclear and renewables be the winners long term?
INTEREST RATES: don’t expect rates on your cash to be rising anytime soon. If you are sat with the majority of your assets in cash, then you should really be thinking about the long term implications of inflation on these monies. This is exactly the scenario that governments wanted to see. Low interest rates (which keep government benefit payments down and debt repayments low) but an inflationary economy. They pay their debts down quicker amd erode them away, and we feel the pinch. You can see the interest rate trend in the chart below.
Given the US’s influence over the world’s major oil producers (Venezuela, Saudia Arabia, Iran and Canada) , it is likely that there will be a glut of oil in the next 5 years. This will most likely push prices down. This is certainly what the D.T administration wants. Energy prices and inflation should fall which could be good for US stocks in particular. The wider US market could benefit greatly.
I hope you have enjoyed this content! Once again apologies for the time taken to get it you. Unfortunately I don’t even think AI is sophisticated enough…yet…to decipher my scribbles and handwriting when note taking.
As always, if you have any questions, or would just like to send me some comments on what you have read here, then feel free to do so. I am always interested to hear your thoughts on these matters.
Equally, if you would like to follow up individually on anything then you can do so on gareth.horsfall@spectrum-ifa.com or message / call me on +39 333 649 2356
By Gareth Horsfall
This article is published on: 5th February 2026
We are a team of fully regulated financial advisers working across Europe, with a strong presence in Italy since 2010. Our focus is on helping expatriates, and returning Italians from abroad, who are residents or want to become residents in Italy.
By Gareth Horsfall
This article is published on: 22nd January 2026
For those of you who read my last Ezine you will be happy to know that I got my wellies for Christmas and also a more than welcome surprise of a toolbelt. I feel complete! I have been putting both to good use in the last week (seeing as though we have a good weather spell), by doing some early morning ‘potatura‘ of the olive trees.
I thought I would have a go myself this year since the chap who came last year hasn’t committed and it appears to be quite hard to find people in the area who are not already booked up. So, I thought I would give it a try after reading a few books, speaking with numerous people about it and watching far too many Youtube videos on the subject.
I am quickly realising how obsessive one can become when you are pruning olive trees, regarding correct shape, removing too much or too little and wondering whether the tree is growing too high, how to train it further down, whether to cut this branch or the other one. It’s quite therapeutic actually although it appears to be rather arbitary because we have no idea where the olives will produce, how many, and if environmental factors will affect production this year. However, as my 7.30am to 9 am morning routine (when not travelling) it is a good way to start the day.
Anyway, for my readers who have been doing this for many years, I will let you be the judges. See some fotos below. (Feel free to send comments about where I might be going wrong).
Moving on from land work I wanted to send this brief Ezine out just to reconnect in the New Year. 2025 proved to be a positive year for our investment accounts and it is anyone’s guess what is in store for 2026.
I am attending the Spectrum IFA Group annual conference from the 26th to 30th January and will be doing my usual round-up Ezine when I get back. We will be speaking with Rathbones Asset Management, Evelyn Partners, Prudential, New Horizon Asset Management, LGT Wealth Management and others as well.
But, before I return (hopefully Greenland will still be a part of Europe by then) I wanted to share some information on Italy with you, as a light hearted read.
On Facebook I follow a page called Dataroom di Milena Gabanelli. You may know of her from the programme ‘Report’, which is where I first became familiar with her around 15 years ago. Now she works for Corriere della Sera and has her own FB channel. It’s very interesting as they regularly put out content about Italy and global events but backed up with solid facts.
The most recent one I saw was ‘Chi paga meno tasse’. A look at the health system and exactly where tax revenue is coming from to support the system itself.
The following is summary of the video, which is only a few minutes long, but provides some quite interesting information, which I wanted to share with you.
(The data is taken from studies of contributi previdenziali relative dichiarazione 2023.)
Did you know that 76% of taxpayers in Italy declare less than €29000 gross per annum.
This group do not pay towards the health service because they are exempt. Their income is below the threshold set by the Italian government. (The ticket)
9% of taxpayers in Italy declare between €29000 and €35000 gross p.a.
This group pays for health expenses but not for welfare (pensions and schools!).
Only 15% declare over €35000pa.
This group contributes to both the health system and the welfare. They pay for the majority.
With an income of €29000 gross pa there is likely to be very little margin to pay your health care expenses. In this category fall many ‘pensionati and dipendenti’ and so we can exclude them for the purposes of the analysis.
The rest are autonomi ( self-employed people- like myself)
To analyse further to see whether any of these people have a real need or if they are working in nero, we can look to the index ISA which looks at fiscal ability to pay. They work on a points based system and if a contribuente has under 8 points then there is the risk of fiscal evasion.
Here we have some interesting facts:
Anyone who is declaring less than they actually bring in is also paying less contributions towards the health service and also they will receive less pension, which means that the people who are paying will have to pick up the bill.
The Agenzia delle Entrate are not funded well enough, even though they have some interesting tools at their disposal, and can do controls on only 4.5% of people / businesses annually.
It’s no surprise that the Italian government really doesn’t have much, if any, room for manoeuvre to change tax rates and why the health service is underfunded.
If you like those facts you may also like the following ones about the explosion in short term rentals in Italy (affitti brevi), which go some way to explain why many cities and famous locations in Italy are now almost impossible to visit without a tremendous amount of people all doing the same.
In the market of short-term rentals Italia is No 3 in the world behind the France and the USA!
If we analyse some of this data then we can see that 75% of these rentals are in the hands of private landlords and 25% managed by agencies.
Agencies, in general, retain 35% of the income to manage the cleaning and change of sheets etc. Almost all of the advertisements are now on the digital platforms like AirBnb and Booking.com, who in general keep between 14 and 18% of the income. The same platforms have been obliged since 2017 to apply a withholding tax of 21% on gross income.
In the Legge di Bilancio 2026 this withholding tax of 21% now applies to the first property. For the second a witholding tax of 26% and for owners of 3 properties or more, they are now deemed to be a business activity and must open a partita IVA (VAT position). The war on private landlords continues, not just here in Italy but across many countries, but whether it will make much difference in the long run is anyone’s guess.
If you have enjoyed this information so far, then I will leave you with the world of Italian politicians and how they are paid (c/o Dataroom di Milena Gabanelli)
They are paid well because they should, in theory, not be corruptible and should work in the interests of the country.
An Italian politician is entitled to a number of benefits, ranging from:
Indennità parlamentare, which is a compensation payment for being a politician and spending time away from home. It is currently €10435pm Gross or €5000-5300 pm after taxes and contributi.
Diara (per deputati e senatori) – just €3500pm
+ Expenses reimbursement.
These do not always have to be documented!!!!
They also qualify for reimbursement of travel expenses
And reimbursement of telephone expenses
Pensions
The same politicians are entitled to a pension after only 5 years of working in Parliament. (versus 20 years for the rest of us!)
Interest payments
They are also entitled to an interest rate of 5.4% on the money in their savings and current accounts. The bank pays this automatically versus the average rate for us , at about
0.2 %
And on that note I will leave it there. This Ezine was really was meant to be a light-hearted way of staying in touch.
I will be following this up from our conference with a market review from the week after next, followed by some other Ezines on tax and also organising your affairs for your loved ones.
By Gareth Horsfall
This article is published on: 24th December 2025
I am hoping for a new set of wellies this year because the emergency pair I bought when we purchased the property didn’t last very long at all.
I sent out a not-so-subtle message to my wife and so I hope my Christmas wish comes true.
I will then be able to also complete my true Yorkshire look in Umbria.
I hope you have a very Merry Christmas and Happy New Year, whatever you are doing.
We will be relaxing at home this year. My Mum has just been for a few days to visit (she hasn’t seen the house since June 2024 when we were in the phase of renovation) and so it was good for her to see it for herself. We are now on our own, but have lots of fun things planned. My son will be playing in the local Pasticceria Russo, in Amelia, this evening (23rd) , playing one of his newly learned Beethoven classical piano pieces.
The Pasticceria is becoming a bit of a focal point for us in the area (as it seems to be for alot of other people as well) and they have their amazing range of sweets and Panettone artiginale, which is a little bit too more-ish for my liking. I am trying my best to resist the temptation and am doing OK, until now! The only way to combat that is to engage in more physical land work anyway. As many of you have told me since we moved here: ‘there is always work to do on the land’.
It will keep me out of trouble until I am back into work full-time in the New Year.
By Gareth Horsfall
This article is published on: 20th November 2025
I have been contacted by a number of people since September who have received letters from the AdE, this would not normally picque much interest for me because the AdE send regular letters out to try and weed out potential errors or omissions from your tax return in fact I have had a few myself over the years.
However this letter was of particular interest because it broached the subject of residency and non declaration of assets, at all, ever.
Over the years I have seen many times where someone has made a tax declaration, but where errors have been made and / or omissions, and the AdE have eventually caught up with the error and the individual concerned has had to correct the error, pay the back taxes and penalties. Fair enough mistakes happen and often through bad advice on the part of the commercialista but one category of people who seems to have evaded the oversight of the AdE were those people who are resident in Italy, and for one reason or another have never made a tax return here. The main reason is because they were badly advised by a commercialista to not ‘enter the system’ or that they were declaring in another country thinking that it wasn’t necessary to do so in Italy.
However, it may look like that particular issue has been uncovered by the AdE, in fact, in a short period of about 5 weeks, I had 6 people contact me, all with very similar situations, relating to not having filed for taxes in Italy and subsequently receiving a letter from the AdE asking them to visit their local AdE office and explain the anomaly.
Whether this is an awakening for the AdE for merely just a blip is anyone’s guess but I suspect they have finally got the right hand speaking with the left hand and they will weed more of these issues out in the near future. It all corresponds nicely with the change in definition of residency from Jan 1st 2024 and so is probably the start of a wider push to make sure that everyone is doing what they should be, whether they know it or not.
So, in short, if you are resident in Italy then it is more than likely that you should be declaring your financial situation for taxes each year, if a commercialista tells you that you shouldn’t or don’t need to file, then you need to question that and not just take their word for it. I would request written, signed confirmation that this is the case. Equally, filing for taxes in another country, thinking that this is sufficient, is generally the wrong thing to do and you may want to explore this further to avoid eventual contact from the AdE.
If you happen to be in this situation and are wondering what steps to take, do not hesitate to get in touch. I have helped many people through this situation in the past, it’s better to address the matter before being picked up by the AdE.
Now, let’s move on to the subject of the UK property market.
“Property is the best investment”
I don’t know how many times I have heard this said to me in my career, which has spanned an era when property investment probably has been one of, if not the best investment to make.
However, everything is cyclical and whilst UK residential property may have been a great investment, that doesn’t mean to say it will be forever. In fact, the UK property market has stalled, at the time of writing, and it remains to be seen whether it is just a pause for breath or part of a longer period of downturn for the UK property market. As I have repeated many times in the past, in times of needs, governments will turn to the real estate market to generate tax revenue because it is has been the go to investment of choice for most people. The UK budget will roll around at the end of this month and we will see what kind of moves Rachel Reeves makes on the UK property market, it is expected that she will tax properties over a certain value, but little is known at this time. (I spoke with an investment manager in London recently who said they are bracing themselves for a ‘brutal’ budget, were his exact words).
However, as usual these are just my musings.
To explain in a bit more detail Rathbones Investment Management recently wrote a great article for a professional publication and I thought to share this with you here.
The UK’s love affair with property investment is apparent across newspapers, daytime TV and social media. An English person’s home may be their castle – they’ve also regarded it as their nest egg (and the same for other Britons). Many have even bought additional castles, such is their ardour for property. Reflecting this, official figures show more than 2.8mn private landlords in the UK.
However, the days of strong returns from residential property are already past. The past decade has seen three pieces of bad news. House price growth has been slower; higher interest rates have squeezed the buy-to-let business model; the regulatory treatment of private landlords has become progressively less favourable.
The economic and policy outlook suggests those headwinds won’t dissipate. From 1980 to 2016, UK house prices rose 6.7% per year in absolute terms, or 3.3% in real terms (after allowing for inflation). Prices in London rose even faster: 8.5% in absolute and 5.0% in real terms. That rate of capital appreciation is considerable – and investors making an income from renting out properties would have made even more.
It’s difficult to compare returns from property exactly with returns from other investments, for various reasons – such as the cost of mending that leaky roof. But taking the crude numbers, the capital appreciation of a portfolio made up of 25% UK equities and 75% international equities would have been only slightly higher at 9.0% per year or 5.5% after inflation.
What drove high house prices?
What lay behind this? One cause is higher wages. As earnings have risen in real terms, households have been able to spend more on housing.
Between 1980 and 1998, the average UK house price rose by 2.6% above inflation per year. So too did the average wage. As result, the house price-to-earnings ratio – the average house price divided by average earnings – was similar in both years, at around 4.3, although it did fluctuate a lot between these two points.
However, since 2000, the ratio has risen to as high as 8 and never fallen below 6. So pay can’t be the whole story behind the price rises.
A fall in interest rates helped sustain higher house prices relative to earnings. Double-digit mortgage rates were the norm in the 1980s and early 1990s. But these dropped to as low as 1–2% by the late 2010s. This shift allowed buyers to borrow a lot more money for any given level of monthly repayment, bidding up house prices.
Other changes to the mortgage market have probably helped push UK house prices higher, by increasing the availability of loans and encouraging property investment. These include the entry of banks into the mortgage market, the introduction of buy-to-let mortgages, and market innovations, such as the government’s Help to Buy scheme.
Moreover, housebuilding has failed to keep pace with population growth over the past fifty years or so. In other words, demand has risen faster than supply.
Productivity, rates and policy
But conditions for house price growth now look much less fertile. After a period of far outstripping inflation, average earnings have grown much more slowly lately. Even if we ignore declining real wages in the early 2010s, they’ve only outpaced inflation by 0.5% a year since 2016. In the long run, real-terms wage growth is closely linked to productivity – companies generally only pay their workers more if they’re getting more from them. But productivity growth has in recent years been low – and we don’t foresee a dramatic improvement anytime soon.
Moreover, mortgage rates have risen in the past few years. The average 2-year fixed-rate 75% loan-to-value mortgage rate has climbed from 1.2% in 2021 to above 4% since 2022, according to the Bank of England. This has pushed up first-time buyers’ repayments. We don’t see a return to the abnormally low interest rate environment of the 2010s.
On top of higher interest rates, unfavourable tax changes and tighter regulation have added to costs. For example, stamp duty on additional properties was hiked in 2016 and again in 2024.
Moreover, the housing supply pipeline is flowing better. Although the government has fallen short of its housebuilding targets for years, the annual net increase in dwellings has crept back up since 2015, returning to above 200,000. On this measure, the housing stock is growing at the fastest rate since the 1960s.
End of the affair
With those fading tailwinds in mind, it’s little surprise that UK house prices have risen by a much more pedestrian 3.7% per year, in absolute terms, since 2016. That’s only about the same as inflation. Over the same period, the portfolio of UK and international equities we mentioned earlier rose by 7.2% a year.
We think this trend will continue. In our view, it may be time for the British to break off their love affair with the housing market and embark on a new one, with a diversified portfolio of financial assets. After all, 10- year UK government bonds offer yields above 4% and there’s a wide selection of high-quality names across the world’s stock markets. It might not be the most romantic of trysts, but we think it’s likely to offer them a better return in the long term.
For those of you who can remember as far back as the year 2000, as an investor, you may remember the investors favoured around the possibilities of the introduction of the internet (I think we were still working on dial-up connection at the time and my phone was probably a Nokia 3310. The world of today’s smart phones was about another 8 years away, when the iPhone first launched). I remember being at a business meeting in Geneva in 2005 and there was talk of being able to call over the internet from your phone in the near future and being able to answer emails more easily on your phone.
Little did we know how far we would come so quickly ! In the year 2000 there was much hype about this future and that fuelled what is now called the ‘tech boom’ in dot com stocks. Inevitably, this created a bubble in dot com stocks and a subsequent crash in the markets when investors realised a lot of the hype was largely based on fresh air and not much substance.
I have been asked quite a few times in the last month or 2, about the possibility of something similar happening in AI and tech stocks today.
It must be said that the circumstances are quite different this time round. Companies are actually profitable in 2025, and A.I will create problems in the employment market, but also deliver productivity gains.
(Interestingly, I saw an article the other day saying that Italian companies who had laid off employees to benefit from cost and productivity gains from the introduction of AI systems, were doing an about face and re-hiring those same workers because they realised that AI was not going to deliver all those gains which they had been promised).
Anyway, rather than writing a long discourse on the topic I asked Chris Saunders of New Horizon Asset Management what he thought, on this short video with my question and his answer. I hope you find it interesting.
As part of Giorgia Meloni’ s government’s promise to the Italian people, IRPEF ( income tax) rates would be simplified and even reduced with their long term goal of having a much more simplified tax system ( good luck with that Giorgia !).
In the Legge di Bilancio 2026, which is currently being debated in parliament, they have proposed to reduce the second progressive rate of income tax, which currently sits at 35% for gross income between €28001 and €50000pa, to 33%.
Now, as I have often been heard saying, they are just playing around the margins and this kind of tax reduction will hardly have any real impact for most people who might be struggling with higher prices of the last few years and facing a continued erosion of their income. However, it is still something and in line with the promises made by the current sitting government. (At time of writing it does look like this will be approved and implemented from 2026).
This is the one that is creating the greatest political friction at the moment and, so what is it?
The proposal is to increase the cedolare secca tax on rental properties from 21% to 26% from 2026.
Cedolare secca 21% is the tax that is paid on rental property income, where selected, and is a kind of forfeit rate. The income from cedolare secca is not taken into account when calculating your other total income subject to income tax (IRPEF) and so is quite attractive for most. There are some disadvantages, which I won’t go into here because in the main the 21% tax rate is the go to option for most. However, it is proposed to bring this up to 26% on rental income (for private renters, rental agencies and rental agencies online).
As per the UK, see above, real estate is a go to cash cow for governments when they are looking to raise revenue and so this move (although likely to be watered down or removed altogether because Forza Italia are not in agreement and will not vote for the proposed change) is something that we will likely see happen more often.
If, as may be intended, it is being introduced to cool the housing market and, especially in the big cities, cool the rental market itself, I am sceptical that it will have an effect at all. Having lived in Rome for the last 20 years and seeing the explosion in the Airbnb apartment for rent, and the constant stream of tourists to occupy those places then I can’t see that an increase of 5% will hurt that much, other than those who have high debt levels to service.
Anyway, it’s something worth watching, in case you have a rental property, or part of property in Italy which you are generating income from.
There has long been talk of London being one of the world’s premier financial centres and for some time, I think, it held the No 1 spot for a period as well, however, that would appear to be changing.
On one of my economist social media feeds, I saw these graphics recently which I thought I would share.
An IPO (Initial Public Offering) is where a private company decides to list on the public stock exchange so that it can raise capital and offer its share to investors. They normally choose to do this when they reach a certain size, as a way of accelerating company growth. In which jurisdiction they do this is important because it can generate a lot of revenue for the financial sector in that country, create jobs and also secures the attractiveness of the financial centre as a place that is deemed safe and secure to list publicly.
London used to be one of the preferred jurisdictions, but as you can see, in 2025, that is no longer the case. London now holds spot No 23 on the list behind some important newer entries, such as Hong Kong, China and India.
What this says about London’s long term future is anyone’s guess but it is interesting information all the same. (Could Brexit have played a part?) . It probably says more about the ever increasing importance of Asian economies and the continued importance of the USA.
