Commercial property finding in Italy

A centuries-old cultural legacy, preeminent art, architecture and natural attractions make Italy one of the world’s most sought-after tourist destinations and, hence, a very appealing, and strategic, destination for prospective investors looking for fruitful and cost-effective commercial real estate opportunities. Investing in commercial property in Italy – especially in accommodation and/or recreational  facilities – means gaining access to the remarkable economic flow created by the over 50 million visitors per year who travel to Italy. With the added value of the well-developed Italian manufacturing and design industries, whose high standard and excellent quality products are easily able to enhance a property’s all-round charm and add attractiveness.

When looking at the Italian commercial real estate market a prospective investor should focus on those assets most likely to profit from the Italian tourist market characteristics, i.e. the kind of commercial properties which respond to tourists’ desires and needs. 

Buying a hotel, a villa, or an agriturismo?

Long and medium term market surveys show that the most noteworthy and promising commercial properties in Italy are: hotels, bed and breakfasts, agriturismos (farm holiday accommodation solutions), holiday homes and farms. The first thing a prospective buyer certainly looks at is the overall Italian accommodation market, which offers a distinctive, and somewhat fragmented, scenario. With approximately 34,000 hotel properties Italy ranks third in Europe, immediately after the United Kingdom and Germany, comprising an average of 35% of 4 and 5-star hotels. Which is very significant data, seeing as ten years ago the percentage of 4 and 5-star properties was only 25% of the total Italian guestroom allowance. 

Another distinguishing fact about the Italian tourist-lodging landscape, characterized by a clear-cut prevalence of properties which house an average of 30 guestrooms, is that the great majority of these are either owned by independent proprietors or family owned and managed. Only a mere 4% of typical-sized hotels, and 13% of total guestrooms on Italian soil, is property of hotel chains: important hotel brands and professional operators generally seek large properties, interested as they are in more extensive properties readily adjustable to the brand’s space-facility standards. Characterized by a predominance of independently owned property the Italian commercial real estate market appears all the more fascinating to a potential purchaser, but the legislation and bureaucratic process may, at times, be dispiriting.

Italian law establishes a set of rules, limits and regulations concerning the management and running of businesses which imply using a property. Thus, the first main issue a prospective investor needs to address concerning the purchase of commercial real estate in Italy is ascertaining which licences and authorization need to be obtained and whether the specific property is subject to limits and/or structural characteristics that ought to be considered.

Depending on which type of property one purchases there are specific rules to comply with.

How to buy a hotel in Italy – the main rules

1. Hotel Properties – Licences, authorizations and permit requirements

All hotel properties are required to obtain a variety of mandatory licences and permits from the local authorities, including, but not limited to: the Certified Notification of Commencement of Activities (SCIA), specifically produced signage, advertising, health and safety licenses, licensing for the administration of food and beverages and in-house HACCP (Hazard Analysis and Critical Control Points) control for F&B management, attribution of the hotel category, non-smoking signage, authorizations external areas (such as garages) etc.

2. Land Registry classification for Hotels 

All hotel properties are required to have a specific Land Registry classification and comply with the technical and sanitary requisites as foreseen by laws and regulations currently in force on the subject. They must also comply with current legislation on fire prevention and safety and be in possession of the fire prevention certificate when necessary. 

3. Time limits for official licensing and registering of Hotels

Within 30 days prior to activity commencement the hotel proprietor is required to obtain formal registration in the Business Register at the CCIAA (Chamber of Commerce, Industry, Crafts and Agriculture), obtain a VAT number (Partita IVA) from the local Revenue Agency, register with the INPS (Istituto Nazionale della Previdenza Sociale, i.e. the Italian Security and Welfare Institute) and with the INAIL (the National Institute for Insurance against Accidents at Work) in the case of presence of employees.

Bed and Breakfast definition

A Bed&Breakfast, i.e. B&B, is defined by Italian Tax Authorities as a property consisting of a maximum of six guestrooms, located in no more than two furnished apartments located within the premises of the same building, in which accommodation and (possible) complementary services are provided to paying guests.

Legislation and limits for B&Bs

B&Bs are regulated by regional laws and specific municipal regulations, in compliance with l. n. 135/2001. Specific regulations determine a minimum surface area per guestroom (generally, 14 square meters for a double room and 8 square meters for a single room), defined in relation to the number of rooms and beds (the number varies from about 3 to 6 rooms, for a maximum of 6-20 beds), and set rules concerning basic furnishing requirements (i.e. bed, wardrobe, bedside tables, baskets, chairs, lamps, etc. must be provided). B&B specific rules also establish that guests have independent access to their room (i.e., without having to go through other bedrooms or service rooms intended for the owner/manager’s family or other guests) and that properties which host over a certain number of rooms or beds there be a minimum of one bathroom in exclusive use of guests. Regulations also determine set limits and rules for minimum cleaning (daily) and linen change requirements, (which can take place at different intervals and, in any case always, at each change of the guest).