Deed taxes halved also for non-resident open-ended real estate funds

The Court of Cassation, with the recent case no. 28595/2022, transposed what was ruled by the Community judges of the CJEU in joined cases C-478/19 and C-479/19 stating that the benefit that allows the application of halved registration, mortgage and cadastral taxes for real estate transfers in which closed-end real estate funds are part, must legitimately apply equally to open-ended real estate funds which - although not recognized in the Italian legal system - are regularly established abroad on the assumption that the "two categories of funds are objectively comparable".

In particular, the Supreme Court ruled that the current article 35 (10-ter) of the Law Decree no. 223/2006 - which subjectively limits the application of the aforementioned benefit to the transfers of instrumental properties in which closed-end real estate funds are part - is in contrast with the principle of free movement of capital pursuant to article 63 of the TFEU which, in the present case, "must be interpreted in the sense that it precludes a legislation of a Member State that limits the benefit of the reduction of the mortgage registration tax and cadastral taxes to closed-end real estate funds only, to exclusion of open-ended real estate funds, provided that these two categories of funds are in objectively comparable situations, unless this difference in treatment is justified by the objective of limiting systemic risks on the real estate market ". In the case in question - which concerned a management company of a real estate fund governed by German law that had purchased an instrumental property located in Italy to which this concession had been denied - the judges of legitimacy, called upon to rule on this point, adopted the argumentative process followed by the CJEU, ruling that the exclusion from the benefit in question for open-ended real estate funds legitimately operating in other Member States “cannot find justification, in light of EU principles on the subject, neither for real, appreciable and objective 'diversity' or 'non-comparability' of structure and operation (compared to closed ones), nor for the operation of an imperative reason of general interest".

Therefore, in the light of this renewed framework of the said article 35, it will be possible to benefit from the reduction by half of the registration, mortgage and cadastral taxes due on real estate transfers also carried out by non-resident open-ended real estate funds as well as evaluate the opportunity to request reimbursement of the higher taxes previously paid. To this end, it is worth noting that the deadline for submitting the refund application is, as a general rule, three years from the payment date of taxes.