By Allen Kenney

After a yearlong wait, the Italian government in December implemented much-anticipated REIT regulations.

“Italian REIT regulations were issued one year ago, but they are becoming operational only now,” says Michele Gusmeroli, a manager with Studio Legale Tributario, an Italian law firm associated with Ernst & Young International Tax Services. The new laws are most likely to benefit retail investors, he says, and will provide an alternative to the current Italian real estate investment funds that operate like closed-end mutual funds.

The guidelines of the Italian REIT legislation, known as Societa per Investimenti Immobiliari Quotati (SIIQ), were decided in December 2006, but the implementation of the new regulations had been in limbo during the interim period. The first SIIQs—the Italian equivalent of the U.S. REIT—were expected to be unveiled as soon as January 2008.

The Italian REIT laws strongly resemble their U.S. and French counterparts. However, unlike the U.S. system, the Italian regulations retain capital gain taxation upon the disposal of assets.

After a yearlong wait, the Italian government in December implemented much-anticipated REIT regulations.