The changes introduced by Italian Law Decree 34/2019, subsequently converted into Italian Law No. 58/2019, have introduced and institutionalized two new methods of approach to property management, understood as property management and as the requalification of assets used to guarantee credit. We are talking about the support vehicle companies (SVA, better known by insiders as “Reoco”) and the Real Estate SPVs, an absolute novelty for the Italian context.
The first mentioned were used almost immediately for at least two reasons:
1. in fact they already existed, the Italian Law Decree simply institutionalized and regulated a consolidated practice;
2. the concessions introduced by the legislator have made the use of SVA extremely convenient even in cases where previously it would not have been (on the subject, consult the link “How not to use a Reoco“).
The context changes for SPV 130 Real Estate. The lack of knowledge of this tool by professionals and the particular area of application have made the reception of this novelty more cautious. I am referring in particular to the fact that in Italy, those who work in the world of debt collection have over time become familiar with the concept of securitization, while those who work in the real estate field many times do not know this topic.
Recently, some of our investors and customers learned about the SPV 130 Real Estate and asked us for technical and practical support to better understand how the two legal entities in question differ substantially. In addition to the obvious differences in application profile, there are at least 3 operational arguments on which to pay particular attention:
– while SVAs enjoy tax breaks for the payment of registration tax during the purchase phase and future buyers can also benefit from these facilities, SPV 130 Real Estate does not have this facility; probably because in the first case it is deemed necessary to facilitate preparatory activities for credit recovery, but infact non-core for some market players;
– for both, the management model applied to the segregation of assets must currently and in the future consider the different types of obligations that the vehicle companies will have to contract. For example: ownership of a property generates implicit obligations such as the payment of taxes (IMU, Tari etc) and condominium expenses; these subjects are potential creditors to whom the segregation of assets and the non-petition clause can hardly be accepted ex post;
– the accounting approach is similar, although it is an SPV and a limited company. On the other hand, there are substantial differences with the SPV for credit securitization: above all the deductibility of VAT, which in the Real Estate SPV130 becomes possible, pro-rata permitting.
More generally, the topic can generate various food for thought especially with reference to the SPV 130 Real Estate for which at the moment it is more about theory than practice; during 2021 the legislator will most likely clarify the remaining shadow points and the first operating practices will arise.
Emanuele Grassi
