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Sardinia Drives Away Billionaires With New Yacht Tax

by Ulrika Lomas, Tax-News.com, Brussels

29 August 2006


Port towns in Sardinia are appealing to the EU to rule against a new tax directed at the wealthy owners of super-yachts, aircraft and mansions in this favoured resort area.

Sardina's governo, Renato Soru, is said to have imposed the tax after the Italian government withdrew regional funding. Earlier in August, Franco Cuccureddu, Mayor of Castelsardo, one of the affected towns, held a press conference in which he announced the contents of a submission to the EU intended to put the tax on hold. The mayor said "Everyone asked regional governor Soru to freeze this measure, but he ignores our requests. Even today, the Forest Rangers asked us to provide the whole list of boat owners. We don't have it, but even if we did we wouldn't have given it, because of privacy".

New president of Italian trade body UCINA said he was astonished at the cost of the tax, which proposes to raise 20 million euros, mostly through second home taxation. Up to EUR3m is expected to come from yacht owners. Ex-President Silvio Berlusconi is said to have a number of houses in the area and there is gossip that he is the real target of the tax.

Paul Allen, one of a roll-call of famous visitors to the island, has anchored his yacht Tatoosh this year off the Sardinian coast, out of reach of the tax, which would cost him around EUR15,000 just to anchor in Portorotondo harbour, his usual berth. Bill Gates is said to have cancelled his usual summer trip to Sardinia on another of Mr Allen's yachts, the 414ft Octopus, which would have to pay EUR25,000 to berth on the island.

Other regular visitors to the region include Roman Abramovich, who has a 340ft yacht, Pelorus, Princess Caroline of Monaco, rock star Peter Gabriel and Sheikh Yamani, the former Saudi oil minister.

Renato Soru says he is determined to tax the rich. He said: "In most cases, these rich tourists do not even spend a euro in Sardinia." The new law taxes yachts and houses according to their size; houses up to 2,153 sq ft within two miles of the shore will have to pay EUR3,500 a year. Private aircraft have to pay between EUR250 and EUR1,000, depending on size.

"This is a very hard blow," said Gian Battista Borea D'Olmo, the director of Portorotondo harbour. "It wipes out 30 years of work and is a gift for Croatia and Greece. That's where everyone will go."

TAGS: Italy

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