Sardinia plans tax bill for its tourist glitterati

The Sunday Times January 08, 2006 / John Follain

The white sand, crystal waters and five-star hotels of Sardinia’s Emerald Coast have long been a haven for some of Europe’s wealthiest holidaymakers, from Princess Caroline of Monaco to Roman Abramovich, the billionaire owner of Chelsea football club.

From this summer, however, they may feel somewhat less welcome. The authorities on the Italian island want to impose stiff new taxes on the yachts, private aircraft and second homes of foreign visitors.

Despite the money the tourists already bring in, Renato Soru, centre-left president of the regional government, has drawn up a draft budget that includes what the local media have called a “tax on luxury” — which he hopes will raise as much as £550m this year.

“Let’s tax the rich,” said Soru, a former internet tycoon. “In most cases they are tourists who don’t spend even one euro in Sardinia and yet are heavy users of the services provided by the regional authority.”

Under the proposals, a mooring tax will be imposed on yachts according to their size. The owners of boats more than 98ft long will have to pay £13,700. From the beginning of June to the end of September, owners of private aircraft will have to pay an extra levy of £140-£690, depending on the number of passengers the craft can take, each time they take off or land on the island.

Owners of second homes who do not live permanently in Sardinia will also have to pay more.

Soru wants houses of up to 2,153sq ft within two miles of the shore to be taxed at £2,060 a year; each extra 11sq ft will add £100 to the annual charge. Those within 300 yards of the sea will pay 20% more. There will also be a 25% tax on properties sold.

“Those who live in our region for three months and elsewhere for nine must pay taxes in Sardinia for those three months at least,” Soru said. “Until now we’ve been taken for a ride, now basta (enough).”

Soru, who estimates that 150,000 villas will be affected by the new rules, intends to spend part of the money raised by the new taxes on preserving the environment.

Among those hardest-hit would be Silvio Berlusconi, Italy’s billionaire centre-right prime minister, who owns seven villas on the Emerald Coast, including the 27- bedroom La Certosa outside Porto Rotondo. Sardinian newspapers have estimated that Berlusconi could face a £165,000 tax bill for La Certosa alone.

At least Berlusconi will not be subject to the yacht levy: he sold his million-pound craft, the Principessa Vai Via, to a business partner three years ago.

Abramovich who last summer anchored his 340ft vessel, Pelorus, off the resort of Porto Cervo, will be affected as will Princess Caroline of Monaco, who sails there on her 1930s yacht, Pacha III.

Other owners of luxury villas in the area include Sheikh Yamani, the Saudi former oil minister; Peter Gabriel, the musician; and Fiona Swarovski, the heiress. Recent visitors include Leonardo DiCaprio, Julia Roberts, Madonna and the supermodel Gisele Bundchen.

Berlusconi has refrained from commenting directly on the new taxes, but has sent Giuseppe Pisanu, Italy’s Sardinian-born interior minister, to spearhead opposition. On a visit to the island last week, Pisanu criticised the budget bill, saying it would discourage both investment and “high- quality tourism”.

“It’s an aberrant measure which risks inflicting a devastating blow to Sardinia’s tourism growth,” Pisanu said. The government is considering an appeal to Italy’s constitutional court to have the new taxes thrown out.