Vatican denies reports of “secret property empire”

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The Vatican has refuted reports of a "secret property empire" built up by the church using millions of pounds given to them by Mussolini. The tiny city state in Rome owns real estate around the world, the Guardian reported last week, including the upmarket premises of Bulgari in London's New Bond Street.

This commercial property "empire" has been "[disguised behind [an] offshore company structure", said the paper, using a fund that originated from [Benito] Mussolini, who paid the state "in return for papal recognition of the Italian fascist regime in 1929".

Over the years, that sum has grown to over £500 million, £15 million of which was used to buy 30 St James' Square in the UK capital in 2006.

Nothing to Hide

But sources within the Holy See hit back at the "misleading" claims, explaining to the Telegraph that the money was compensation, issued under the Lateran Accords of 1929, for the properties the Vatican lost in the Papal States, such as the Quirinal Palace in Rome, which has since become the residence of the Italian President.

As for the investment in real estate around the world, it is no secret, said Vatican spokesman Father Federico Lombardi.

"This article reveals nothing that was not known already," he commented. "The fact that Administration of the Patrimony of the Holy See has a special section [for real estate] is even recorded in the Vatican telephone exchange."

Taxing Debates

This is not the first time the Vatican's real estate empire has caught media attention. Last year, the Church came under fire for its exemption from property tax following the introduction of a new levy against Italian homeowners by Prime Minister Mario Monti.

130,000 people signed a petition for the Church's exemption to be revoked, prompting "Super" Mario to announce in November that the Vatican would have to pay tax on non-religious properties in the near future. The change would see an estimated €720 million injected back into the country's economy every year, a major boost to Italy's attempt to recoup its deficit.

Fee at Last?

Since then, Mario has added that the unpopular property tax might even be removed altogether. Speaking ahead of the country's February elections, the outgoing prime minister said that he would alter the levy, something that his rival, former leader Silvio Berlusconi, also promised to do.

"Taxes need to be cut," Mario told SkyTG24 , stressing that "no one should be making promises that cannot be kept".

Indeed, Italy's economy and property market has declined significantly in recent years, exacerbated by the government's austerity measures. Prime real estate is the only area to see strong demand, according to Knight Frank, with the rest of the market's prices falling by 30 per cent in November 2012 compared to 2008.

"A Good Time to Buy"

Nonetheless, the current slump is a good opportunity for buyers, according to some experts.

"There could not be a better time to buy in Italy," according to Linda Travella of Casa Travella, who emphasises the remarkable deals that are now available- and not just at the low end of the market. Expensive homes in places such as Lake Como have seen discounts too.

"There is a vast difference in what you can buy for your money now and what you could buy in 2008 and not enough people are taking advantage of it," she comments.

"2013 started well," she adds, "with more interest than I expected in property overall. The fact that there is interest in the lower end of the market is encouraging as these were the first Italian properties to stop selling in the economic downturn."

With homes in Liguria, Tuscany and Lake Como now increasingly affordable for international buyers, it's not just the Vatican who can build a property empire overseas.

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