A generous tax amnesty will be available to Italians until mid December. 80 billion euros were repatriated to Italy during previous tax amnesties in 2001 and 2003.

Italians repatriating cash will have to pay a one-off 5 percent penalty. The new money attracted back to Italy will be used in a variety of ways. Analysts expect much of this will find its way into the real estate sector, positively driving the market from 2010, with the prime beneficiary being residential property.

"I think more or less 20 percent will go to real estate but not immediately," said Mario Berglia of the independent research institute Scenari Immobiliari. "A part will remain parked, waiting for the market to become more sparkling."

The amnesty law driven through by Economy Minister Giulio Tremonti also allows the return of money hidden abroad through accounting fraud, a move that displeased political opposition who said the bill legitimised crime. Last week, discounting this moral hurdle in favour of economic expediency, Tremonti declared he expected a windfall of up to 4 billion euros.

Professionals and small businessmen are among those expected to take advantage of the temporary tax window, and the expectation is they will invest in residential, commercial property and small offices.

Meanwhile Joachim Sandberg of Cushman & Wakefield indicated that the Italian residential market had been relatively unscathed by the global downturn. Commenting on the likely effect of this new stimulus he said

"The overall impact on the market will not be extraordinary and some niches such as high-quality residential will benefit more than others. Investments will be fragmented."

Italians view property as a long-term rather than a speculative investment and the market as a consequence is nowhere near as volatile as other European countries like the UK, making Italian property a less risky investment proposition than most areas.