The leasehold of a Venetian island described as one of the most haunted places in Italy is to be auctioned next month as the state desperately seeks to raise revenue.

Poveglia, a small, uninhabited island in the Venice lagoon, minutes from St Mark's Square, is among five prime properties, including a castle and a monastery, that will go under the hammer in an online auction.

The 7ha island was fought over by the Venetians and the Genoese in the 14th century, before it became a quarantine station for ships arriving at Venice in the 18th century.

After plague was discovered on two ships, the island was sealed off and used to house people with infectious diseases, leading to legends of terminally ill Venetians waiting to die before their ghosts returned to haunt the island.


A hospital for the elderly, which opened in 1922 and operated until 1968, is rumoured to have carried out experiments on the mentally ill, including crude lobotomies undertaken by a director who was driven mad by ghosts before throwing himself from the hospital's tower.

The Italian Government is hoping for offers to transform the hospital into a luxury hotel under a deal giving the buyer a 99-year lease, with the island remaining the property of the state.

A further four properties listed for auction will be sold rather than leased, including a monastery in the crumbling old town of Taranto in Puglia, in the heel of Italy, and a 15th century castle in Gradisca d'Isonzo, near the border with Slovenia. A former barracks in Trieste is also going under the hammer, one of dozens of disused quarters built in the centre of Italian towns and dating back to the unification of Italy.

A further 148 properties are due to be auctioned this year, with the state hoping to raise more than $780 million.