New tax affects sales of property in Italy

A new property tax and an ongoing
recession have been blamed for a fall in the number of property sales in Italy
at the start of 2012.  House sales
in the country fell to an eight year low in the first quarter of this year,
with transactions down a fifth on 2011 levels.

Keep reading to learn more about
how these economic factors are affecting the property market in Italy.

20 per cent fall in Italian property sales

The most recent report from the
Italian Finance Ministry’s Agenzia del Territoria showed that there were around
110,000 transactions in the first quarter of 2012 – around 20 per cent fewer
than the same period in 2011.

The fall is the biggest drop seen
since records began in 2004.  Total
sales fell 18 per cent in the last year.

The report said that the decline
was ‘mainly driven’ by the recession while a new property tax that began to
influence buyers in the first quarter ‘won’t be an incentive for the market.’

The report showed a significant
fall in sales both in small towns and the country’s eight largest cities.  This was an ‘abrupt reversal from the
upward trend’ in the second half of 2011, according to the Agency.

New property tax not helping the market

A new property tax was approved
by the Italian government in December 2011 and the levy is expected to raise
around 21 billion euros.  Payments
of the so-called IMU tax are for the first time In June 2012 and marked the
return of taxation on primary residences after four years.

Commenting on the report, Mario
Breglia, chairman of real-estate research firm Scenari Immobiliari, said: “Given
the overall level of taxation and the economic conditions, I am actually
surprised that there were still some 100,000 houses sold in the first quarter.

“Looking at the latest three
months, we expect an even worse performance.”