Unpopular tax on Italian property becomes a key election issue

An unpopular tax on Italian
property that was reintroduced in 2012 is proving to be one of the key issues
ahead of the Italian general election. With various political coalitions –
including one led by disgraced ex-Prime Minister Silvio Berlusconi – fighting
for power, the property tax is set to be a major policy issue at the coming
election.

We look at the tax and the
various party policies next.

Italy set to abolish property tax on first residences?

Changes to the country’s unified
property tax (IMU) in 2012 were made in order to tackle Italy’s growing
economic problems. In late 2012, CGIL, Italy’s largest trade union
organization, calculated that the introduction of the tax had, by its re-application
to first residences, helped Italian families’ property costs to over 30 per
cent of their total expenditure.

The tax on ‘first residences’ was
originally abolished by Silvio Berlusconi’s  government in 2008 but was reintroduced in 2012 as part of Mario
Monti’s ‘Save Italy’ budget. The tax is applied (with local variations and an
allowance for family dependents) at a standard rate of 0.40 per cent to first
residences. Other residences are subject to a tax rate of 0.76 per cent.

Tax News reports that ‘there have been continual rumblings against
IMU as public attention has been drawn to the extent of local tax increases.’
Silvio Berlusconi has already confirmed that the tax would be repealed on first
residences if his coalition was returned to power in a parliamentary election
whilst current president Mario Monti has also hinted that he would change the
unpopular tax.

Taxes need to be cut, but
no one should be making promises that cannot be kept,” Monti told SkyTG24
television. The property tax ‘should be restructured and modified’, he said.

Abolishing the tax on first
residences would clearly help people who live in their Italian property,

However, anyone with a second or holiday property in Italy is likely
to have to continue to pay the tax irrespective of the election outcome.

Author: Nick
Marr