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 MinistryÃ¢â¬â¢s Agenzia del Territoria showed that there were around 110,000 transactions in the first quarter of 2012 Ã¢â¬â 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 Ã¢â¬Ëmainly drivenÃ¢â¬â¢ by the recession while a new property tax that began to influence buyers in the first quarter Ã¢â¬ËwonÃ¢â¬â¢t be an incentive for the market.Ã¢â¬â¢
The report showed a significant fall in sales both in small towns and the countryÃ¢â¬â¢s eight largest cities. This was an Ã¢â¬Ëabrupt reversal from the upward trendÃ¢â¬â¢ 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: Ã¢â¬ÅGiven 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.
Ã¢â¬ÅLooking at the latest three months, we expect an even worse performance.Ã¢â¬Â