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 Ã¢â¬â including one led by disgraced ex-Prime Minister Silvio Berlusconi Ã¢â¬â 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 countryÃ¢â¬â¢s unified property tax (IMU) in 2012 were made in order to tackle ItalyÃ¢â¬â¢s growing economic problems. In late 2012, CGIL, ItalyÃ¢â¬â¢s largest trade union organization, calculated that the introduction of the tax had, by its re-application to first residences, helped Italian familiesÃ¢â¬â¢ property costs to over 30 per cent of their total expenditure.
The tax on Ã¢â¬Ëfirst residencesÃ¢â¬â¢ was originally abolished by Silvio BerlusconiÃ¢â¬â¢s government in 2008 but was reintroduced in 2012 as part of Mario MontiÃ¢â¬â¢s Ã¢â¬ËSave ItalyÃ¢â¬â¢ 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 Ã¢â¬Ëthere have been continual rumblings against IMU as public attention has been drawn to the extent of local tax increases.Ã¢â¬â¢ Silvio Berlusconi has already confirmed that the tax would be repealed on first residences if his coalition was returned to power in a parliamentary election whilst current president Mario Monti has also hinted that he would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 Ã¢â¬Ëshould be restructured and modifiedÃ¢â¬â¢, 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