IMF calls for Italian property tax reinstatement

News by Propertyshowrooms.com

The International Monetary Fund (IMF) has called for the reinstatement of an unpopular Italian property tax. According to the body, the levy on primary residences must be returned to ensure equity and efficiency in the market. The tax has already gained much publicity, as former premier Silvio Berlusconi made the suspension of the charge a condition of his support for Enrico Letta’s government. Current prime minister Letta claims his administration will decide later in the year whether or not to revive the tax, but bringing it back could lead to political backlash.

However, the tax isn’t the only change to the property market recommended by the IMF. In a statement the organisation claimed a review of cadastral values must be accelerated to ensure fairness. These values act as an assessment basis for all types of tax that occur when buying a property in Italy. The value is calculated by multiplying the cadastral revenue by a fixed coefficient, based on the type of property. Nevertheless, the current system has been deemed to be unfair.

The extent to which Italy will adopt the recommendations remains to be seen but, to turn the overall economy around, action needs to be taken. The IMF has said that despite the fact “bold steps” have been taken in the country since the late 2011 crisis, growth prospects are “weak”. In a statement the body said: “Unemployment is unacceptably high, and market sentiment is still fragile, underscoring that the task is far from complete.”

Domestically this doesn’t bode well for Italian property and unlike Spain, foreign investors aren’t overly active. With the IMF claiming there are “strong headwinds” on the way to recovery, there is undoubtedly cause for some concern. Yet, the government is building on steps taken to address Italy’s structural problems and kick start growth. Europe’s position will also play a part and the IMF claims it has to “address the financial fragmentation and strengthen further the currency union”. This will help to loosen the restraints on private spending. International Property and Real Estate News from Propertyshowrooms.com