We have dealt with taxes that apply in Italy on real estate in the case of purchase by private individuals or companies and in the case of transfer of ownership because an inheritance. To complete our work with respect to the taxation of real estate in Italy, we need to speak now of “ IMU ” ( Imposta Municipale Unica ), ie of’ tax which applies on the possession of a property, during the period in which you own. This tax was introduced in Italy in 2012 and even if the rates are rather marginal, now in 2013 they are already talking about its possible abolition for the negative impact that the tax has on global economy. The new Italian Government announced in fact that Italians citizens do not have to pay the rate of IMU scheduled for the month of June.
In the meantime, however, we see the features of this tax. We need to say first that it benefit the italian municipalities, it means the big cities as well as the small towns ; it is the law of the state, however, that laying down the ordinary rates at which the municipalities must refer in determining the specific rate to be applied to real property within their territory. Specifically, these ordinary rates are fixed by the state to the extent of 0,4% for the first home, the house in which the owner lives, and to the extent of 0,76% for all other properties. Municipalities, as we have said, may determine the specific rates to be applied in their territory by reference to two ordinary rates above mentioned : for the rate concerning the first house, the municipalities have a margin of deviation, set by the law, of the 0,2% ( and so, in practice, the rates can vary from 0,2% to 0,6% ) while for the tax rate that applies to all other property unlike the main residence the margin of deviation is 0,3% ( and in this case the rates may vary from 0,46% to 1,06% ).
With respect, instead, to the basis on which the tax is applied, even the “ Imposta Municipale Unica ”, like all other italian taxes on real estate, is applied to the cadastral income, ie the income that the state attributes to each property within its territory. This cadastral income, for the purposes of application of’ IMU, must first be raised by 5% and then subsequently multiplied by the multiplier coefficients that vary depending on the classification of properties ( for buildings classified as ” category A”, which include apartments for residential use, the multiplication coefficient correspondent is 160 ).
Finally, as regards the period of payment of IMU, the law has established that it must be paid each year in two periodes, in the month of June for one part and, for the remainder, in the month of December.
Of course, given that the principle of taxation is the place of taxation ( the Italian territory) and not the place of residence of the people, even the foreign owners in Italy are subjected to the payment of’ IMU.
After this brief explanation of the “ Imposta Municipale Unica ”, it is important to emphasize, however, that now at the center of political debate in Italy there is the possible abolition of this tax. In fact, as you can imagine from the title of this article, the new Italian Government Letta, formed a few days ago, has already announced that Italians citizens do not have to pay the instalment expiring in the month of June ; also, another important fact, one of the two members of the governing coalition, the PDL ( popular party ) asks for not to paying the instalment expiring in December, and so asks for the full abolition of the tax on the ownership of real estate.
Whatever the measures which in practice will be taken by the Italian Government, it is clear that the trend is towards a significant reduction, if not the final overcoming, of this tax. Assuming then that is definitely the trend, you cannot complain the decision of the government, given the negative effects that this type of tax has on the general economic plan.
The elimination of IMU will also contribute to the revival of the real estate market in Italy that in 2012 showed a decline of reale estate prices of 4.2%.
3/5/2013 ( Avv. Pier Luigi Cantini )