ltaly: Tax burden on ownership of real estate doubled
By Dr. Lodovico Comploj, Pichler Dejori Comploj & Partner
In November 2011, the risk premium on Italian government bonds climbed to an almost intolerable level, crippling the Italian national budget. One of the first measures adopted by the newly appointed technocratic government was the introduction of the D.L201/2011 (known as the "Rescue Italy Decree") to reform the State budget. This decree also included the introduction in 2012 of the "IMU" (municipal tax on the ownership of real estate), which replaced the "ICI", the former property tax on real estate.
The introduction of the IMU was a quick and easy way for the Italian State to access the necessary resources to reform its budget. Unlike the ICI, the IMU has meant that the base tax has been increased and higher tax rates have been applied in general. As a result of these amendments, taxation on real estate ownership has more than doubled compared with 2011 ICI figures.
The introduction of the IMU came as an unpleasant surprise to property investors. Without warning, returns on and market values of their real estate Investments immediately and unexpectedly plummeted. It is hoped that a new government can make the most of the current situation to reduce the impact of the tax burden that property owners are currently experiencing.
Dr. Lodovico Comploj, Partner
Pichler Dejori Comploj & Partner, Bolzano, Italy
T: +39 0471 288333
Dr. Lodovico Comploj is a partner at Pichler Dejori Comploj & Partner, specialists in real estate, photovoltaic, international taxation and corporate law.