Despite the objections of the OSCE and the EU, Italian Prime Minister Enrico Letta, following the pre-election promises, adopted a resolution on the abolition of the unpopular primary residences tax (IMU), reports ee24.com citing globalpropertyguide.com.
Council Tax IMU is calculated based on the value of the property, recorded in the Land Register. It was introduced by the Italian government during the euro crisis. IMU has been criticized for its excessive size and lack of justice, because it does not reflect the location of the object and the income of the owner, and is relied only on the area of the building.
OSCE and the EU believe that instead of canceling IMU Italy had to reduce payroll and investment taxation. Olli Rehn, Economic and Monetary Affairs Commissioner, recommended Italy to transfer the tax burden from the production on the property and consumption, but his words were not heeded.
Italy commits to comply with its obligations to hold the budget deficit not higher than 3% of GDP. To do this, the government is cutting costs, selling off state assets and introduces an additional tax on gambling.
The new single service tax will also be introduced. It will include all fees charged at the cities and municipalities level. This will help to cover the cost of running public services. The tax will be collected at the federal level, but regional authorities will be able to establish its size and appliance.
Unlike the IMU the new tax would affect not the owner of the building, but its occupants. Since the next year foreigners living in rented accommodation will have to pay this tax on their own.