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Italian Centre-Left Leader Looks At High-End Property Tax

by Ulrika Lomas,, Brussels

05 December 2012

Pier Luigi Bersani, General Secretary of the Democratic Party and newly-elected leader of the Italian centre-left for the forthcoming general election, has suggested that a tax on the property held by the country’s wealthiest citizens could be imposed so as to lighten the burden of the new local property tax (IMU) on first residences.

In a recent television interview, as long as the additional funds were allocated to reduce the incidence of IMU on first residencies, Bersani indicated that he would favor a tax imposed on the value of real estate held by individuals above a threshold of EUR1m (USD1.3m), adding he would be willing to negotiate on where that threshold should be.

In response to the opposition he anticipated to his proposal, the new centre-left leader, who was elected by a large majority on December 2, 2012, stressed that he was not advocating a general wealth tax. He also believed that, as yet, nobody had previously attempted to delineate a threshold for such a tax on property assets.

The possible idea of a general Italian wealth tax had caused a political controversy when raised by Italy’s Premier Mario Monti last month. He had not announced that such a tax would be imposed, but had disclosed that he was not against a 'modest' general tax on assets.

Monti had limited his comments to explaining that the tax-raising measures which his government has taken to date have had to be imposed on incomes and consumption, as it lacked the necessary information on assets held in the country. He had also pointed out that, instead of a general wealth tax, the government had acted where it could on specific assets held by Italy's wealthiest citizens, such as the imposition of a tax on luxury cars, aircraft, helicopters and boat moorings.

Bersani’s proposal could, therefore, be said to be extending the increased taxation on specific assets, by targeting holders of larger properties, where market value information could be more easily obtained.

In addition, with regard to Italian tax evasion, Bersani stated that he was particularly interested in increasing the transparency and traceability of payments, through the government being able to obtain information on movements across bank accounts. Better, he said, to accentuate the government’s action against tax evaders than to increase the burden on those citizens who pay their taxes.

He added that people have to accept that less cash should change hands in the country. He would propose that the present limit of EUR1,000 on cash transactions should be reduced, gradually over time, to EUR300.

TAGS: individuals | compliance | tax | investment | real-estate investment | tax compliance | property tax | real-estate | Italy

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