Start Date
28-11-1988 12:30 PM
End Date
28-11-1988 2:30 PM
Description
This paper focuses on the close connection between producing an equitable and efficient system of property taxation while at the same time restoring greater power and responsibility to sub-national governments. It proceeds from the premise that the tax on immovable property is particularly suitable as a local tax and that "an old tax is a good tax" . Italy has a strongly centralized fiscal system with nearly all taxing power and responsibilities at the national level. Its fiscal system has been based on taxation of income, and income from immovable property is based on cadastral value. The Italian constitution establishes four levels of government: national, provincial, regional, and commune. Main responsibility for immovable property taxation is at the national level, with some very limited tax powers vested in the communes. The national system taxes property based on income and transfer value. Home ownership runs about 65% and it is encouraged by some benefits hidden within the tax code. The same type benefits are obtained for agricultural land, which for all practical purposes is tax free . The tax on real property transfers falls into three categories: inheritance or gifts, sales, and value added. Communes receive the proceeds from capital gains on real property transfers but all administrative responsibility is at the national level. Liability lies with the seller or the heir. The present system of taxes on immovable property is considered inequitable and inefficient. A 1981 government White Paper recommended greater local government responsibility in property taxation, with either a special tax on income or capital values of immovable property. This matter is still under discussion and no effective action has been taken. Italy is like many other countries in that the tax system is hotly debated and discussion is often substituted for decision.
Publication Date
November 1988
Recommended Citation
Rey, Mario, "Taxation on immovable property in Italy: The present situation and proposals of reform" (1988). International Research Symposium. 23.
https://researchexchange.iaao.org/irs/irs88/sessions/23
Taxation on immovable property in Italy: The present situation and proposals of reform
This paper focuses on the close connection between producing an equitable and efficient system of property taxation while at the same time restoring greater power and responsibility to sub-national governments. It proceeds from the premise that the tax on immovable property is particularly suitable as a local tax and that "an old tax is a good tax" . Italy has a strongly centralized fiscal system with nearly all taxing power and responsibilities at the national level. Its fiscal system has been based on taxation of income, and income from immovable property is based on cadastral value. The Italian constitution establishes four levels of government: national, provincial, regional, and commune. Main responsibility for immovable property taxation is at the national level, with some very limited tax powers vested in the communes. The national system taxes property based on income and transfer value. Home ownership runs about 65% and it is encouraged by some benefits hidden within the tax code. The same type benefits are obtained for agricultural land, which for all practical purposes is tax free . The tax on real property transfers falls into three categories: inheritance or gifts, sales, and value added. Communes receive the proceeds from capital gains on real property transfers but all administrative responsibility is at the national level. Liability lies with the seller or the heir. The present system of taxes on immovable property is considered inequitable and inefficient. A 1981 government White Paper recommended greater local government responsibility in property taxation, with either a special tax on income or capital values of immovable property. This matter is still under discussion and no effective action has been taken. Italy is like many other countries in that the tax system is hotly debated and discussion is often substituted for decision.