Adjustment of annuities Tax deemed unfair, also proposed changes to make the tax levy on real estate progressive based on income.
10/01/2013 – The IMU seems unfair to the European Union because the levy on properties is based on their cadastral value and not on the market value.
In the document on employment and social developments relating to 2012, the European Commission states that the updating of the tax, based on the market value of the buildings, would increase the progressivity of the Imu, reducing inequalities between the owners of real estate more or less well off.
But not only. As stated in the text, in Italy there is no tax deductibility. An element that does not affect the reduction of inequality and that could cause an increase for taxpayers.
On the other hand, the EU report specifies, the setting of the Imu includes aspects of equity, such as the deduction of 200 euros recognized to the first home, the additional bonus of 50 euros for each dependent child, cohabitant and age under twenty-six, and the differentiation of the tax levy, which increases for second homes and properties other than the main home.
Despite this, according to the European Commission, the situation could be improved by providing deductions based on income and updating the cadastral values. According to the EU, applying a multiplier to the cadastral income for calculating the Imu means creating a proportional and not progressive increase.
Considerations of which Italy is aware, so much so that the Monti government had begun to work on the adjustment of cadastral income as part of the tax delegation. The measure, however, remained a dead letter due to the resignation of the Executive.
The reactions and clarifications of the EU adjustment of cadastral rents
For Paolo Guzzetti, president of Acne, the national association of building builders, “the iniquity of the current IMU approach finally emerges with force, which affects families indiscriminately and has contributed to the fall of the real estate sector”. Guzzetti said he shared the need to review the tax in the light of greater equity and progressivity thanks to an action on cadastral income.
The president of Confedilizia Corrado Sforza Fogliani is more critical. He is convinced that the tax must be related to the services provided by local authorities, as in Europe, where the tax is also paid by tenants. For Sforza Fogliani, “the progressiveness of the IMU or real estate assets added to the progressiveness of the personal income tax means aiming not at equity, but at the surreptitious expropriation of those who have invested in one sector rather than another”.
Laszlo Ander, specified that “the IMU” has no negative impact on poverty or on the distribution of income “. According to Todd, the European Union report “simply says that the tax reform could have a more progressive impact on the distribution of revenues if it were disconnected from theoretical cadastral values and linked to market values”.
The position of former Prime Minister Mario Monti is similar, according to whom “the EU’s observations must be put in the right perspective”. Monti stressed that the IMU was introduced at the suggestion of the European Union to reduce the favorable tax treatment reserved for homes. He added that there may be various aspects for improvement, such as a greater allocation of revenue to the municipalities.