Will New Tax Affect Italian Luxury Property Market?

27 November 2012 - The Oversees Guides Company

A global research team investigating the international property market concluded that unlike some of the other European countries, Italy's credit crunch was dealt with relatively wisely by the nation's banks although problems arose at a later stage as a result of the deteriorating state of the continent's debt crisis.

The report concluded that it was the luxury real estate market in Italy which helped to keep things afloat and is continuing to do well in terms of sales. It found that the majority of buyers hail from wealthy nations and tended to demonstrate interest in owning multiple residences across the world.

Worry has been expressed over how a new council tax introduced at the end of 2011, which came into force mid-way through 2012, would affect the luxury real estate market - who up until this point, had never been charged a tax on their property.

However, it seems that the impact that it has had on the market is minimal for a couple of reasons. Firstly, the amount that the property owners are being charged is relatively small at just 0.4 per cent of the value of their first property and a rate of 1.06 per cent charged on second homes. Secondly, the tax laws, purchase costs and property charges still make the Italian market more favourable to investors than other European countries like Spain and France.