Italian Council Tax (Imposta Unica Comunale – IUC) in its three components, IMU (Imposta Municipale Propria), TASI (Tributo per i servizi indivisibili ) and TARI (Tassa rifiuti),  was due, its second annual deadline, on the 16th December 2016.

As a general introduction, IMU tax is a general council tax due by owners of buildings (Fabbricati), land with development potential (Aree fabbricabili) and farmland (Terreni agricoli) in Italy. The rate of tax can range between 0.46 % and 1.06 % of the statutory value of a property, as defined in the local regulations. Usually, the taxpayer`s main residence (Abitazione principale) is exempted.

TASI on the other hand is intended as a fiscal contribution towards the costs of  indivisible services provided by local authorities. It is due by owners / occupiers of buildings and land with development potential in the relevant district and is usually levied at the rate of 0.1%.

Italian Council Tax is levied in accordance with regulations issued by local authorities (Comuni). Under the national legislation framework, such regulations were to be issued by the 30th April 2016 and to be published on the website of the Italian Treasury (www.Finanze.it) by the 28th October 2016. Where this has not happened, the earlier 2015

regulations, for the relevant Italian local authority / district will continue to apply.

The main innovation in 2016 was that the inexorable increase of this tax, at least in its IMU and TASI components has been stopped in its tracks. Under national legislation issued in 2015 no further local taxes increases, are allowed. Where any local regulation purports to increase IMU or TASI above the 2015 it is automatically unenforceable. The

A view of historical Castel Sant Angelo in Rome

Castel Sant Angelo, Rome

challenge for the taxpayer and his advisers was to establish which local regulations were actually applicable, even before starting to work out the amount of local council tax due and organising payment. In any case, any alleged Italian council tax increases should be viewed with considerable suspicion.

Other novelties related to the 2016 TASI tax exemption of taxpayers` main residences, and the exemption of farmland in mountain districts and in small island from IMU.

Recent legislation also introduced a 50% tax rebate on local taxes levied on properties occupied under a free licence by the taxpayer`s family (Comodato ai parenti in linea retta) and a 25% rebate on residential accommodation let at  specially reduced rent (Immobili a canone concordato).

Most of the usual local tax rebates continued to be applicable. Listed buildings (Immobili storici) were only taxed at 50% of the applicable rate. And the same applied to buildings in state of disrepair / or that cannot be used (Immobili inagibili). Collapsed or badly damaged buildings (Fabbricati collabenti) were totally exempted from local taxes.

Unfortunately, second homes, or the properties of foreign owners were taxed at the full rate, except where they were let and the tenant uses the premises as his main residence.

Because of the potentially wide application, the taxpayer`s main home exemption is strictly defined. It also includes related areas (Pertinenze) such as garages and cellars, but with some clearly defined limitations. The main residence of Italian nationals residents abroad was taxed at the normal rate, unless the particular owner was formally “retired” under the legislation of the country of his residence.

The use of these exemptions is frequently connected with the lodging of tax returns / information with the relevant local authorities, so they were not free nor automatic. The assistance of specialised professionals was required.

A few innovations applied to IMU payable by companies and commercial enterprises. The long pending issue of the machinery and equipment permanently fixed to the floor / walls of industrial buildings (Imbullonati) has come to a favourable (for taxpayers) conclusion. The value of such machinery and equipment will no longer considered in assessing the value of industrial buildings (class “D”) on which IMU is levied.

No IMU was payable on the new buildings held by builders and still to be marketed (Beni merce). A 20% deduction was allowed for the IMU paid by commercial enterprises and professionals. Of course, special deductions applied to farming land held by professional farmers (Imprenditori agricoli professionali – IAP).

As for the past, Italian council tax continued to be payable only from an Italian bank (using form F24) or an Italian post office. This restriction and the technical complexities of the relevant local regulations required the assistance of local professionals, for most foreign Italian property owners.

When all these innovations are considered, it is going to be quite a change.

For once, local taxes are not going to increase this year and probably not even next year.

Good News !

Earlier posts on IMU tax on this website:

1) The new Italian Council Tax: “IMU” (08.07.2012)

 

Dr Claudio Del Giudice – Copyrights reserved