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Houses devalued by taxes: prices down by 4%

29 December, Il Giornale

Taxation continues killing real estate. Over 2017, in fact, house prices in Italy have registered a decrease of 4%, meaning an average price of 1.819 euro per Sq m, according to Idealista. 85 cities over the 103 surveyed have reported drops in values of two digits, such as Benevento with -18.6% and Varese with -10.1%. Big cities haven’t been spared, as shown by the negative variations of Rome (-4.3%), Milan and Naples (both -3.8%). The reason is taxation: along with the 21.2 billion for Imu and Tasi paid by Italians in 2016, there are also the 5.6 billion euro for Irpef on property and the 2.1 billion for flat tax on rents. If we consider the other miscellaneous taxes for over 9 billion euro for property transfers, the total taxation will exceed 35 billion. It’s clear that such a massive taxation can contribute devaluating real estate assets, considering that a house which is not the first residence and that is not for rental represents a significant cost for families. Government also withdraws a significant percentage from rents, if these are not of the residential type.

“Real estate cannot be saved by the garden benefit”, twits the president of Confedilizia, Giorgio Spaziani Testa, commenting on the year end press conference of the PM Gentiloni concerning “the failed institution of the flat tax for commercial rents, as requested by the majority and the opposition”. According to Vincenzo De Tommaso, from the research centre of Idealista, “the negative trend of house prices started in 2007 is due to the offer surplus”. In 2018, he adds, “there will be a more homogeneous recovery with prices moderately growing in medium and large cities”.

Among the few positive exceptions of 2017, there are some excellent performances registered by Trieste (+6.2%) and Sondrio (+3.8%). The art cities Venice (4,362 euro per Sq m) and Florence (3,434 euro per Sq m) are still the most expensive.

Source: Il Giornale

Translator: Cristina Ambrosi