Out with the IMU in with Service Tax

In recent years the housing tax situation in Italy has been a little confusing to say the least. Now with the introduction of the new “Service Tax” the hope is this one tax will cover all taxes payable to the local authorities.

The generic term “Service Tax” basically replaces the IMU Tax and the TARES for first home owners, probably in the hope of bringing Italy in line with The UK, Ireland and America.

To date, payments due for principle residences have been cancelled for September and December 2013. There will probably be much shaping and tweaking of the details of the Service Tax before finalising of the details in October. The new tax will come into effect early in 2014. The new “Service Tax” consists of two components.

• The Payment of TARES (disposal of municipal solid waste tax) will now be subsumed into the “Service Tax” a component entitled TARI which will cover the management of municipal waste, this tax will be calculated according to the size of the property. Tax will vary from comune to comune with some flexibility.
• The second component TASI which is also part of the Service Tax covers payment of municipal services. This must be paid by those who occupy housing or produce waste, shops for example. It is payable by both the owner of the property and the occupant (shared between them). The theory being that local public services contribute to the market value of the property and the occupant in turn benefits the local services. At this stage it is unclear whether the tax will be based on the cadastral value of the property or the surface area, each municipality has the freedom to decide this, there will also be an upper taxation limit put in place but each Comune will be given a degree of freedom in setting the rates.

Letta’s government intends to implement this Tax on the 1st of January 2014 and the promise is that it is more maneuverable , more progressive and therefore, fairer and lighter than IMU. For those still not clear, the IMU has been abolished only for those owning a prima casa, where you are registered with the Comune as a resident and live there habitually. Unfortunately this does exclude a large number of Italian home owners who have a holiday home or second home in Italy. If you have any doubts as to the classification of your home or whether you should be paying IMU or Service Tax you can contact us here at Retiring to Italy and we will be happy to advise you.