OFFICIAL: IMU tax abolished by Italian bureaucracy | "We've taken enough money from you": municipalities surrender.

Potential major changes for thousands of Italians grappling with this tedious municipal tax. What you need to know.

Italy remains one of the European countries with the highest tax burden . In 2024, with a tax burden reaching 42.8% of GDP, Italy ranked third among OECD countries, almost 9% above the average. Only France and Denmark have higher rates , highlighting a situation that profoundly impacts the national economy.

The Italian tax system is based on various sources of revenue. Among the main ones are social security contributions, income taxes , and VAT. Personal income tax (IRPEF) is a prime example of progressivity, with rates starting at 23% and reaching up to 43% for higher incomes.

The comparison with other countries is significant. Countries like Ireland stand out for their significantly lower tax burden , around 21.8% of GDP, and more attractive tax policies for businesses. Romania and Malta also have less onerous tax systems , ranking below the European average and thus offering a more competitive environment.

High taxation in Italy has a direct impact on citizens' purchasing power and the competitiveness of businesses. Although this revenue finances public services, many believe that the quality and efficiency of these services do not justify such a heavy tax burden.

Tax evasion and IMU

The high tax burden is profoundly affected by tax evasion , a phenomenon that drains tens of billions of euros from state coffers each year. Although progress has been made, tax evasion has a significant impact on GDP.

The IMU ( Unified Municipal Tax ) is an annual property tax levied on property ownership such as houses, land, and building plots. The calculation is based on the property's cadastral value , to which rates established by individual municipalities are applied. The taxable base is obtained by revaluing the cadastral income and multiplying it by specific coefficients.

Exemption from IMU payment

Recently, a new interpretation of the law has allowed spouses or civil partners to obtain a double IMU exemption on two different residences. The Constitutional Court declared unconstitutional the rule that tied the exemption to the residence of the entire family unit in the same property. This decision marked a significant shift, granting greater autonomy to individual taxpayers.

Subsequently, the Court of Cassation reaffirmed this principle, confirming that each spouse is entitled to the exemption on their own home , even if it's located in a different municipality. The fundamental requirement to benefit from the relief is that each owner have their own registered residence and habitual abode in the property. On social media, someone wrote, "It seems like between the lines you can read, 'We've taken enough money from you,'" a classic internet joke.