Last Tuesday, Prime Minister Silvio Berlusconi announced he would be carrying through his campaign pledge to eliminate the main Italian property tax at the first meeting of his new government. So is this a good time to take a bet on Italian property?

The principal Italian property tax (ICI) will cost a lot of money if it is abolished – it is estimated that around 2 billion Euros will be lost. Sceptics claim that if Berlusconi is intending to put all of his pre-election pledges through, he will require 63 billion Euros to fund them all and promises are all well and good, but finding the money will be a lot harder.

However, the news still looks promising for foreign property investors looking at property in Italy – fees and taxes are a large part of any overseas property investment therefore the abolition of any of these will make a significant different to property purchasing in the country. There is already no capital gains tax on Italian properties if they are owned for more than five years, therefore if Berlusconi does go ahead with his pledge, there is even more incentive for people to buy in Italy, and this in turn could help push property prices up. So, taking a punt and investing in Italian property now may give you a good return on your investment in a relatively short period of time.

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