November 30, 2012 / 9:16 AM / 5 years ago

Italian centre left aims to shift property tax burden

ROME, Nov 30 (Reuters) - The next Italian government should reduce a highly unpopular housing tax and make up the shortfall with a levy on larger real estate investments, the likely centre-left candidate in next year's election said on Friday.

Pier Luigi Bersani, head of the Democratic Party (PD), the largest centre-left force, said he favoured lowering the "IMU" tax on principal residences and balancing the cut with a special personal tax on larger property investments.

He mentioned as a possible threshold for the new tax 1 million euros ($1.3 million), the price of a reasonably large flat in central Rome.

"It's something we can discuss. We'll have to see what the conditions are and how much we want to cut by, but it will be a significant level, I'm not talking about poor people," Bersani told Canale 5 television.

Bersani is the favourite to win a primary election on Sunday against his younger centre-left rival Matteo Renzi and, with the PD leading in opinion polls, would be in pole position to head the next government after the election, likely in March.

He has said repeatedly that he will stick to the budget commitments Prime Minister Mario Monti has made to Italy's European partners but will seek to soften the impact on workers and the poor.

Monti's technocrat government extended IMU, from which principal residences were previously exempt, as part of a package of emergency budget measures introduced when it took power at the height of the financial crisis last year.

The tax has been one of the most unpopular measures introduced by the government but is expected to raise some 20 billion euros this year and is a central part of deficit-reduction efforts.

Bersani also said that efforts needed to be stepped up to make financial investments easier for tax authorities to trace and called for a reduction in the maximum threshold for cash transactions to fight tax evasion.

Monti's government has already reduced the maximum sum which can be paid in cash to 1,000 euros and Bersani said that level should be gradually lowered to 300 euros.

$1 = 0.7705 euros Reporting by James Mackenzie; Editing by Robin Pomeroy

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