Justifiably unpopular? The Italian property tax and inequality

Abstract

ABSTRACT This article simulates the distributional implications of a property tax reform for Italy that updates the cadastral valuation system to reflect market value. Simulations suggest that such a reform would significantly improve the progressivity of the tax, while correcting the unfairness of paying higher effective tax rates on properties with a lower market value. Updating the valuation system also makes the property tax less distortive, as the same revenue could be collected at about one-third of the current statutory tax rates.