Italy's property market recovery faces tax hurdle

[MILAN] Plans by the Italian government to preserve a much-hated property tax, albeit under a different name and structure, are likely to hamper the fledgling recovery of the residential property market after six years of contraction.

Sector experts predict housing transactions will increase this year for the first time since 2007, after which the country was hit by the global financial crisis and subsequently by its longest economic recession in 60 years.

But prices are expected to continue to fall, further eroding Italy's private wealth - which is 60 per cent invested in real estate assets - and hitting bank balance sheets.