Fiscal inequality and social (in)justice: evidence from the real estate market in Turin | [Iniquità fiscale e (in)giustizia sociale: evidenze dal mercato immobiliare a Torino]

The Italian government cyclically debates the critical issues related to property taxation, which for many years needs to be reformed due to the high fiscal inequality level that currently generates. This paper aims to analyze Italian fiscal inequality by exploring its spread within different urban zones of a city. A three-step methodological approach is proposed and applied to the city of Turin in the northern part of Italy. An extensive data sampling from 2021 real estate advertisements provides the basis for calculating cadastral values and four innovative fiscal inequality indicators. Descriptive statistics and spatial analyses are performed to study the relations between property prices and cadastral values, as well as to highlight the fiscal inequality level in relation to the real estate market. Findings show that current cadastral values are not related to property prices and that the fiscal inequality level is significant in most of the analyzed urban zones. These criticalities are due to a series of issues that confirm the urgency of the Italian Cadastre reform for its important consequences on property taxation. Particular attention is paid to the attribution, often incorrect, of the cadastral categories, and the possibility of redefining the property tax rates for calculating the IMU tax. Results, in fact, highlight that a random relationship between property tax rates and property prices exists and confirm that redistributive policies are necessary in the Italian context. The results of this research can be shared and discussed with the Agenzia delle Entrate and local authorities to be used to debate the territorial polarization between weak, degraded urban zones with limited services, and prestigious ones. The proposed methodological approach can be further developed and tested in other urban or rural contexts to really support local authorities to reduce the currently high fiscal inequality levels, the territorial and socio-economic injustices and to invest in new urban redevelopment strategies and thus foster territorial welfare.