ROME, April 4 (Reuters) - The slump in Italy's housing market deepened towards the end of 2012, data showed, reflecting the extension of a property tax and declining purchasing power in a stagnant economy.
House prices fell 1.5 percent in the fourth quarter from the third and were down 4.6 percent from the same period of 2011, statistics office ISTAT said on Thursday.
The annual figure was the steepest over a quarter recorded last year, when house prices fell 2.7 percent on average. They had risen 0.8 percent in 2011.
After coming to power in November 2011, outgoing Prime Minister Mario Monti extended the IMU annual property tax to principal residences, which were previously exempt, a move critics say has contributed to the slump.
The tax on primary residences was a campaign theme in Italy's February elections, with former premier Silvio Berlusconi promising to abolish it and reimburse what had already been paid.
The steady fall in house prices is also a symptom of the austerity-driven combination of higher taxes and below-inflation wage settlements that has eaten into consumer spending.
According to ISTAT, some 72 percent of Italian families live in homes they own.
(Reporting By Catherine Hornby; Editing by John Stonestreet) Keywords: ITALY HOUSEPRICES/
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