Rome: Luciano Di Pardo, a lawyer in Milan, is dodging Italian Prime Minister Mario Monti's new real estate tax.

"I didn't pay it," Di Pardo said of the levy that was the centerpiece of Monti's austerity budget. "I get that we are on the edge of failure and disaster, but you can't keep taking from ordinary people."

The new levy, which should have cost Di Pardo about 500 euros ($630) when the first payment was due on June 18, may mark the limit of how much Monti can squeeze out of taxpayers. The belt-tightening is also sinking the prospects of Monti's supporters in parliament and deepening Italy's fourth recession since 2001.

Italy's main political parties, which agreed to suspend their rivalries and back the unelected Monti when he was appointed in November, have seen their support plummet to the lowest in about two decades. Soured voters like Di Pardo are turning to Beppe Grillo, the comic-turned-politician, who called the euro an "ever-tightening noose" and urged policy makers to consider default.

The austerity has boosted Monti's prestige as a deficit fighter outside of Italy and conferred credibility on his call for bolder European measures to spur growth.

The more than 10 billion euros expected to be raised this year from the tax known as IMU accounted for more than a third of the revenue measures in the budget Monti pushed through in December to protect the third-biggest euro economy from the financial crisis that claimed Spain this month.

The IMU reinstates tax on first homes, a charge that was terminated four years ago when former Prime Minister Silvio Berlusconi made Italy one of the only large euro-region countries without such a levy. It also raises the fee on commercial holdings and vacation properties, and scraps deductions for landlords who offer rents below market rates.

"Taxing primary residences is profoundly unfair," said Rossella Ronconi, a 54-year-old who works for a tourism promoter and owns an apartment in Rome. "It should be an inalienable right."

The IMU is deepening resentments because it relies on an out-of-date public register that understates the value of the oldest and priciest homes in city centres, according to ASPPI, an association of property owners. Those with moderate incomes are also hurt by the elimination of incentives for rent- controlled leases, said Luca Dondi, head of real estate at Bologna-based economic-research firm Nomisma SpA.

Favouring wealthy

"The methodology, let's put it this way, is not fair," said ASPPI President Alfredo Zagatti. "It favours people in wealthier areas."

Under IMU, the government set rates of 0.4 per cent of registered value for primary residences and 0.76 per cent for second homes and certain classes of commercial real estate. Municipalities may add as much as 20 basis points to the primary home rate and 30 basis points for second homes to boost their local budgets. A basis point is one-hundredth of a percent.

"It's not a huge amount," said Dario Castiglia, chief executive officer of real estate broker RE/MAX Italia, which has about 200 agencies in Italy. "It's just that Italians were used to not having any taxes for three years, and also it's hitting home right when we're in the middle of perhaps one of the worst recessions in decades."

Home sales fell the most in eight years in the first quarter. Italy's economic growth has lagged the euro-area average for more than a decade and will contract 1.4 per cent this year, according to a forecast by the European Commission.

Di Pardo, the Milan lawyer, faces a second IMU instalment of at least 500 euros on his Milan home later this year and said he may eventually pay his full dues, with the required late fees. Still, he has a message for Monti.

"I'm not convinced I'll pay," Di Pardo said. "I want to do what I can against this unfair tax."