First Home Taxes

Who can take advantage of the tax

The tax relief is available to natural persons, even if they are of foreign citizenship. It is not due, as such, to companies, entities or other entities other than natural persons.

The tax relief may concern:

• full ownership;

• bare ownership;

• usufruct;

• use;

• right of residence;

• a share of co-ownership of the property.

The use of the benefit must result from the declarations made in the deed of purchase. In the case of purchase by more than one person, each buyer must independently meet the requirements, unless the benefit is only due pro rata. First home benefits: subjective requirementsUnder 36 tax relief for first home register: objective requirements

2. Eligible properties

Residential properties classified or classifiable in the following cadastral categories are eligible:

On the other hand, the following are excluded:

• A/1, stately homes;

• A/8, dwellings in villas;

• A/9, castles and palaces of eminent historical or artistic value.

The cadastral category A/10, relating to offices and private studios, is not a home and cannot benefit from the "first home" subsidy. Circular no. 15/E of 2023 Circular no. 19/E of 2020

The subsidy may also be due for a property under construction, provided that, on the basis of objective elements, the unit is intended to become a house suitable for meeting housing needs. Circular no. 19/E of 2020

3. Residence requirements

The property must be located:

1. in the municipality where the buyer already resides; or

2. in the municipality where the buyer will establish his residence within 18 months of the purchase; or

3. in the municipality where the buyer carries out his business.

The declaration of intention to transfer residence within 18 months must be made in the deed of purchase.

The requirement concerns the municipality, not necessarily the address of the property. Therefore, it is not necessary to live in the purchased house, as long as the residence is established in the municipality provided for by law, except for the additional conditions applicable to the different cases. First home benefits at the test of the prior cross-examination First home benefit: premise

Special categories

The residence requirement may not be required in some specific cases, including:

• Italian citizens who have emigrated abroad, for the purchase of their first home on Italian territory;

• some cases concerning residents abroad;

• repurchase of another home in certain cases of sale within five years.

For residents abroad, the Revenue Agency has clarified that the requirement of residence in the municipality of the property may not be required, but the other requirements provided for in Note II-bis remain necessary. Circular no. 3/E of 2024

4. Absence of another home in the same municipality

The buyer must declare that he or she is not the exclusive owner, or in common with his or her spouse, of the rights of:

• ownership;

• usufruct;

• use;

• dwelling,

on another dwelling located in the territory of the municipality where the property to be purchased is located.

The verification is based on the ownership of real rights and not only on the actual use of the property. Consequently, the fact that the other home is rented, not used or occupied by third parties does not necessarily eliminate the obstructive effect of possession. Ruling no. 378 of 2019

Bare ownership must be assessed separately. In general, bare ownership of a property in the same municipality may not be an obstacle when it has been purchased without concessions and does not allow the current enjoyment of the home, while the cause of purchase and the concrete legal situation must be carefully examined. First home benefits: subjective requirements

5. Lack of possession of another home purchased with "first home" benefitsThe

buyer must declare that he does not own, not even by shares and even under the legal community regime, throughout the national territory, the rights of:

• ownership;

• usufruct;

• use;

• dwelling;

• bare ownership,

on another dwelling purchased by the same person or by the spouse using the "first home" benefits.

The rule also applies when the previous property was purchased only in part with the subsidy or when the subsidized purchase was made by the spouse, within the limits provided for by the regulations. First home benefits: subjective requirements

6. Purchase of a new home before the sale of the previous

It is possible to buy a new home with the "first home" benefit even when the buyer already owns a house purchased with the same benefit.

In this case, the property already owned must be sold within two years from the date of the new purchase, according to the amendment introduced by the 2025 Budget Law.

The previous regulation provided for a term of one year; the term has been extended to two years for purchases made within the time regime provided for by the new provision. The sale may also concern a share, when the concrete situation and the share owned allow the obstacle to be removed. MB27 2G - News on real estate transfers and tax and construction deductions Ruling no. 551 of 2021

If the previous home is not sold within the applicable deadline, the benefit enjoyed on the new purchase is forfeited, with recovery of the higher tax, penalties and interest.

7. Declarations to be made in the deed

To obtain the benefit, the buyer must make declarations in the deed of purchase relating to:

• location of the property;

• current residence or commitment to transfer within 18 months;

• absence of another home in the same municipality;

• absence of another home purchased with "first home" benefits;

• possible commitment to sell the property already purchased with the benefit within the deadline provided.

The declarations must be formulated correctly and completely. A false declaration can result in the forfeiture of the benefit.

When the requirement is not present in the deed, the possibility of correcting the omission must be assessed in relation to the nature of the missing declaration and the time at which the integration takes place. It is not prudent to consider every omission automatically remediable by means of a simple subsequent declaration. Requirements for the first home benefit

8. Applicable taxes

8.1 Purchase from a private individual or a company not subject to VAT

When the purchase is subject to registration tax, the following normally apply:

The proportional registration tax is subject to the minimum amount provided for by the general regulations on registration tax.

The registration tax can be calculated, when the conditions are met, on the cadastral value by means of the price-value mechanism. In this case, the taxable amount does not necessarily coincide with the price declared in the contract.

8.2 Purchase from a business with VAT

When the supply is subject to VAT, the following normally apply:

The 4% VAT must be applied by the seller when both the objective conditions of the subsidized home and the subjective requirements of the buyer are present.

VAT taxation may operate, in particular, in the supplies made by the construction or renovation company in the cases provided for by the legislation, as well as in cases where the selling company exercises the option for taxation. First home tax relief: main features of the tax relief regimeMB25 11G - VAT rates in the real estate sector

9. Purchase of appurtenances

The tax relief also applies to the appurtenances of the home purchased with the "first home" benefits, provided that there is an effective and lasting appurtenant relationship.

Properties classified or classifiable in the following categories are eligible for the facilitation, within the limit of one appurtenance for each category:

• warehouses and storage rooms;

• C/6: stables, stables, sheds and garages;

• C/7: closed or open canopies.

It is therefore possible to facilitate, in general:

• a C/2 appurtenance;

• a C/6 appurtenance;

• an appurtenance C/7.

The limit operates by cadastral category. Two appurtenances belonging to the same category cannot both benefit from the facilitation, even if both are subservient to the dwelling. The application of the first home subsidy in relation to the appurtenances of the dwelling First home subsidy: premise

The appurtenance can be purchased at the same time as the dwelling or with a separate deed, provided that the substantive and formal requirements are met. The subsidy does not automatically extend to properties belonging to categories other than C/2, C/6 and C/7. The application of the first home subsidy in relation to the appurtenances of the dwelling

10. Forfeiture of the subsidy

Forfeiture can occur mainly in the following cases:

1. false declarations made in the deed;

2. failure to transfer residence to the Municipality within 18 months, when the transfer had been declared;

3. failure to sell the pre-owned property within the deadline provided for in the event of a new purchase;

4. transfer of the property purchased with the subsidy before the end of five years, unless repurchased under the terms of another home to be used as one's main residence.

The intra-five-year sale includes, in general, both the transfer for consideration and the transfer free of charge, therefore also the donation. First home benefits at the test of the prior cross-examination First home tax relief: premise

Consequences of forfeiture In the

event of forfeiture,

• the difference between the ordinary tax and the subsidized tax paid

is due;

• mortgage and cadastral taxes in the ordinary amount, when due;

• a penalty equal to 30% of the higher taxes;

• interest on late payments.

Forfeiture does not normally determine the civil invalidity of the deed of sale, but produces tax consequences for the taxpayer. First home benefits to the test of the preventive cross-examination

11. Sale within five years and repurchase within one year

The sale of the subsidized property before five years have elapsed from the purchase usually involves forfeiture.

Forfeiture can be avoided if, within one year of the sale, the taxpayer buys another property to be used as his main residence.

The new purchase must concern a residential property; the purchase of the appurtenance alone, for example a garage, is not sufficient to avoid forfeiture. Resolution no. 30/E of 2008

The repurchase must be effective and must comply with the conditions required by the legislation. In some special cases, a purchase abroad may also be relevant, provided that the residential destination and habitual residence can be verified through appropriate documentation and administrative cooperation tools. Ruling no. 126 of 2021 Ruling no. 65 of 2020

Repurchase of land

The simple purchase of building land is not, in general, sufficient to avoid forfeiture.

When the taxpayer purchases land with the aim of building the new home, the building must have come into existence in its essential structural elements within the annual period. The land alone, without the actual construction of the dwelling within the deadline, does not automatically allow the benefit to be retained. Ruling no. 29 of 2025

12. Tax credit for repurchase

The tax credit is due to the taxpayer who:

1. sells a home purchased with the "first home" subsidy;

2. purchases, within the deadline, another home with the "first home" requirements;

3. complies with the conditions of the subsidized discipline.

The amount of the credit is equal to the

• lesser of: the registration tax or VAT paid on the previous subsidized purchase;

• the registration tax or VAT due on the new subsidized purchase.

The credit cannot therefore exceed the tax due on the new purchase. Circular no. 24/E of 2022

Use of the credit

The credit can be used:

• in reduction of the registration tax due on the new purchase;

• in reduction of registration, mortgage and cadastral taxes due for subsequent deeds;

• in reduction of inheritance and gift tax;

• in the tax return, in reduction of IRPEF;

• in compensation by means of the F24 form, in the cases and according to the procedures provided.

The credit must be indicated in the deed of purchase when it is used directly to reduce the registration tax of the new purchase. Alternatively, it can be used in the tax return or in compensation, respecting the relevant documentation. Order of 2009-01-31 (031aa409-daea-d6ef-4e33-05b0d655c90a) CR FRAMEWORK (MOD. PF) TAX CREDITS

The credit is personal and, in the case of joint purchase, must be determined in relation to the share and the tax actually attributable to the individual buyer. Circular no. 19/E of 2020

The sale and repurchase of appurtenances only, such as two garages, do not generate the tax credit provided for the repurchase of the dwelling house. Circular no. 24/E of 2022

13. Inheritances and donations

The "first home" tax relief can also operate in transfers deriving from:

• inheritance;

• donation.

In these cases, the tax relief mainly concerns mortgage and cadastral taxes, which can be applied in a fixed amount when the requirements and conditions for the purchase of the first home are met.

The reference is Article 69, paragraph 3, of Law No. 342 of 21 November 2000. The discipline does not entirely coincide with that of purchases for consideration, because registration tax and inheritance and gift tax follow their own rules. Circular no. 3/E of 2024Ruling no. 551 of 2021

The ownership of a property received by inheritance or donation must be assessed for

• the purposes of: the possible possession of another home in the same municipality;

• the previous use of "first home" benefits;

• the possibility of using the alienation mechanism within the deadline set for the new purchase.

14. Mortgage for the purchase of the first home

The purchase of the home and the bank loan are fiscally distinct transactions.

For the mortgage intended for the purchase of the main residence, the following may be relevant

• : the substitute tax on the loan;

• the deduction of interest expenses;

• the use of the property as a main residence;

• the subjective requirements of the borrower;

• the date of stipulation of the loan and the regulations in force at that time.

The deduction of interest expenses on the mortgage does not coincide with the "first home" benefit relating to indirect taxes on the purchase. For the deduction, it is necessary to independently check the requirements of the main residence and the tax conditions of the mortgage.

15. "First home" benefit for under 36s

The special benefit provided for by Article 64 of Decree-Law no. 73/2021 was intended for individuals who:

• had not reached the age of 36 in the year of stipulation;

• had an ISEE not exceeding 40,000 euros;

• purchased a home not belonging to categories A/1, A/8 or A/9.

For deeds subject to registration tax, there was an exemption from registration, mortgage and cadastral tax; for purchases subject to VAT, a tax credit equal to the VAT paid was provided. Mortgage first home tax relief: under 36 First home tax relief under 36: exemption from registration tax

The measure had a specific time duration and should not be confused with the ordinary "first home" tax relief, which continues to be governed by Note II-bis of Presidential Decree no. 131/1986. Under 36 tax relief for first home registration: general regulations

16. Main regulatory