The tax rules on buying a home in Italy are fairly detailed, and anyone about to buy would do well to know them.
Those buying a residential home to use as their own residence for the first time are at an advantage, thanks to the possibility of dedicated tax conditions.
The requirements to obtain the benefits are as follows:
- the property being bought must not fall into the luxury categories (A/1, A/8, A/9);
- it is the first property you intend to buy, located in the municipality where you have, or intend to transfer, your residence;
- in the municipality where the property is located you hold no other right — not even co-ownership with your spouse — of ownership, usufruct, use or habitation of another home;
- you are not the owner, not even for a share with your spouse, of another property anywhere in the country for which you have already used the first-home reliefs;
- you undertake to transfer your residence to the municipality where the property is located within 18 months of the deed.
Please note: don’t confuse the “first home” with the “main residence”. The latter is simply the principal home where the buyer lives permanently with their household. In fact, the law does not prevent the “first home” — to which the buyer has transferred their residence to obtain the tax benefits — from being rented out.
Naturally, the benefits also extend to any appurtenances bought with it: cellars, attics, garages, parking spaces or car ports.
The benefits
The relief allows different rates to be applied when calculating the tax, which in turn vary according to whether the seller is a business or a private individual:
- Buying from a builder: for the first-home purchase, VAT is applied at 4% (instead of 10%) on the purchase price.
- Buying from a private seller: the mortgage and cadastral taxes are charged at a fixed €100 each, while the registration tax is paid at 2% instead of 4% on the cadastral value.
A significant difference, then, which helps those approaching the purchase of a home for the first time.
There is also a temporary measure (currently in force) offering further benefits to under-36 buyers, which we cover in a dedicated article. Please note: the tax figures and rates refer to Italian legislation and may change; always confirm the details with a qualified professional.