First Home Facility: The Tax Agency Clarifies the Requirements for Repurchasers Abroad

Rome, February 13, 2025 - The Tax Agency, with the Response n. 29/2025, has provided important clarifications on the conditions for maintaining the tax benefits of the first home in case of sale infra-five years and subsequent repurchase of a property abroad.

According to the current legislation, anyone who buys a home with the "first home" benefit and sells it before five years without repurchasing another property for residential use within one year forfeits the benefit and must pay ordinary taxes, with penalties and interest. However, the taxpayer can avoid this decadence by purchasing another property to be used as a habitual residence within one year (from 2025, the term has been extended to 2 years). 

The specific case

The request for questioning was submitted by an Italian citizen living abroad and registered with AIRE, who in 2020 had bought a house in Italy benefiting from tax benefits. In July 2024, before the end of the five-year period, he sold it and expressed his intention to buy building land in another state to build a house there as his main residence.

The applicant asked whether this operation would allow to keep the tax benefits already enjoyed, avoiding the decadence from the first home benefit.

The Tax Agency’s Response

The Agency has confirmed that, even in the case of a repurchase of building land abroad, the taxpayer can avoid the lapse provided that:

1. The purchase of the land takes place within one year from the sale of the property in Italy.

2. A new main dwelling is built, which must be existing at least in its essential structural aspects (perimeter walls and roof).

3. The property is actually used as a habitual residence, which can be demonstrated through appropriate documentation.

The Agency has stressed that it is not enough to buy the land within one year, but it is essential that, by the same time, the construction is started and the building has a minimum conformation recognizable as a dwelling. This criterion, already clarified in previous resolutions (such as 44/E of 2004), ensures that the tax benefit is intended for those who actually reinvest in a new home and not for speculative transactions.

Documentation Required

To demonstrate compliance with the conditions required, the taxpayer must submit to the Tax Agency:

• Notarial deed of purchase of the land with indication of the residential use.

• Building permits and construction project, issued by local authorities.

• Certificate of progress, attesting at least the existence of the cottage with roof.

• Proof of housing use, such as instantly charged water, electricity or gas bills.

• Urban certification of the land, to confirm that it is actually buildable.

All documents issued by foreign authorities must be translated into Italian and apostilled in accordance with the 1961 Hague Convention.

Tax implications and controls

The Tax Agency has clarified that the sending of the documentation does not preclude any verification, reserving the right to verify the real existence of the property and its residential use. In addition, it will be able to use international administrative cooperation instruments such as the 1988 Strasbourg Convention to obtain information from the tax authorities of a foreign country.

This interpretation is a confirmation of the orientation of the Financial Administration, which aims to preserve the first home benefit only for those who actually reinvest in a new main residence. 

This question has summarized the answers to three previous questions, each of which addressed specific issues related to the purchase of real estate in Italy and abroad: the first concerned the possibility of buying another home abroad after having already taken advantage of the benefits for the first house in Italy; the second concerned the purchase of land in Italy, Intended for the construction of a house that would be qualified as a first home; finally, the third one considered the case of the purchase of land abroad on which to build a house destined to become the first home.

The clarification is particularly relevant for Italians living abroad, who often sell real estate in Italy to buy houses in their countries of residence. However, in order to maintain the tax advantage, it will be essential to comply with the conditions and to document the entire transaction accurately.