“First Home” Tax Credit and New Two-Year Deadline for the Disposal of Previously Owned Property: Initial Reflections Following the 2025 Budget Law

With the 2025 Budget Law (Law No. 207 of December 30, 2024), the legislature introduced significant amendments to the favorable tax regime for the purchase of a “first home,” as regulated by paragraph 4-bis of Note II-bis to Article 1 of the Tariff, Part One, of Presidential Decree No. 131 of April 26, 1986. Among the most noteworthy changes is the extension of the deadline for the disposal of the previously owned home from one to two years, which may also impact entitlement to the tax credit granted for the “replacement” of a first home.

The New Regulatory Framework

Article 1, paragraph 116, of Law No. 207/2024 replaces the previous one-year term for the disposal of a home purchased with “first home” benefits in order to qualify for tax relief on a subsequent purchase. The amended paragraph 4-bis of Note II-bis now provides that:

“The 2% rate shall also apply to purchase agreements where the buyer does not meet the requirement under letter c) of paragraph 1, provided that the requirements under letters a) and b) of the same paragraph are met without considering the property purchased with the benefits listed under letter c), on condition that such property is disposed of within two years from the date of the deed.”

This amendment fits within the broader legislative effort to promote residential mobility, with the stated aim of “incentivizing the real estate market and facilitating the replacement of one’s principal residence.”

Interpretive Issue: Entitlement to the Tax Credit under Article 7 of Law No. 448/1998

This raises the question of whether, under this revised legal framework, it is still possible to claim the tax credit provided by Article 7 of Law No. 448 of December 23, 1998, even when the new purchase benefiting from “first home” incentives occurs before the disposal of the previously acquired subsidized property.

It is worth recalling that the Italian Revenue Agency had already expressed a favorable opinion on this matter in Circular No. 12/E of April 8, 2016, following the introduction of the previous version of paragraph 4-bis (enacted through the 2016 Stability Law). At that time, the tax authority clarified that:

“In light of the amendments affecting the ‘first home’ legislation, it must be considered that the tax credit under the aforementioned Article 7 is also available to the taxpayer who purchases a new home before selling the previously owned property.”

This interpretation relies on a teleological reading of the rule, aimed at not hindering the replacement of a principal residence and emphasizing the temporal flexibility introduced by the legislature.

The Scope of the Amendment and Continuity of the Interpretive Approach

The Italian National Council of Notaries maintains that it is reasonable to assume that the same interpretive approach may be applied under the new legislative framework.

In other words, a taxpayer who wishes to purchase a new home with the benefit of “first home” incentives, even without having yet disposed of the previous subsidized property, could still claim the tax credit under Article 7 of Law No. 448/1998, provided that the disposal takes place within the new two-year deadline.

Indeed, the extension of the term from one to two years further strengthens the legislature’s evolving approach, which aims to facilitate the replacement of the “first home” through a coherent and functional system of tax relief that reflects the realities of the housing market.

Conclusion

The tax credit for the repurchase of a first home would thus appear to remain applicable in light of the new two-year deadline introduced by paragraph 4-bis of Note II-bis. This interpretation is consistent with the position previously expressed by the Tax Agency and, more importantly, with the legislative intent behind the reform—namely, to promote residential mobility without penalizing taxpayers replacing their primary residence.

It should be emphasized that this is an interpretive opinion offered by the Italian National Council of Notaries and forms part of the broader academic and practical debate on the issue. The Italian Tax Agency has not yet issued an official position regarding the application of the new provision, so caution is advised, considering the possible evolution of the administrative interpretation.