Guide to Tax Benefits first home, published by The National Notary Council.

The purchase of a home is a significant moment for many families, and it is essential to be

informed about the possible benefits and the necessary requirements to take advantage of

them, avoiding issues or the loss of these benefits.

1. What are home benefits?

The tax advantages for the purchase of the first home consist in a reduction of the taxes payable on the purchase of a dwelling, provided that certain subjective and objective requirements are met. The benefits apply both in the case of a purchase from a private seller and in the case of a purchase from a construction company.

Tax advantages

Depending on the type of purchase, different tax rates apply:

• Private purchase -> 2% registration fee (instead of 9%)

• Purchase from construction company -> VAT 4% (instead of 10%)

2. Who can apply for benefits?

The first home facilities can be requested by persons who buy for residential use.

Not eligible for benefits:

• Entrepreneurs and professionals who buy for their work.

• Companies or other entities (associations, foundations).

Foreign citizens can also take advantage of the benefits, provided they meet the other

requirements as required by law.

Benefits are also available if the property is purchased by:

• An unemancipated minor or a person unable to act (through a representative legal).

• More co-owners.

3. Which properties can be purchased at reduced rates?

The discount applies only to residential and non-luxury buildings, excluding

therefore:

• A/1 Luxury housing

• A/8 Luxury villas

• A/9 Castles and palaces of great artistic and historical value

The following types of cadastral property are eligible:

• A/2 Private housing

• A/3 Economic housing

• A/4, A/5, A/6 Rural or community housing

• A/7 Villini

A/11 Typical accommodation

The concessions also apply to the purchase of:

• Bare property

• Usufruct,

• Equipment (garage, cellars, attics) if belonging to the categories C/2, C/6, C/

7

4. Conditions for Benefiting from the Incentives

To qualify for the incentives, three fundamental requirements must be met:

A)Location of the Property

The property must be located in the municipality where the buyer has or intends to establish

residency within 18 months of the purchase.

Alternatively, it may be located in the municipality where the buyer works.

B)Not Owning Another Home in the Municipality

The buyer must not already own another residential property in the same municipality

Exception: If the only property owned is uninhabitable or unsuitable for residential use.

C)Not Having Already Benefited from First-Home Incentives on Another Property

If a home has already been purchased using these incentives, in order to obtain them for a new purchase, the first home must be transferred within two years of the new transaction.

5. Loss of benefits

If the taxpayer does not comply with the required conditions, he loses the benefit and must pay the

tax difference, plus interest and penalties.

Grounds for revocation:

1. Do not transfer residence within 18 months

2. Sell the property within 5 years without repurchasing another within 24 months

3. Change the intended use (e.g. turn the house into an office within 5 years )

The Revenue Agency may verify compliance with the conditions and, in case of irregularities,

revoke the facilities and request payment of full tax.

4. Tax credit for first home repurchase

Anyone who sells a house purchased with tax reduction and buys another within 12 months, is

entitled to a tax credit equal to the tax already paid on the first purchase.

Example of tax credit calculation

• First home purchased with registration tax of 1.000 €

• Second home purchased with tax of 2.500 €

• Recognised tax credit: 1,000 €

The credit can be used to reduce tax on new purchases or other future taxes.