Tax breaks for first home under 36

What does the rule provide?

The law (Legislative Decree 25 May 2021, n. 73) provides for exemption from the payment of registration, mortgage and cadastral taxes for the purchase of ownership of homes that meet the requirements of a "first home", or for the transfer or establishment of bare ownership, usufruct, use or habitation of homes that meet the requirements of a "first home" in favor of individuals who have not reached 36 years of age in the year and who have an ISEE not exceeding 40,000 euros per year.

They will also be able to access the Guarantee Fund for their first home and the guarantee coverage percentage goes from 50 to 80% of the financing required to take out a mortgage.

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To which types of property purchases do the tax breaks provided by the Sostegni bis decree apply?

The rule refers to the deeds of purchase of homes for which the requirements of "first home" are met and, therefore, excluding those of cadastral category A1, A8, A9. The related appurtenances also benefit from this tax break. The rule also applies when the sale of residential homes with the requirements of "first home" takes place by a company.

What conditions must be respected?

To benefit from the relief you must:

• not own other properties, wherever they are located;
• the home must not be luxury, i.e. registered in categories A/8 and A79;
• if you are the owner, even by share, of a house in the same municipality as the one to be purchased, this must be sold within 1 year of the deed. You must therefore move your residence within 18 months of the deed to the municipality where the property to be purchased is located;
• ISEE less than 40,000 euros. The relief should also apply to purchases made by two people included in two different ISEEs which are each for an amount less than 40,000 euros, but together for a higher amount;
• if one of the buyers meets the requirements and another buyer does not, the benefit applies only to the part of the taxable value referable to the buyer with the required requirements;
• you must not have yet reached thirty-six years of age in the year in which the deed is signed.

Does the tax exemption also apply to mortgages?

The law provides for exemption from the substitute tax, which would be due in the amount of 0.25% for loans provided for the purchase, construction and renovation of residential properties relating to first home homes. The existence of the requirements to benefit from tax breaks must be declared by the borrower.

When does the rule come into force and until when will it be possible to benefit from the benefits?

The measures contained in the Sostegni bis decree apply to deeds stipulated from the date of entry into force of the decree law, 26 May 2021, until 30 June 2022.

When do first home benefits expire? What happens in this case?

The first home benefit will be forfeited due to false declaration, sale of the home before 5 years not followed by repurchase within the year, failure to sell within the year of the purchase of the previous first home. In these cases, since the conditions for enjoying the "first home" benefits are no longer met, the registration tax will have to be paid at 9%, the mortgage and cadastral taxes at a fixed amount of 50 euros each, in addition to the application of interest and penalties. The substitute tax on the loan will be applied at 2%.

What happens for those who purchase from a business?

The law grants buyers a tax credit equal to the VAT paid to the company in relation to the purchase. The tax credit can be deducted from registration, mortgage, cadastral, inheritance and donation taxes due on deeds and reports submitted after the date of acquisition of the credit, or it can be used to reduce personal income taxes due on the basis of the declaration to be submitted after the date of purchase; it can also be used as compensation but in any case does not give rise to refunds.

What happens if you do not meet the age and income requirements established by law?

Where the Revenue Agency finds that the other requirements established such as age, ISEE value or time period of validity of the concessions do not exist, the taxes due plus penalties and interest must be paid. Since the requirements and conditions for the application of the 'first home' relief have not ceased, the registration tax will be paid at the rate of 2% and the substitute tax for the loan at the ordinary rate of 0.25%.