Under 36 first home relief in Italy: possible until 31 December 2024

Introduction

The under 36 first home relief was introduced in 2021 in Italy, but at the end of this 2024, the Revenue Agency clarified that it can also be requested for deeds stipulated until 31 December of 2024.

The relief is an important measure that allows young people to purchase a property without having to pay registration, mortgage and cadastral taxes.

In order to enjoy the relief, it is important to meet certain requirements, which are additional to those required to enjoy the main residence excemption (also called first home relief) (https://antonellolawfirm.com/2024/11/21/buying-a-property-in-italy-with-main-residence-excemption/).

First home relief for under 36s

The first-home relief for under 36s, introduced by the Support Decree (no. 73/2021), is a measure that entails the exemption of registration, mortgage and cadastral taxes for the purchase of ‘first homes’ in relation to real estate used as a dwelling.

The exemption applies to deeds of purchase or constituting rights, such as property rights, other minor rights in rem and bare ownership (https://antonellolawfirm.com/2023/10/22/italian-real-rights-or-rights-in-em-definition-and-classification/).

Who can apply for the under 36 first home relief

Anyone under 36 years of age in the year in which the notarial deed is notarialised may apply for the under 36 first home relief.

Applicants must also prove that they have an ISEE value (indicator of the equivalent economic situation) not exceeding 40,000 euros per year.

For which properties the under 36s first home relief can be requested

The relief can be requested for all properties belonging to the cadastral categories:

A/2 civil type dwellings

A/3 low-cost dwellings

A/4 popular dwellings

A/5 ultra-popular dwellings

A/6 rural type dwellings

A/7 cottages dwellings

A/11 typical dwellings

Appurtenances that fall into the cadastral categories are also permitted:

C/2 warehouses and storage rooms

C/6 barns and garages

C/7 closed or open canopies

In the case of appurtenances, it must be specified that the purchase may be made together with or separately from the principal dwelling, but the deed, is in any case, must be stipulated within the term of validity of the relief, and, in any case, the requirements for the classification of these assets as appurtenances must also be met.

In addition, the limit of one appurtenance per cadastral category must be observed.

Under 36 first home relief

As far as reliefs are concerned, a distinction must be made between transactions subject to VAT and those not subject to VAT.

For transactions not subject to VAT , are not due:

registration tax

mortgage tax

cadastral tax.

For transactions subject to VAT, exemption from payment of registration, mortgage and cadastral taxes is maintained, and a tax credit equal to the amount of VAT paid to the seller is granted.

This credit can be used to:

pay registration, mortgage or cadastral taxes on deeds, inheritances, donations, and reports filed after the date of acquisition of the credit;

pay the IRPEF (Personal Income Tax) due on the basis of the declaration submitted after the purchase with relief;

compensate the amounts due by means of an F24 form;

In addition, for loans and mortgages granted for the purchase or renovation of real estate purchased with relief (also known as purchase-related loans), no substitute tax is due. In this case, in order to benefit from the relief, the beneficiary must declare the existence of the requirements in the contract or in a document to be attached.

Loss of under 36 first home relief

First home relief under 36 may be lost if the applicant does not actually meet the declared requirements.

In this hypothesis we must make a distinction.

Case 1 the person who loses the right reserved for the under 36s still meets the requirements for the main residence excemption:

– for deeds subject to registration tax: there is the recovery of the tax at the rate of 2% and mortgage and cadastral taxes at the rate of 50 euros each;

– for deeds subject to VAT, registration, mortgage and cadastral taxes and VAT at 4% must be paid. In addition, there will be an obligation to repay the tax credit.

Case 2 who loses the right reserved for the under 36s does not qualify for the main residence excemption: there is the obligation to pay registration tax at the rate of 9% and mortgage and cadastral taxes at the rate of 50 euro each, and there is the obligation to recover the tax credit.

In any case, penalties and accrued interest will also be due.

The last days to enjoy the under 36 first home relief

The Agenzia delle Entrate has clarified that thefirst home relief under 36 applies to deeds already stipulated in 2024, and to those stipulated up to 31 December 2024 for which the preliminary contract was signed and registered by 31 December 2023 (even before 26 May 2021, the date on which the relief was introduced).

Moreover, those who signed the deed between 1 January 2024 and 29 February 2029, without taking advantage of the relief despite meeting the requirements, are entitled to a tax credit equal to the amount paid, also with reference to loans and mortgages.

In this case, a supplementary deed is required in which the taxpayer declares that he wishes to benefit from the ‘prima casa under 36’ relief and that he meets the requirements.

It is important to remember that the credit can be used until 31 December 2025 and that the supplementary deed can also be rendered for the whole of 2025 (also until 31 December).