IT | EN

The first home tax relief is applied to the collapsing building - black and white image representing a country house

In Italy the first home tax relief is applied to the dilapidated building

  1. Introduction
  2. What is a collapsing building
  3. The case
  4. The decision
  5. Further information

Introduction

The registration tax is applied to the collapsing building as a first home if the buyer, in the purchase deed, declares that he/she intends to use it as a main residence and requests the application of the reduced tax.

This is what the Court of Cassation ruled with Ordinance No. 3913 of 16 February 2025, emphasising that the regulations relating to the first home tax relief do not require the property to be suitable for habitation at the time of purchase, when the taxpayer declares that he or she intends to use the property as his or her main residence and when all the other requirements stipulated by the regulations for the application of the tax relief are met.

What is a collapsing building

A collapsing unit is a building or part of a building characterised by a significant level of deterioration classified in cadastral category F/2 (collapsing units), to which, as a consequence of the inability to produce income, no cadastral income is attributed.

These are ruins, buildings that are crumbling, collapsed or that are sagging, properties that are unusable, uninhabitable or unfit for use, and to make them habitable again they require radical interventions that go beyond ordinary or extraordinary maintenance.

For these units, and according to case law, the tax treatment regime for IMU (property tax) purposes is also considered inapplicable due to the absence of a taxable base.

The case

A sale and purchase agreement was signed for the sale of a ruined building expressly described as ‘unfit for income-generating use due to its extreme state of disrepair’ and registered as a collapsing building (F/2).

In the deed of purchase, the buyer requested to take advantage of the first home relief and paid the reduced registration tax of 2%.

Subsequently, the Revenue Agency, with a notice of assessment, challenged by the seller, settled the higher tax at 9%.

The judge of first instance upheld the appeal of the taxpayer, deeming the collapsed properties eligible for the first home tax relief, and specifying that for these the three-year period for inspections by the competent office of the Revenue Agency starts from the date of completion of the works.

The judges of the appeal court, upholding the decision of the court of first instance, reiterated the applicability of the first home tax relief to collapsing buildings, not considering the requirement of current habitability necessary.

The Revenue Agency lodged an appeal against the decision, arguing:

– the violation or false application of art. 1 and Note II bis Tariff Part One attached to D.P.R. n. 131/1986 as well as art. 14 disp prel. c.c. in the part in which the Board deemed the first home tax relief applicable to the collapsing building to be used as a main residence, as the ruin cannot be, even potentially, categorised as a dwelling;

– the violation or false application of art. 42 D.P.R. n, 131/1986 in relation to art. 360 c.p.c. for having affirmed that the tax paid is complementary and not principal.

The decision

The Supreme Court, rejecting the appeal, emphasises that even for properties under construction (F/3) at the time of the notarial deed of sale, the application of the tax relief for first homes is recognised, to be applied on the basis of what is declared in the deed by the taxpayer, also with regard to the presence of the other requirements.

The Ordinance therefore clarifies that the lack of current use as a residence and the inclusion of the property in the F/2 cadastral category are not obstacles to the application of the first home tax relief.

This approach is reinforced by the fact that F/2 properties are not included among those for which the first home tax relief is not allowed (A/1; A/8; A/9).

Furthermore, the reflection carried out in the decision highlights how the unfinished property can be used as a main residence and completed within the three-year forfeiture period for the exercise of the power of assessment by the competent office of the Revenue Agency.

Therefore, the Court affirms that the claimant’s restrictive interpretation is not reasonable when it comes to properties that are incomplete at the time of purchase, or have a use other than residential, where the buyer intends to use them as their main residence. This is because the regulation refers to a property ‘intended’ to be used as the purchaser’s main residence; this is also in consideration of the legislator’s aim to encourage the development of housing, including through restoration or conservative renovation.

Furthermore, in this case, the taxpayer, in addition to having declared in the deed of sale his intention to use the purchased property as a first home, had applied for municipal permits for the restoration of the building; these elements were considered sufficient to establish an effective consistency between the future use of the property and the declarations made.

Therefore, the Supreme Court allows the application of the first home tax relief also to the collapsing property, once again reiterating the sufficiency and necessity of the declaration of the intention to use the property as a future home, in addition, of course, to the presence of all the requirements demanded by the law.

And therefore, given that the law regarding the first home tax relief does not require the presence of the suitability of the property for habitation at the time of purchase, the benefit can also be recognised for the collapsing property as the classification of the building in cadastral category F/2 does not prevent it, but rather the susceptibility of the purchased property to be used for residential purposes, even through the necessary building works.

Further information