Introduction
In Ruling No. 200/2026, the Italian Revenue Agency states that a taxpayer may retain the ‘first home’ tax relief applied to their Italian property, even if they sell it before the five-year period has elapsed, provided they have first purchased a property abroad to serve as their main residence and sell the Italian property within two years of the new purchase.
The case
The clarification concerns an Italian citizen residing abroad who, after purchasing a property in Italy in 2025 subject to 4% VAT, purchased a second property abroad with their spouse, with the intention of transferring their habitual residence there and subsequently selling the Italian property before the expiry of the two-year period.
Two scenarios, one common purpose
The general rules are set out in Note II-bis to Article 1 of the Tariff, Part One, annexed to Presidential Decree No. 131 of 26 April 1986. In the event of the sale of a property purchased under the scheme within five years, the taxpayer forfeits the benefit, unless they purchase, within one year of the sale, another property to be used as their main residence.
Paragraph 4-bis, however, operates in the reverse order: it allows the purchase of a new home with the tax relief even whilst already owning a property purchased with the benefits, provided that the previously owned property is disposed of within two years of the new purchase.
The Agency adopts a logical and systematic interpretation of the two provisions. If the taxpayer first purchased the property abroad to be used as their habitual residence and then, within two years, sells the Italian property purchased under the tax relief scheme, thesubstantive purpose of replacing the residence is fulfilled: consequently, the tax relief relating to the first purchase is not forfeited.
The property abroad is eligible, but must actually be occupied
The key point is that the new property may be located outside Italy. This conclusion is consistent with the administrative guidance already set out for the traditional ‘sale-repurchase’ sequence: the foreign property is eligible to prevent forfeiture if it is actually intended as a habitual residence and if there are appropriate administrative cooperation mechanisms to enable this to be verified.
In accordance with the rulings of the Court of Cassation, the deed of sale or a declared intention is not sufficient; what is required is actual use as a main residence, not merely the expression of a housing plan.
Evidence: apostilles, translations and concrete documentation
Answer No. 200/2026 attaches particular importance to the burden of proof. At the time of the sale of the Italian property within five years, the taxpayer must be able to produce the following to the tax office:
- a copy of the deed of purchase for the foreign property
- documentation proving its actual use as a main residence, such as contracts or utility bills for electricity, water and gas
- an Italian translation and apostille for documents issued abroad, in accordance with the Hague Convention of 5 October 1961.
The submission of these documents does not prevent the Agency from carrying out routine checks on the taxpayer’s actual habitual residence and on the evidential value of the documentation provided.
The Legal Nook Insights: practical implications
The response recognises greater consistency between the needs of international mobility and the anti-avoidance function of the ‘first home’ scheme. A taxpayer who makes an actual change of residence should not be penalised simply because their new centre of life is located abroad.
However, it remains essential to plan correctly the timing and evidence. Protection depends on the actual use of the overseas property as a main residence and on the sale of the Italian property within two years. It is this, rather than the location of the new property, that is the real safeguard against forfeiture.
The Italian ‘first home’ tax does not apply automatically. To retain this benefit, it is necessary to have a correct chronology of legal documents, to actually reside in the new home, and to have a file of supporting documents that can be presented to the tax authorities.
