Did you know that purchasing property in Italy can open the door to a variety of special incentives and tax breaks, even if you are a foreigner? Italy offers an appealing array of financial benefits and opportunities to both domestic and international property buyers, particularly those who are investing in their first home, known as the “prima casa.”

In previous articles, we have explored some of these incentives, yet as they evolve with each passing year, it is important to stay informed about the latest changes. In this article, we provide a comprehensive overview of the available incentives for the year 2024, aiming to guide you through the current landscape of benefits and bonuses you could qualify for with a property purchase in Italy.

First home bonuses
First, there are some standard “first home bonuses” available to those purchasing their first Italian property in which they plan to establish residency. These homes also must not be luxury homes, villas, or castles/palaces (cadastral categories A/1, A/8, A/9). Property registration tax (imposta di registro) in these cases drops from 9% to 2% of the cadastral value of the property. Furthermore, if the seller is a private individual, the mortgage and cadastral taxes are then fixed at €50. If, however, you are purchasing from a company, such as a new construction directly from the contractor, the VAT tax drops from 10% to 4% of the price of the home, and cadastral, registration, and mortgage taxes are fixed at €200.

Finally, there is a special “Sismabonus” applicable to those who purchase properties that have undergone renovations to increase their seismic resistance. If the increase is by one class, then a tax deduction of 75% applies. If the improvement is instead by two classes, this tax deduction increases to 85%.

There was previously a bonus available to young people (under 36) buying their first property and with an ISEE (Equivalent Economic Situation Indicator) below €40,000 per year. Such people were eligible for significant reductions on registration, mortgage, and cadastral taxes. Unfortunately, this is no longer available. (Exceptions apply to those who signed a preliminary contract prior to December 31, 2023).

Bonuses related to renovation
If you have purchased a property in Italy and are renovating it, you might be able to apply for particular bonuses that give tax deductions or reimbursement. The first is the “Superbonus,” available to those working toward more energy efficient and earthquake-secure homes. A deduction of up to 70% on expenses is available this year. It only applies to apartment buildings.

There is also a bonus for general renovation work done that covers a number of things. The reimbursement is 50% with a maximum spending of €96,000.

A more complex bonus is the “Ecobonus,” which can offer a deduction between 50% and 85% depending on the kind of energy efficient renovation work you do (examples include windows, communal areas, solar panels, and modernizing heating and cooling systems).

An architectural barrier bonus is available to those who conduct renovations that increase accessibility (e.g. ramps, elevators, etc.) Up to 75% of expenses are eligible for tax benefits (if done between January 1, 2022 and December 31, 2025). As with the other bonuses, there are certain property types and price ceilings to be aware of, dependent on each case.

Finally, there is also the Green bonus. You can get up to 36% of a tax deduction for putting work toward private outdoor spaces. The maximum amount you can spend is €5,000 per unit.

Keep in mind, however, that for all of these bonuses, to receive the relative tax credit you must declare your taxes as an Italian fiscal resident with a tax return, known as a “dichiarazione dei redditi”.

Purchasing property while registered with A.I.R.E.
If you are an Italian citizen residing abroad and registered with A.I.R.E., and you purchase your first home in Italy, you are also eligible for certain tax benefits. The regulations for eligibility for certain individuals have tightened as of 2023, however. At the same time, you do not have to move to the newly purchased home within 18 months, as is the case for those who reside in Italy and want to receive these benefits. Now, if you are registered with A.I.R.E., residing outside of Italy, and are purchasing your first home in Italy, you can only access such benefits if you:

  1. Have previously lived in Italy for 5 years continuously and are currently abroad for work; and
  2. The property you want to purchase is in either your municipality of birth or the municipality where you previously resided.

However, due to the complex nature of such laws, it is always wise to consult a qualified lawyer who can clarify your situation for you.

If you qualify, among the first home benefits outlined above, you are also not be required to pay a municipal tax (IMU or imposta municipale unica), and could get a 67% reduction on other municipal taxes, such as the and TARI (waste collection tax). These extra benefits only apply if the property is not rented out. If you choose to rent the property while you’re away, then you do not qualify for these reductions.

Conclusion
In conclusion, the journey of purchasing property in Italy is not only an exciting venture into the world of real estate but also a financially savvy decision thanks to the numerous bonuses and incentives available, particularly for those who are acquiring their “prima casa.” By understanding and taking advantage of these opportunities, you can make your property investment more fruitful and tailor it to your needs.

Should you wish to explore these options further and discover how you can access these benefits, we encourage you to reach out to us at info@italianrealestatelawyers.com. Our team is here to assist you in navigating the intricacies of Italian real estate law and ensuring that you make the most of your property investment.

 

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