When it comes to purchasing their first home, Italian citizens are eligible for a range of concessions provided by the state. However, questions surface when individuals residing abroad, registered in the Register of Italians Residing Abroad (A.I.R.E.), seek access to these benefits. In response, on June 13, 2023, Italy amended a new law (D.L. n. 69/2023, Art. 2) regarding the primary-home tax benefits that Italians living abroad may claim. The new legislation marks a departure from the previous regulations, as it grants tax incentives only to certain categories of Italians enrolled in the Register of Italians Residing Abroad (A.I.R.E.). In this article we will explore the key aspects of the law, including the eligibility criteria, and discuss how it impacts Italians living abroad, including dual citizens.

Understanding the Law

The newly revised law specifically addresses the provision of tax benefits for the purchase of a primary residence in Italy by Italians residing abroad who are enrolled in A.I.R.E. Unlike the previous condition, which allowed any Italian enrolled in A.I.R.E. to automatically qualify for primary home tax benefits without additional requirements, the amended law introduces stricter eligibility criteria. Previously, proof of residency in Italy was not required, as long as the purchased property served as the individual’s primary residence in the country. However, the revised law now mandates that individuals meet specific conditions related to previous residency in Italy and work-related connections to be eligible for the tax benefits. These additional requirements are intended to target and support working Italians residing abroad who have established strong ties with Italy through their residential history.

 Eligibility Criteria

The new amendment introduces specific eligibility criteria to qualify for primary-home tax benefits for Italians residing abroad. To be eligible, individuals must meet the following conditions:

  1. Previous residency and work reasons: Italians who have previously lived or resided in Italy for a continuous period of at least 5 years and are currently residing abroad with their tax residency in a foreign country, due to employment / work reasons, are eligible for the tax benefits.
  2. Location of the home: in order to qualify for the primary-home benefits, the property being purchased in Italy must be situated in the municipality where the individual was born or in the municipality where they previously resided or worked before moving abroad.

In the case of dual citizens, such as an American-Italian citizen who is enrolled in A.I.R.E. but has never lived in Italy, eligibility for primary-home tax benefits under the new law would therefore rule out. However, the law does not explicitly address the specific circumstances of dual citizens who lack residency experience in Italy. It is advisable for dual citizens to consult with legal professionals to discuss their eligibility and any potential exceptions or additional requirements that may apply to their situation.

Importance of the Law

The newly implemented law is specifically aimed at providing primary home tax benefits to expatriated Italians who have left the country for work-related reasons but have maintained strong ties with Italy through prior long-term residency. By extending primary-home tax benefits to eligible Italians residing abroad, the government aims to facilitate the return and reintegration of Italian expatriates. This approach acknowledges the contributions and potential economic impact of Italians living abroad, fostering a stronger bond between them and their home country. However, on the flip side, the new requirements could be perceived as excluding Italian citizens who have obtained citizenship through Jure Matrimoni or Jure Sanguinis and have never resided in Italy or have resided in the country for less than 5 years.

Conclusion

Italy’s recent enactment of a new law granting primary-home tax benefits to Italians residing abroad under specific conditions represents a shift in policy. By providing tax incentives for the purchase of a primary residence, the government aims to specifically support those expatriates who have work-related connections or have previously resided in Italy for an extended period. These tax benefits encourage Italians living abroad to invest in and strengthen their ties to their home country. While the new law granting primary-home tax benefits to Italians residing abroad has officially gone into effect, it is important to note that the Notary Commission of Italy, responsible for overseeing property transactions, has yet to express its official stance on the implications and interpretation of the ruling. Therefore, further clarification from the Notary Commission is eagerly awaited to provide guidance on the practical application of the law for eligible individuals, including dual citizens, and to address any potential ambiguities or exceptions that may arise.

 

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