The first-home relief: who qualifies, what it saves and how it is lost

Luca buys his first home from a private owner; its cadastral value is €100,000. As a qualifying first-home buyer he pays €2,100 in tax instead of €9,100. Three years later he is offered a job in another region, sells and moves into a rented flat. He buys nothing within a year, and the tax agency claims back €7,000 of tax, a €2,100 penalty and interest.

What a first home really means

The label prima casa is misleading. It does not mean the first home a person ever buys. It means a set of conditions which, if met on purchase and kept in the following years, cut the taxes substantially. You can qualify on your second or third purchase and fail to qualify on your first.

The conditions concern three separate things: the property itself, where it sits in relation to the buyer's life, and the homes the buyer already owns. All three must be checked, and all three are declared in the purchase deed, because the notary applies the reduced rates on the strength of those statements.

The property: eligible categories and appurtenances

The relief covers dwellings registered in the categories running from A/2 to A/7, together with A/11: civil, economic, social, very basic and rural dwellings, small detached houses and homes typical of the local area. Categories A/1, A/8 and A/9, which group upper-class homes, villas, and castles or palaces of special merit, are excluded.

What matters is the category in which the property is, or could be, classified, not the word used in the listing. A house advertised as a villa may be an A/7 detached house and eligible; a penthouse sold as an ordinary flat may turn out to be A/1. The land-registry extract settles the question before signing, not afterwards.

The agency's page on eligible properties adds two less obvious cases. Buildings still under construction, registered as F/3, qualify if they are structurally designed as homes. So do derelict units registered as F/2, provided they actually become a dwelling within the three-year window the agency has for tax assessments.

Appurtenances in categories C/2, C/6 and C/7 are covered too: cellars and storerooms, garages and parking spaces, open or closed canopies. The limit is one appurtenance per category, permanently serving the main home, which itself must have been bought with the relief.

Location: residence, work and eighteen months

The home must be in the municipality where the buyer lives or moves their official residence within 18 months of the purchase. That is the most common route, and the undertaking to move is given in the deed. Members of the armed forces and police forces are exempt from this condition.

Residence is not the only link accepted. The relief is also available if the home is in the municipality where the buyer carries on their activity, even unpaid, such as studying, volunteering or sport. Someone who moved abroad for work, after at least five years living or working in Italy, may buy in their birthplace or last Italian home town.

Existing homes: what the buyer already owns

The buyer must not own another dwelling in the same municipality, however it was acquired. If they own a flat there that was bought without the relief, they must sell it before claiming the relief on the new purchase; the agency's page says so explicitly.

Across the rest of Italy the ban is narrower: it covers only property bought with the same relief, including purchases made by the spouse, whether held as full ownership, use, usufruct, right of habitation or bare ownership. An inherited house in another town, originally bought without the relief, does not stand in the way.

Since 2016 there has been a way out for owners of a home bought with the relief. They may buy the new one with the relief if they undertake to sell the old one, and the 2025 Budget Law stretched that deadline from one year to two years after the new purchase.

The agency adds that the longer deadline also helps buyers whose old one-year window had not yet run out on 31 December 2024. Someone who bought on 25 January 2024 could sell the home already owned until 25 January 2026, rather than by 25 January 2025.

The statements made in the deed

There is no separate application to the tax agency. The relief is obtained in the purchase deed, where the buyer declares that the conditions are met and gives the required undertakings. The notary applies the reduced rates on that basis, and the agency may check the statements later.

• That the buyer lives in the municipality, will move there within 18 months, or works there
• That the buyer owns no other dwelling in the same municipality
• That the buyer holds no rights in Italy over another property bought with the relief, or undertakes to sell it within two years
• For appurtenances, that they serve the main home bought with the relief

These few lines carry a great deal of weight. A statement that proves untrue is in itself grounds for losing the relief, whatever the buyer's good faith. Before completion, take the time to list exactly which properties you hold, including shares and bare ownership, and how each one was acquired.

What the relief saves on each route

When the seller is a private individual, or a company selling without VAT, a qualifying buyer pays 2% registration tax instead of 9%, and the mortgage and cadastral taxes stay at €50 each. The €1,000 floor on proportional registration tax applies to the reduced rate as well.

When a business sells with VAT, the rate falls to 4% instead of 10%, while registration, mortgage and cadastral taxes remain fixed at €200 each. On the registration route, moreover, no stamp duty, special cadastral charges or mortgage fees are due on the deeds and formalities connected with the purchase.

In practice a qualifying buyer purchasing from a private owner often faces a total tax bill of 2% of cadastral value plus one hundred euros. That is why checking the conditions should come before any haggling over price: it can move the overall cost more than a discount wrung from the seller.

Buying from a developer brings a different kind of saving. The 4% VAT is charged on the full price, since cadastral value has no role there, and the gain against 10% is six percentage points of the price. On a large purchase it remains the heaviest item after the price itself.

When the relief is lost

The saving made on completion is not final. The agency lists the events that cancel the relief, and each one matches an undertaking given in the deed or a statement that turned out to be false. Knowing them before buying is the only way to judge whether the relief is really within reach.

• The statements made in the deed to obtain the relief prove to be untrue
• The buyer does not move their residence to the property's municipality within 18 months
• The home is sold or given away within five years of purchase, and no other home to be used as main residence is acquired within one year
• The relief home already owned is not sold within two years of buying the new one

A sale within five years deserves a closer look. It is not forbidden as such: the relief is lost only if, within one year, the seller does not acquire another property, even as a gift, to be used within a reasonable time as their main home. A gift received within that year can therefore save the relief.

The same applies the other way round. Giving the relief home to a child before the five years are up also cancels the relief, unless the donor acquires another main home within a year. Anyone thinking of passing a home to the next generation early should check the date of their own purchase first.

The consequences are spelled out. On the registration route the buyer owes the difference between standard registration tax and the tax paid, a 30% penalty and interest. On the VAT route they owe the difference between standard and reduced VAT, the same 30% penalty and interest.

A word on what the penalty is computed on. For the VAT route the agency's page ties it expressly to the tax difference. For the registration route the wording refers to 30% of the same taxes, which the linked calculator applies to the difference recovered. On a real case, have a professional confirm that reading.

Reselling within five years: the capital gain

Anyone selling within five years usually has a second question: is the profit taxed? Article 67 of the consolidated income tax act, the TUIR, treats as income the gain made on selling a property bought or built no more than five years earlier.

The same provision excludes units that, for most of the time between purchase and sale, were the main home of the seller or their family. So someone selling the home they genuinely lived in pays no tax on the gain, even though they may still lose the relief on the purchase taxes.

Where the gain is taxable, for instance because the flat was let, the seller may ask the notary for a 26% substitute tax in place of ordinary income tax. The two regimes meet at the same five-year mark but answer different questions: one concerns the purchase taxes, the other the profit on resale.