How to Save on Taxes When Buying Your First Home in Italy

by Adriana ruiz

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Buying a first home in Italy comes with significant tax benefits and incentives designed to make property ownership more accessible. Whether you are an Italian national or a foreigner, understanding these advantages can translate into substantial savings on your property purchase. The “Prima Casa” regime is essentially a set of tax reliefs applicable to the purchase of a residential property that meets specific criteria, primarily intended to be the buyer’s primary residence.

What the Prima Casa Benefits Include

When you qualify for prima casa status, the taxes on your purchase are significantly reduced:

• Buying from a private seller or a VAT-exempt company:

° Registration tax (imposta di registro): 2% of the property’s value instead of 9% (minimum €1,000)

° Mortgage tax (imposta ipotecaria): €50

° Land-registry tax (imposta catastale): €50

• Buying from a company that applies VAT:

° 4% VAT (instead of 10% or 22%)

° Fixed registration, mortgage, and land-registry taxes of €200 each

These benefits also apply to pertinenze—related spaces such as garages or storage rooms—one for each cadastral category (C/2, C/6, C/7) when they serve the main home.

Using the “Prezzo-Valore” Rule

If you buy from a private seller (no VAT), you may request taxation based on the cadastral value instead of the sale price, known as the prezzo-valore system.
The taxable base is calculated as:

Rendita catastale × 1.05 × 110

This typically lowers the registration tax and limits the Revenue Agency’s power to reassess the sale price. Notaries also reduce their fees by 30%.

The Requirements for Prima Casa

To claim the benefits, both the property and the buyer must meet certain criteria.

1. Property requirements

• The home must belong to one of the following cadastral categories: A/2, A/3, A/4, A/5, A/6, A/7, A/11.

• Luxury properties—categories A/1, A/8, A/9 (villas, castles, historical palaces)—are excluded.

2. Location requirement

• The property must be in the municipality where you already reside or where you plan to move within 18 months of purchase.

• Alternatively, the property can be in the municipality where you work or study.

• Italians or expats who have lived abroad for work may buy in their town of birth or previous residence.

3. Personal requirements
At the time of purchase, you must declare that you:

• do not own another home in the same municipality;

• do not own, anywhere in Italy, another property purchased with prima casa benefits (unless you sell it within one year of the new purchase).

Buying a New Home When You Already Own One

Since 2016, you may buy a new prima casa even if you still own another one bought with the same benefits, provided you sell the first within 12 months.
If you fail to sell in time, the prima casa relief is revoked, and you must pay the higher taxes, interest, and a 30% penalty. However, you can request a recalculation (ravvedimento operoso) to reduce the fine.

Tax Credit for Buying Another Prima Casa

If you sell your prima casa and buy another within one year, you are entitled to a tax credit equal to the registration tax or VAT paid on the first purchase.
You can use this credit to:

• reduce the registration tax on the new property;

• offset other property or income taxes (Irpef);

• compensate other taxes through the F24 form using code 6602.

The credit cannot exceed the tax due on the new property and is non-refundable.

When You Lose the Benefits

The Revenue Agency may revoke prima casa benefits if:

• any required declaration in the deed is false;

• the property is sold or donated within five years, unless you buy another main home within one year;

• you fail to move your residence to the municipality within 18 months;

• you fail to sell your previous home purchased with prima casa benefits within one year of the new purchase.

If revoked, you must repay the saved taxes, interest, and a 30% fine.

Keeping the Benefits

You keep your prima casa status if, within a year of selling or donating the property, you:

• buy a home abroad and make it your habitual residence, provided administrative cooperation allows verification; or

• buy a plot of land and begin building a non-luxury home intended as your main residence within the year.

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Buying your first home in Italy is an exciting step—and knowing how to use the prima casa incentives can make it far more affordable.
Carefully check that you meet all legal and timing requirements, include the correct declarations in your notarial deed, and consult your notary or tax advisor before signing.

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