Buying your first home is an exciting and important milestone in anyone’s life. However, for those unfamiliar with real estate, the process can seem overwhelming due to complex regulations, bonuses, and tax incentives. While these measures make homeownership more accessible, they can also be confusing.
First-time homebuyer benefits provide tangible financial advantages: they reduce taxes associated with purchasing a property and make it possible for more people to achieve their dream of owning a home.
To support first-time buyers, the Italian government offers several tax incentives, recently updated with the 2025 Budget Law.
If you’re considering buying your first home, keep reading to discover the eligibility requirements, conditions, and the latest updates so you can take full advantage of these benefits.
Who Can Benefit from First-Time Homebuyer Incentives?
To qualify for first-time homebuyer benefits, several key requirements must be met:
– Individuals only: The incentives are reserved for natural persons purchasing a residential property. Companies, organizations, professionals, and entrepreneurs are excluded.
– No other property in the same municipality: The buyer must not own any other residential property in the same municipality as the one they intend to purchase.
– No previous benefits: The buyer must not hold, anywhere in Italy, ownership, usufruct, usage, or habitation rights on another property previously purchased using first-time homebuyer benefits.
– Residency transfer: It is mandatory to transfer residency to the municipality where the property is located within 18 months of purchase. This requirement is essential to retain the tax benefits associated with the incentive.
– Italian citizens living abroad: They can also benefit if the property is located in the municipality of their birth or in the one where they resided before moving abroad.
What Are the Incentives for Buying a First Home?
Reduced Direct and Indirect Taxes
First-time homebuyer incentives include significant reductions in both direct and indirect taxes, making property purchases more accessible and affordable. The benefits vary depending on the type of seller:
– Purchase from a private individual or a VAT-exempt company:
• Registration tax: 2% of the cadastral value of the property, instead of the standard 9%;
• Mortgage and cadastral taxes: Fixed at €50 each, instead of being calculated based on the property value.
– Purchase from a company with VAT-applicable sale:
• VAT: Reduced rate of 4% instead of 10%;
• Registration, mortgage, and cadastral taxes: Reduced to €200 each.
Tax Credit and Offset
If a property purchased with first-time homebuyer incentives is sold and another is bought with the same incentives, the buyer can benefit from a tax credit equal to the registration tax or VAT already paid on the first purchase.
This credit can be used to offset taxes due on the new purchase or other future taxes.
The credit can be applied in two ways:
1. Immediate offset: Directly used to reduce taxes payable on the new purchase.
2. Offset against future taxes: If the registration tax or VAT due on the new purchase is lower than the available credit, the remaining balance can be used to pay other taxes owed by the same taxpayer.
Practical Examples:
Case 1: Immediate Offset
• In 2024, Luca buys his first home using first-time homebuyer incentives and pays a registration tax of €2,000.
• In 2026, Luca sells this house and buys another one, again using the incentives.
• The new home purchase requires a registration tax of €2,500.
• Thanks to the €2,000 tax credit from the first home, Luca only needs to pay the remaining €500 (2,500 – 2,000).
Case 2: Offset Against Future Taxes
• In 2024, Luca buys his first home with incentives and pays a registration tax of €2,000.
• In 2026, he sells this house and buys another one using the incentives.
• The new purchase requires a registration tax of €1,500.
• Since Luca’s tax credit is €2,000, but the tax due is only €1,500, he has a remaining credit of €500.
• This €500 can be used to pay future taxes (e.g., inheritance tax, income taxes).
When Is the Right to the Tax Credit Lost?
The 2025 Budget Law introduced a significant change regarding tax incentives for the purchase of a first home. Starting from January 1, 2025, the deadline to sell a property previously purchased with the “first home” incentives has been extended from 12 to 24 months. This change gives taxpayers a longer period to sell the previous property without losing the tax benefits on the new purchase. Here’s a practical example: Suppose Maria bought a property in 2023 using the first-time homebuyer incentives. In January 2025, she decides to buy a new property, also using the same incentives. Thanks to the new rule, Maria now has 24 months—until January 2027—to sell the property purchased in 2023. If she does not manage to sell within this period, she will lose the tax benefits on the new purchase and will have to pay the full taxes, along with any penalties and interest. In summary, the right to these incentives is lost if: – The new purchase occurs more than 24 months after selling the first home; – The new property does not meet the first-home requirements (e.g., luxury cadastral categories A/1, A/8, A/9); – The tax credit is not declared at the deed of sale for the new purchase. Note: The tax credit does not entitle you to a cash refund. If it is not used for the new purchase or to offset other taxes, it will be lost.Guarantees and Subsidized Mortgages
The 2025 Budget Law has extended, for the 2025–2027 period, the First Home Mortgage Guarantee Fund, aimed at priority categories such as young people under 36, large families, and atypical workers. This fund provides a state guarantee of up to 80% of the mortgage amount, making it easier to access credit for the purchase of a first home. Learn more about the First Home Mortgage, the requirements, and how to access it.
Updates in the 2025 Budget Law for First Home Benefits
The 2025 Budget Law introduced significant changes to the rules regarding the purchase of a first home, offering greater flexibility and support for buyers.
The most important update, as already mentioned, is the extension of the deadline for selling a property previously purchased with the first-home benefit: until December 31, 2024, buyers had only one year to sell or donate their previous property in order not to lose the tax benefits on the new purchase. Starting from January 1, 2025, this period has been extended to two years.
This change also applies retroactively to those who purchased a new property in 2024 without having yet sold the previous one within the original deadline.
Another key aspect concerns the tax treatment of renovations and energy efficiency improvements.
The Renovation Bonus, which provides a 50% deduction on eligible expenses, has been extended until December 31, 2025. From 2026, the rate will decrease to 36%.
Similarly, the Ecobonus for energy efficiency upgrades will undergo changes: for first homes, the deduction will be 50% in 2025 and 36% in 2026 and 2027; for second homes, the rate will be 36% in 2025 and 30% in the following years.
Additionally, the law introduced a new incentive for purchasing high-efficiency household appliances, with a 30% deduction on the cost, up to a maximum of €100 per appliance. This limit increases to €200 for families with an ISEE (Equivalent Economic Situation Indicator) below €25,000.
Finally, the measure dedicated to young people under 36 for access to a first-home mortgage has been extended until 2027. Thanks to the state guarantee, it is possible to obtain mortgages covering 80% to 100% of the property value, provided the applicant has an ISEE below €40,000. This tool represents an important incentive for young couples and large families looking to purchase their first home.
So, if you are considering buying your first home, don’t hesitate to take advantage of these benefits. Carefully check the requirements and conditions to ensure you can make the most of these tax advantages. Purchasing your first home can be a significant and more accessible step thanks to these measures.
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