How many times have you thought about it? Buying a house is a unique experience, a mix of emotions that mix and give life to a dream. It is also true, however, that leaving aside the emotional aspect linked to the purchase, if you choose to buy a house you will have to take into account a series of charges and duties related to taxation. What are the taxes to pay for the purchase of the first home in Italy? Here in this complete guide, we will analyze together what expenses you will have to incur if, among your projects, there is precisely that of buying and moving to a new home.
Let’s clarify immediately that the taxes vary according to the denomination that the house will have for those who buy it. In what sense? It is understood that for those who buy as a second home, there will be certain expenses to be faced, substantially very different from those that will be incurred by those who are buying as a first home.
Today, we of the WeAgentz blog want to focus on the purchase taxes of the first home with a particular focus on the tax bonuses of 2021. Tax concessions are often still little exploited by consumers, who could instead enjoy considerable benefits.
It is therefore clear that already in the search phase of the property, it will be essential for you to keep an eye on the particular requirements, which you will subsequently need to know to correctly calculate all the expenses (and possible bonuses) directly linked to that property. Of course, if you choose to rely on a real estate professional who will help you during every phase, it will be his job to advise you and above all to inform you.
Often erroneously, it is thought that the taxes to be paid for the purchase of the first home are fixed expenses, that is, the same for all types of homes: nothing could be more wrong! Or rather: there are fixed taxes and others that vary according to different factors, which we will see later.
First home purchase taxes: everything you need to know
With this in-depth study we address all those who have chosen to take the “big step” towards buying a house, probably after having already evaluated some options – obligatory or alternative – such as rent or mortgage, deciding accordingly that yes, it is the right time has come!
In fact, this guide was created with the intention of clarifying in general lines which types of expenses will have to be faced when you decide to buy your first home, as well as how to calculate everything accurately, without risking nasty surprises when it would be too late!
First fundamental step: knowing (and recognizing) the requirements
A fundamental step to take before calculating the taxes on the first home is undoubtedly to know the minimum requirements to be able to enjoy the tax bonuses (and therefore save some money!).
Here then, as already mentioned, it is good that you know that it will be necessary to have a residence in the same municipality where the house you want to buy is located. If this is not the case in the deed phase, know that through a written declaration to be attached to the notarial deed, you will be able to take advantage of 18 months to align this data.
It is important, indeed essential, that your future first home belongs to one of the following cadastral categories:
- A / 2, civil dwellings;
- A / 3, economic housing;
- A / 4, popular housing;
- A / 5, ultra-popular housing;
- A / 6, rural dwellings;
- A / 7, houses in small villas;
- A / 11, houses and lodgings are typical of the places.
The bonus, on the other hand, is not allowed for the purchase of a house belonging to the following cadastral categories:
- A / 1, stately homes;
- A / 8, houses in villas;
- A / 9, castles and palaces of great historical and artistic value.
It is never trivial to repeat that the last fundamental requirement to take advantage of the first home benefits is that of not even being in a community of assets, nor the owner of other properties throughout the national territory. In short words? This house must really be your first home, on paper but also in fact.
Before moving on to the hot topic, that is, that relating to taxes for the purchase of the first home, one last piece of advice that your real estate consultant will certainly suggest you is to declare everything in writing during the purchase deed: in this way, the practice itself will be made leaner and faster.
NB: the only exception as regards the requirements for accessing the facilities is for police officers and the armed forces; in this case, the duty to have a residence in the same city in which the property is located does not count as provided for by paragraph 1 of article 66 of law n.342 of 2000.
Taxes on the purchase of the first home: what are the taxes to pay
Before analyzing the various possibilities individually, we clarify that based on the type of purchase and a mix of other factors, the potential buyer will have to honor:
- Registration tax
- Mortgage tax
- Cadastral tax
- Stamp duty
- Mortgage tax
Keep in mind that in practice, everything has radically changed from 2014 onwards, when the legislative decree n.23 / 2011 was implemented. In fact, article 11 explains the tax changes relating to taxes on the purchase of the first home.
As regards the so-called fixed expenses, the following must be observed, distinguishing first of all in the case of purchase from a private individual to a construction company.
- If you buy from a private individual: in this first case, as regards the first home you will have to pay a registration tax of 2%, instead of 9%, on the cadastral value of the property. On the other hand, as regards the mortgage and cadastral taxes, they must be paid in a fixed amount of 50 euros each.
- If you buy from a business: if instead the seller is a business, for your first home you will have to pay the value added tax (VAT), calculated on the sale price, equal to 4% instead of 10%. In this case, the registration, cadastral and mortgage taxes are paid in the fixed amount of 200 euros each, for a total therefore of 600 euros.
Calculation of the cadastral value: a fundamental step
How to calculate the cadastral tax of a property? To determine the value on which to apply the registration tax, it will be necessary to take the cadastral income of the new house, revalue it by 5% and finally multiply it by a specific coefficient:
110 for the first house and related appurtenances;
What does it also mean for appliances? It will mean that regardless of the house being strictly understood as walls, it will also be necessary to include in the calculation all the pertinent appurtenances (garage, outdoor spaces, etc …)
In this case, it will be necessary to know that the price-value system can be exploited to apply the tax on the cadastral value of the property.
This particular system was introduced in 2006 precisely to meet the needs of potential buyers. The price-value allows for the taxation of the transfer of properties on the basis of their cadastral value, regardless of the consideration agreed and indicated in the deed. Furthermore, this system also implies significant protection for the purchaser, as it limits the power of assessment of value by the Revenue Agency.
Is it possible in some way to lose the concessions on buying a first home?
After having carefully analyzed the requirements for requesting the tax breaks for the purchase of the first home, it is necessary, to be honest, to address the issue of the possibility of losing these benefits.
Be careful, losing these benefits could result in the payment of the “saved” figures, interest, and a penalty of 30% of the tax itself.
You can lose the benefits if:
- In the declaration on the notarial deed, you falsely claim to possess one or more requirements
- You have declared that you want to take advantage of the 18 months from the purchase for the transfer of residence and this does not happen according to the established deadlines
- Sell or donate the home within five years from the date of purchase, unless, within one year, you buy back another property (even free of charge), to be used as the main home. Close to the deadline of the year, if you find that you cannot make the new purchase, you can remedy the situation in the way just seen for the transfer of residence. Remember that by main residence we mean the property in which you or your family reside, so it is not necessary to comply with all the conditions necessary for the property to also be the first home.
Real estate brokerage and notary fees
If the negotiation is concluded through a real estate brokerage, it is good to specify that the expenses related to the commission paid to the real estate agent authorized to practice the profession, are deductible at 19% for a maximum of € 1,000 of expenditure.
This deduction affects only the buyer and in no way the owner of the house sold.
How does it work instead with regard to the much-feared notary fees? One of the burdens that often worries both buyers and sellers during a real estate negotiation is precisely that relating to notary fees.
Who pays the notary? The law in this sense is clear: the notary fees are borne by the buyer. Here then, in this case, in the general calculation of the expenses to be faced before and during the purchase of your first home, you will also have to consider the fee for the notary’s fees.
Calculating a price is almost impossible: each notary’s office deals with the subject in a different way, it will be necessary to request estimates and rely on those who are more convenient.
Regardless of the economic aspect, as regards the choice of the notary, what we recommend is of course to rely on experienced and above all, trusted professionals.
Here are all the news for the 2021 tax breaks
Restructuring bonus 2021
The new Budget Law has introduced numerous and advantageous concessions for what concerns the real estate sector.
One of the most popular bonuses is that related to renovations. Specifically, in fact, the bonuses that can be used in 2021 include excellent deductions for anyone who chooses to buy a renovated property: in fact, a deduction equal to 50% can be obtained calculated on 25% of the sale price.
The maximum value of this deduction is 96,000 euros. The deduction relating to this bonus can also be applied to the amounts paid as a deposit before the notarial deed, provided that they have been declared during a preliminary sale and have thus taken on the value of a confirmatory deposit.
It should be noted that the bonus can only be obtained if the sale is stipulated within a maximum of 18 months from the official date of completion of the work on the home.
For convenience of concept, we outline the benefits of this bonus:
- Those who buy a house and have to carry out renovations can enjoy a 50% personal income tax deduction, for a maximum spending limit of 96,000 euros. The spending limit is valid for one real estate unit only.
- All information on the renovation works must be sent to Enea. The communication to Enea must be made to allow the energy savings achieved thanks to the restructuring interventions to be checked and also assessed. For example, those who install double glazing on balconies and windows can save energy, and therefore pay a lighter bill at the end of the month. This type of intervention must be brought to the attention of Aeneas.
- Possibility to pay a reduced VAT rate, and to deduct the interest expense of the loans required for the renovation of the first home.
It is good to remember that, to take advantage of these tax deductions, it will be necessary that the building, and therefore your home, has the conditions required by the Budget Law. As already mentioned, knowing the requirements is very important to avoid having problems in the future.
Precisely for this reason, Enea (national agency for new technologies, energy and sustainable economic development) carries out checks by carrying out inspections. The sample inspections are used precisely to find any “crafty” who have declared the false to obtain bonuses and deductions in an illegal way.
Below, we list the bonuses and deductions related to energy saving for 2021, a hot topic for the sector.
- The expenses incurred for energy redevelopment of buildings are subject to an Irpef deduction of 65%. When can this type of deduction be requested? In cases where, for example, if the condominium decides to install solar panels, to install a computerized or multimedia system to control the heating systems, and in general to carry out interventions that affect the entire building.
- The interventions sustained for the energy requalification of the single apartments are subject to a deduction of 50%. This bonus concerns a whole series of works that improve the energy efficiency of the single apartment rather than the entire building. To give a practical example: this is the purchase of new windows and new fixtures, air conditioning systems, the installation of solar shading.
- As for condensing boilers, however, the deduction is only for those who have a boiler with energy efficiency higher than class A.
- For anyone who carries out work to reduce the seismic risk, the deduction on the amount spent to carry out the work is equal to 80%. The works must concern the common parts of the building.
Mobile bonus 2021: valid on the purchase of the first home
For anyone who buys a first home while respecting the requirements listed above, there are bonuses and possible deductions also for furniture and large appliances.
Let’s find out what it is.
The Irpef deduction can be requested up to 50%, for the purchase of large appliances with energy efficiency not lower than class A +, but also of furniture. Of course, both furniture and appliances will have to be used to furnish a renovated house during the current year, as explained above.
To take advantage of the concessions on all costs relating to energy efficiency, it is also necessary in this case to send communication to Enea. The communication must be made electronically and must take place within 90 days from the end of the works.
Buying your first home in 2021: now you have all the information you need
In this guide, we wanted to provide a general overview of all the possible situations you would have to deal with if you decide to take the step of buying your first home in 2021. It is clear that each situation is different and often delicate quibbles. bureaucrats can affect the success of an entire practice, making everything more cumbersome and complicated.
For this reason, in addition to being adequately informed about it, it will also be necessary to be followed by a professional in the sector, who will be able to protect you better and avoid complicating the situation, making it more streamlined and smooth.
After providing you with all the useful information about bonuses, concessions, taxes, and charges, in the last paragraph of this guide, you will find a practical example that will help you calculate the taxes on your first home, with naturally generic parameters.
What we hope, however, is to have made an often delicate subject such as taxation simpler and easier to use.
A practical example for calculating taxes on the first home
Here is a practical example that will clear your mind even more. Let’s say that Chiara and Luigi have chosen to buy an apartment in Trieste, the city in which they reside, from a private seller, and that the cadastral value of this property is € 1,000. The price agreed for the operation is instead of € 250,000.00.
How to calculate taxes?
It is necessary to re-evaluate the cadastral income by 5% and multiply by 110, therefore: 1.000 x 1.05 x 110 = 115.500. Then the registration tax will be calculated on the cadastral value (2%) and the mortgage and cadastral taxes of a total of 100 euros (50 euros each) will be added: (115,500 x 2%) + 100 = 2,410 euros. In this case, as you have already understood, the price paid for the purchase of the property does not affect the calculation.