First Home 2025 Budget Law
Guide to Tax Benefits for First Home Purchases in 2025
The 2025 Budget Law has introduced significant new measures regarding tax benefits for purchasing a first home. These changes aim to boost the real estate market and facilitate transitions to a new primary residence.
Extension of the Deadline for Selling the Previous First Home
One of the most notable changes is the extension from one to two years of the period within which homeowners can sell their previously purchased property while still retaining first-home tax benefits on a new purchase. This modification provides taxpayers with greater flexibility when transitioning between homes.
Tax Benefits for First Home Purchases
The tax benefits for purchasing a first home include:
• Reduced registration tax: 2% instead of the standard 9% for purchases from private sellers.
• Lower VAT rate: 4% instead of 10% for purchases from construction companies.
• Fixed mortgage and cadastral taxes: €50 each for purchases from private sellers; €200 each for purchases from businesses. (agenziaentrate.gov.it)
Eligibility Requirements for Tax Benefits
To qualify for first-home tax benefits, buyers must:
• Not own another home purchased with the same tax benefits anywhere in Italy.
• Commit to selling their previously acquired home with benefits within two years of the new purchase.
Tax Credit for First Home Repurchase
The law provides for a tax credit for those who sell their first home and purchase another within one year. This credit is equal to the registration tax or VAT paid on the initial purchase and can be used to offset registration, mortgage, cadastral, or IRPEF (income) taxes. Notably, despite the extension to two years for selling the previous home, the deadline for utilizing the tax credit remains one year.
First Home Mortgage Guarantee Fund
The 2025 Budget Law has extended the First Home Mortgage Guarantee Fund until December 31, 2027. This fund provides guarantees covering up to 80% of the loan principal for priority categories, including:
• Young couples
• Single-parent households with minor children
• Individuals under 36 years old
• Tenants of public housing
• Those with an ISEE (Equivalent Economic Situation Indicator) of no more than €40,000 per year.
The updates introduced by the 2025 Budget Law are designed to make buying a first home easier, offering greater flexibility and financial support to taxpayers. These measures aim to stimulate the real estate sector while ensuring homebuyers benefit from significant tax advantages.
