The "Prima Casa" special tax regime offers reduced taxes for property purchases meeting specific criteria. These benefits apply when:

  1. The property belongs to certain cadastral categories.
  2. The property is located in the municipality where the buyer resides, intends to establish residency, or works.
  3. The buyer meets specific requirements.

Reduced Taxes

‍When buying under the "Prima Casa" benefits, the applicable taxes are:

If the seller is a private individual or a VAT-exempt business:

  • Proportional registration tax at 2% (instead of 9%)
  • Fixed mortgage tax of 50 euros
  • Fixed cadastral tax of 50 euros

If buying from a business with VAT:

  • Reduced VAT at 4%
  • Fixed registration tax of 200 euros
  • Fixed mortgage tax of 200 euros
  • Fixed cadastral tax of 200 euros

Note: The proportional registration tax (2%) cannot be less than 1,000 euros, but the actual amount paid may be lower due to prepayments or the first home purchase tax credit.

Taxable Base Calculation

‍For purchases without VAT, the price-value mechanism applies, where the cadastral value is determined by multiplying the cadastral income (increased by 5%) by the coefficient 110.

Example: Suppose a property, purchased under "Prima Casa," has a cadastral income of 900 euros and a paid consideration of 200,000 euros. The taxable base for the 2% registration tax would be 103,950 euros (900 x 1.05 x 110), resulting in a registration tax of 2,079 euros (103,950 x 2%).

Requirements for Benefits

‍To qualify for "Prima Casa" benefits, the property must be in specific cadastral categories. Additionally:

  1. The buyer must be a private individual.
  2. The property must be for residential use.
  3. The buyer must explicitly request the price-value mechanism during the property transaction.
  4. The transaction details and purchase price must be specified in the contract.

Maintaining Benefits for Previous Homeowners

‍Since 2016, individuals owning a property with "Prima Casa" benefits can enjoy them again, provided they sell the existing property within a year of the new purchase. This extension also applies to gratuitous acquisitions (donation or inheritance).

Tax Credit for Reacquiring "Prima Casa"

‍Selling a property purchased with "Prima Casa" benefits and acquiring another within a year entitles the seller to a tax credit equal to the registration tax or VAT paid on the first purchase. This credit can be applied to reduce various taxes or used for compensation.

Avoiding Penalties

‍To avoid penalties or reduce them, follow these steps:

  1. Declare the intention to transfer residency within 18 months if unable to fulfill the commitment.
  2. If you can't meet the commitment, revoke the declaration within 18 months and request a tax reassessment.
  3. Utilize the "ravvedimento operoso" (penalty reduction) for late payments if not yet subject to an official notice.

At Move To Dolce Vita, we are not just your guides through the intricate landscape of Italian real estate but your dedicated partners in the journey. As a leading tax and legal firm, our commitment extends beyond mere assistance—we provide comprehensive support throughout the entire process of purchasing your dream home. From preliminary tax estimations to navigating the intricacies of the "Prima Casa" special tax regime, we ensure that every step is seamless and in compliance with Italian regulations. Our team of experts is ready to offer tailored solutions, ensuring your real estate experience is not only rewarding but stress-free.

Trust Move To Dolce Vita for a personalized, end-to-end service that turns your dream of owning an Italian property into a reality. Welcome home!