Buying and selling your first home in 2023
The purchase of the first home is an important moment for many people, it somehow sanctions the transition to adulthood and sometimes coincides with “starting a family”; for many it also converges with doing the “accounts” and evaluating, for example, the hypothesis of taking out a mortgage. Surely it is a relevant existential passage and it is necessary to put ourselves in the hands of experts and Real Estate agencies that can accompany us in the right choices and move with familiarity to the bureaucracy of the Sector.
The State, among the various benefits provided with the 2023 Budget Law, introduces new important innovations intended to favor those who intend to buy (or sell) their first home.
Let’s see together what they are by first making a brief excursus on what is meant by first home. First of all, we refer to a property intended for residential use that is part of the cadastre of classes A (at the bottom are shown the classes A excluded), therefore all properties belonging to different categories are excluded. To take advantage of these benefits you must not be the owner of another property in the same municipality and neither must you have property rights (use, usufruct, dwelling or bare ownership, on another property purchased, even by your spouse, benefiting from the facilities for the purchase of the first home). Since 2016, tax aid is also intended for those who already own a property purchased with the benefits, but provided that the property has been sold within a year of the new purchase, at the end of the article we will see how this condition has actually been extended for at least 2023.
Below are the 2023 state benefits:
Taxes and VAT due*
- If the seller of the property you intend to buy is a private individual or a company with VAT exemption, VAT is obviously not applied and the registration tax will be 2% instead of 9% on the value of the property while the cadastral tax and mortgage tax are fixed and each of 50 euros.
- If the seller is a company that imposes VAT, the latter will be paid at 4% instead of 10% and the registration tax, cadastral tax and mortgage tax are fixed and each of 200 euros.
Examples of first home purchase on a property worth € 90,000
- A: Registration tax = € 1,800 + 50 + 50 = Total € 1,900
- B: VAT at 4% = € 3.600 + 200 + 200 +200 = Total € 4.200
As can be seen, the tax benefit compared to the purchase of a second home is considerable if we consider that in this case in hypothesis A 8,200 euros would have been spent and in hypothesis B instead 9,600 euros.
* Examples given They are purely indicative as depending on the case and the tax position of the sellers/buyers, taxes can be applied on the factors of the value price or on the cadastral price, as well as other taxes in the case of luxury properties (VAT at 22%), rather than appurtenances in reference to the properties and related cadastral values. To be sure not to incur even important administrative sanctions, it is advisable to contact only tax consultants and competent real estate agencies.
As mentioned at the beginning of the article, the tax breaks on the first home do not apply to cadastral categories belonging to:
A/1 > Stately properties
A/8 > Villas properties
A/9 > Real Estate in castles or historic or artistic buildings
For the under 36 there are also additional advantages:
With circular no. 12 / E of 14 October 2021, the Revenue Agency provided the first indications on the use of the first home bonus for the under 36 then confirmed and with the last expiry date of 31 December 2022, but with the new Budget law this year an extension until 31 December 2023 was introduced ; in addition to the age (36 years not completed at the time of the deed), you must necessarily have an ISEE of less than 40,000 euros. To those entitled to this facilitation, the taxes of: register, mortgage and cadastral will be completely reversed even for acts subject to VAT. Finally, a tax credit is also recognized in case of purchase subject to VAT. The Under 36 can also take advantage of the First Home Bonus under 36, a facilitation for access to the mortgage up to 80% thanks to a state guarantee fund; this fund, it should be emphasized that it has existed since 2013, but only recently have the procedures (and requirements) been simplified to be able to access it.
DECREE 1000 EXTENSIONS 2023
- On 24.2.23 the decree 1000 extensions for 2023 was signed and valid until 31 October 2023. This decree provides, among the various extensions in different areas and sectors, also two important innovations regarding the timing of transfer of residence to the address of the property purchased and an extension of timing on the sale of the first home. Therefore, the term to transfer the residence ranges from 18 months up to a maximum of 37 months (the timing also varies according to whether you buy with or without a mortgage); The term for the sale of the first home and the repurchase of a new first home instead passes from 12 months to a maximum of 2 years and seven months.
Although there is more time for the transfer of residence, rather than for the sale and purchase of a new first home, it is very important to rely on expert consultants to evaluate the right timing on a case-by-case basis and not incur penalties or even worse having to return the tax advantages received, if bureaucratic actions have been omitted.
We conclude this article by recalling that since 2013, the Municipal tax or the imu on the first house is not paid, with the exception of classes A / 1-A / 8-A / 9 (in this case a reduced rate and a deduction of 200 euros are applied).
Gaiezza Real Estate remains available for further information and for those who wish, estimate a free consultation.
Article written by Mariateresa Confalonieri