Are you thinking of buying your first home, and you want to understand when and how to pay the registration tax? If so, you’ve come to the right article, because here we explain everything you need to know about first home registration tax.
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1. What is the First Home Registration Tax?
The registration tax is an indirect tax, payable to the state for the registration of any type of deed, both public and private. The amount of the tax is calculated on the basis of percentage rates, which are applied to the value of the contract.
If you are buying your first home, the registration tax will be paid on the value of the property, since the value expressed in the contract is precisely the price you pay to obtain ownership of the apartment.
2. What is the First Home Registry Tax Rate?
If at this point you are already starting to worry about all the money you will have to spend, in addition to the mortgage and notary fees, we have good news. There are various concessions on the first home, and some of these concessions also concern the registration tax.
If you buy a house from a private individual, the registration tax rate is 2%. If this rate still seems too high to you, consider that it is a reduced rate. In fact, until 2013 the rate was 3%.
This rate is also lower than the rates due for those who buy a house from other subjects. If you buy a house from a company with sales subject to VAT, in fact you will have to pay 4% of the price of the property.
These are also reduced rates compared to the rates for second homes. If you want to make a comparison, to understand how much you save, read our article on the registration tax on the second home.
3. Who is entitled to the benefits on the first home?
You are entitled to benefits on the purchase of your first home if you answer yes to each of the three questions below:
- are you buying a civil type home, or alternatively one that falls into the categories of economic, popular, ultra-popular, rural, detached houses, or in the category of homes and lodgings typical of the places?
- Is the house located in the territory of the municipality where you have established your residence?
- Don’t you own any other property, not even co-owned, or by way of usufruct, use or home, or bare ownership?
If you answered yes to all the questions, you are entitled to the benefits on the first home. If you answered no to even one of these questions, unfortunately you will not be able to access these benefits, and therefore the registration tax to be paid will be calculated differently.
To know the rates that apply in your case, we recommend that you read our article on the registration tax on the second home.
4. I am buying a new house, and soon after I will sell the old one. Can I access the Registration Tax Benefits?
Yes, because you actually only own one house. The concessions on the first home, which also cover the registration tax, also apply to those who:
- is already the owner of a property, purchased with the benefits for the first home?
- is buying a second home
- will sell the old house within 12 months of purchasing the new property
5. I have received an Inheritance Apartment. What is the Percentage of the Registration Tax?
If you have received an apartment as an inheritance, you will be able to pay the registration tax in the amount of 2%. Also in this case the concessions provided for the first home apply. So within 12 months you will have to:
- sell the property you received as a donation
- sell the property where you live now
6. I received an apartment as a donation. How do I calculate the registration tax?
In the case of free donations, the tax must be calculated at the rate of 2%, provided that you:
- sell the property received as a donation within 12 months
- sell the property where you live within the same period of time
7. What Happens If I Can’t Sell the Property Within 12 Months?
Unfortunately, this is an eventuality that can happen, given the crisis in the real estate market. In general, in the deed of sale of the new apartment, or even in the declaration of succession or in the deed of donation, we undertake to sell the house within one year.
If this does not happen, unfortunately the benefits on the registration tax are lost. So you will have to pay the registration tax for second homes, and also pay a fine of 30%. The only way to avoid paying the penalty is to immediately declare the forfeiture of the concession to the Revenue Agency.
So as soon as you realize that you will not be able to sell your first home within a year, you will have to immediately file an application at the Revenue Agency office where you registered the purchase agreement. You will still have to pay the registration tax for second homes, plus interest. But at least you will avoid the 30% penalty.
8. What Happens If I Sell My First Home, and Buy Another Within 12 Months?
If you have sold your first home, to buy another within 12 months, you will be entitled to a tax credit. The tax credit is equal to the registration tax you paid on the purchase of your first home. You can use this tax credit:
- to reduce the amount of registration tax payable on your new first home
- to reduce the amount of mortgage tax, or other taxes
- to reduce personal income tax, or even other taxes to be paid with the F24 model
The code to be used to enjoy the tax credit is the tax code 6602.
9. What happens if I give the property in exchange?
The rules that we have summarized for you above apply not only to traditional buying and selling, but also to real estate exchange.
10. I was told that the registration tax is also due on the preliminary sale. It is true?
Yes. The preliminary sales contact must in any case be registered within 20 days of signing. Therefore, the registration tax will also be paid on this contract. On the preliminary, however, a registration tax of a fixed amount of 200 euros is due, regardless of the price of the property.
But be careful, because this rule is valid only if the preliminary sale does not provide for any payment. If the transfer of a sum takes place both as a confirmatory deposit and as an advance on the price of the apartment, the registration tax is due on these sums. Here are the rates
- on the sums paid as a deposit, a rate of 0.50% is applied
- on the sums paid as an advance, a rate of 3% is applied
The amounts of the registration tax on the preliminary sale of the first home will be deducted from the registration tax that you will pay at the conclusion of the final contract.
In some cases, these amounts can even be repaid. This is the case in which the registration tax you paid for the confirmatory deposit or even for the down payment is higher than the tax to be paid for the definitive contract.
11. What happens if the preliminary procedure concerns a contract subject to VAT?
If you are buying a house from a company with sales subject to VAT, for example a construction company, the registration tax on the preliminary sale is as follows:
- if you pay a deposit on the price of the property, the registration tax on the preliminary is due in the fixed amount of 200 euros
- on the confirmatory deposit the registration tax is calculated proportionally, applying a rate of 0.50%
12. How do you pay the registration tax?
The registration tax must be paid directly to the notary, at the time of the deed. Your notary will then pay it to the state.
In this article, we’ve answered the 12 most common questions about first home registration tax. The Gromia Blog offers useful information for those seeking to navigate the real estate and rental market. If you have any other doubts, or even if you need tax or legal advice, contact your accountant or even your trusted lawyer.