Prima casa relief for foreign buyers: the residence test

The test, step by step

The Agenzia delle Entrate’s guide to buying with the relief sets three groups of conditions: the cadastral category of the home, its location relative to the buyer, and the buyer’s own situation. This guide deals with the second and third.

Location. The home must be in the municipality where the buyer has their residence. If the buyer lives in another municipality, they must transfer their residence to the municipality of the home within 18 months of the purchase, and the declaration of intent must be in the deed, “on pain of forfeiture”. The move counts from the date you file the transfer declaration with the municipality.

Three alternatives to residence. The relief is also available when the home is in the municipality where the buyer carries out their activity (even unpaid: the guide’s examples are study, volunteering and sport), or, under art. 2 of D.L. 69/2023, in the municipality of birth or of earlier residence or activity, for a buyer who moved abroad for work after living or working in Italy for at least five years. The Agenzia clarified in circular 3/2024 that this covers any kind of employment relationship, that it must already exist when the property is bought (a move abroad after the purchase does not give access to the relief), and that the five years need not be continuous. Armed forces and police personnel do not need to live in the municipality.

What this means for a foreigner.

The guide has no separate rule for other nationalities, so the practical question is whether you can lawfully establish residence. For an EU citizen, the Interior Ministry’s page says the right to stay more than three months is open to people who work in Italy, who have sufficient resources and comprehensive health insurance, who study with the same cover, or who are family members of such a person. For a non-EU citizen, the national council of notaries refers to a valid residence permit or long-term residence permit. If you cannot meet those conditions, you may not be able to register residence, and then you cannot count on the 18-month route. Ask the municipality’s registry office what it requires before you sign.

The other conditions the guide lists

• Cadastral category: A/2 to A/7 and A/11. The relief is not available for A/1, A/8 or A/9. One appurtenance per category C/2, C/6 and C/7 can also benefit if it serves the home durably.
• No other home in the same municipality bought without the relief, even if you promise to sell it within two years.
• No other home elsewhere in Italy that you bought with the relief, unless you sell it within two years of the new purchase (the term was extended from one to two years by L. 207/2024, art. 1, c. 116, for deeds from 1 January 2025).
• Declarations in the deed: you must expressly declare that you have the prima casa requirements.

What the relief is worth

The two sets of taxes, from the Agenzia’s tables, for a purchase from a private seller:

Calculation on a €300,000 home: the registration tax is 9% = €27,000 with no relief and 2% = €6,000 with it, a difference of €21,000. For a builder’s sale with VAT, the VAT is 4% instead of 10% and the other taxes are €200 each in both cases (the 22% rate applies to A/1, A/8, A/9, which cannot have the relief). The loan taxes also change: see mortgages for non-residents.

How the relief is lost

The Agenzia lists the main causes of forfeiture: false declarations in the deed; selling or donating the home before five years have passed from the purchase, unless a new home is bought within one year; and not selling the previous relief home within the term. The consequences: you owe the taxes saved, interest, and a penalty of 30% of those taxes. On the €300,000 example, the saved registration tax is €21,000 and the 30% penalty is €6,300, before interest (a calculation on the official rates).

For the foreign buyer the typical risk is the 18-month residence. The guide says:

• If the 18 months have not yet passed and you cannot honour the commitment, you can revoke the declaration in the deed and ask for the tax to be recalculated, by filing a request at the office where the deed was registered. The office recalculates, issues an assessment with interest from the deed date, and does not apply the 30% penalty, because within the 18 months you cannot be blamed for missing the commitment.
• If the 18 months pass with no move and no request, the relief is lost, though you can still use the voluntary-correction procedure (ravvedimento operoso) before any assessment is notified.

If you sell and buy again

A person who sells a relief home and buys another within a year gets a tax credit equal to the registration tax or VAT paid on the first purchase, capped at the tax due on the second. The guide adds that the relief is not lost if, within a year of selling, you buy a property in another country, provided there are administrative-cooperation tools to check that it is used as your habitual home. This matters for expatriates who move between countries; check the case with the notary.

Which professional to consult

The notary drafts the residence declaration and the prima casa statements and is the right person to say whether your facts fit. The municipal registry office (not a Payotte category) decides whether you can register residence. A real estate agent or surveyor can confirm the cadastral category before you make an offer. See notaries, real estate agents and surveyors. Payotte does not list or rank notaries. For the wider tax picture, read the prima casa tax benefits explained.