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First and second home. What you need to know about taxes, concessions and bonuses

Often those who come to the agency to buy a house still have a bit of confusion in understanding the differences distinguishing the first home from the second home. We will talk about it in this article where you can find a clear distinction between the two, both from a practical and tax point of view, and also some clarifications on first home benefits.

Differences between first home and second home

Let’s start by clarifying the definition of first home. The first home is the home where a family or individuals reside. Residence, therefore, is an indispensable condition that defines the property as a first home, while it has nothing to do with a temporal connotation. In fact, before the first home, it is possible that you may have already purchased another property for residential use. This does not prevent the second home purchased in chronological order from becoming the first home if you move your residence.

But now we come to the tax differences. In the case of purchasing the first home, the tax register amounts to 2% of the cadastral value, otherwise in the case of a second home that raises to 9%.

In the case of first home purchase from a construction company, the VAT to be paid – as an alternative to the Tax Register – is 4% of the price of the dwelling, and 10% in the case of second home purchase.

When you can take advantage of the first home benefits

Let’s see the cases in which it is possible to take advantage of the benefits regarding the purchase of the first home.

If I have inherited a house in which I reside, can I buy my first residential property taking advantage of the first home benefits? Yes, as long as you move your residence there, and then live in the purchased house. Having bought a property for the first time, in fact, does not make that property a first home.

Let’s say that I live and reside in a house purchased with the first home benefits and now I would like to rent it to buy another house where I can live. Could I take advantage of the tax breaks again for the purchase of the house? Yes you could but only by selling the first house, or committing to sell it within a year. In case you do not comply with this condition, you would have to pay the difference in taxation and also penalties, unless you repent before the deadline expires.

Is the first home under 36 bonus still valid?

People under 36, who plan to buy a house, still have the option to take advantage of the first home under 36 bonus. The first home youth mortgage 2021 has in fact been extended until December 31, 2023. The requirements to access the bonus are under the age of 36 and an ISEE not exceeding €40,000.

Live the thrill of buying your first home to the fullest

Buying a home is one of life’s most exciting milestones, but also one of the most challenging. To enjoy the beauty of this experience, turn to real estate professionals. If you are planning to buy a house in Gaeta or in neighbouring towns, do not hesitate to contact us!