First Home Tax Benefits for Italians Abroad: New Rules

The Italian prima casa (first home) tax regime has been tightened. Decree-Law No. 69/2023 (Salva-Infrazioni) removed the automatic tax breaks for citizens living abroad and registered with AIRE (the register of Italians abroad). Under the new rules, you must prove a 'substantial tie' to the town where the property is located to qualify for the 2% registration tax or 4% VAT.

The law generally requires you to have lived or worked in Italy for a total of at least five years before moving abroad. This five-year period creates the necessary link to the territory.

A recent ruling by the Agenzia delle Entrate (Tax Office), Response to Interpello No. 312/2025, has broadened the definition of 'activity.' The Tax Office now accepts that years spent in the Italian school and university system (percorso scolastico e universitario) count toward the five-year requirement. This is a significant move away from the older, more restrictive views that only recognized professional work.

The tax benefits are strictly limited to non-luxury homes. Properties in cadastral categories A/1 (stately homes), A/8 (villas), and A/9 (castles) do not qualify, even if the buyer has historical ties to the town.

If the five-year tie can be proven, the standard requirement to move your residency to the town within 18 months is usually waived for those living abroad. This makes it a powerful tool for expatriates looking to buy a home in their place of origin.

PWJennings provides technical oversight for these purchases, ensuring that the historical records of study or work are legally sufficient to withstand a tax audit.