Italy Tax Agency Clarifies First-Home Tax Credit Limits, Relief on Replacement Home Purchases

The Italian Revenue Agency June 4 issued Letter No. 117/2026, clarifying the 2 percent reduced registration tax and tax credit for first homes. The taxpayers, individuals, purchased a home in 1986 and an adjacent property in 2004, which were later merged. The taxpayer intended to purchase a new home in the same municipality and sell the existing property within two years. Upon review, the Revenue Agency clarified that: 1) the first-home benefit may be claimed twice, even in the same municipality, provided the previously owned property is sold within two years; 2) the relief also applies to merged dwellings acquired ...