Selling a house before 5 years

Sell home before 5 years: you can

If someone has told you that it is impossible to sell a house before 5 years, know that this is not true. There is no law prohibiting the resale of a newly bought home. If from a legal point of view it is an absolutely lawful practice, however, one must know the relative tax legislation. And here the main problems arise, related exclusively to the so-called "first-home bonus".

Because if you have not benefited from this bonus, there is no consequence or additional tax to be paid.

First-home bonus: what it is and what it does

To facilitate the purchase of the first home, there are very advantageous tax benefits. The first home bonus reduces the registration tax (calculated on the cadastral value) to 2% (from 9%) in the case of purchase from private individuals, and reduces the VAT to 4% (instead of 10%; for A1 properties, A8 and A9 VAT is 22%) when buying from a company with sales subject to VAT. To benefit from it, there must be requirements relating to properties (it must not be luxury, or registered in categories A1, A8 or A9).

And, above all, relating to the buyer: he must reside in the municipality where he buys the property (or make the transfer within 18 months from the deed), he must not have other properties in the same municipality (if in possession, even of shares, he must first sell them) and not even in other municipalities of the Italian territory (otherwise, it has one year from the deed to sell them)

Home and sales bonus before 5 years: what you need to know

If you have purchased a house benefiting from the first house bonus, you must wait 5 years before reselling it. Otherwise, it will be necessary to pay the taxes saved at the time (the difference between those actually paid and those that should have been paid without bonuses) and the relative penalties (30% applied on the unpaid taxes).

To avoid this heavy financial outlay, there is an exception, which consists in the sale of the first house and the subsequent acquisition of a first house within a year. Alternatively, and always within one year of sale, it is possible to purchase land to build a building (not falling into the cadastral categories A1, A8 and A9) to be used as a main residence. It is not necessary for the building to be completed: it is sufficient that the same, within a year, acquires relevance from the urbanistic point of view.

A second way instead allows you to save only 30% penalties. To do this, the buyer must notify the Revenue Agency before a year has elapsed, requesting the re-liquidation of the tax.

Are you looking for specialized advice to sell or buy your home? Choose a competent Treviso real estate agency that can guide you step by step. Choose Engel & Völkers.