Buying your first home is often a significant step in the lives of many individuals and families. It is important to know the new rules
A recent ruling by the Court of Cassation has revolutionized the rules relating to tax breaks related topurchasing your first homepaving the way for important changes in the process of applying for VAT relief.
Buying your first home often represents a significant step in the lives of many individuals and families, a moment that brings with it emotions, hopes and, of course, many decisions to make. In a context where the real estate market can seem complex and changeable, it is essential to be well informed and prepared before embarking on this important journey.
First home: VAT rules change
One of the first considerations to keep in mind concerns the regulations and tax breaks linked to the purchase of your first home. In many countries, there are specific rules and incentives for those who are buying their first home. These benefits may concern reduced VAT, exemption from certain taxes or the possibility of accessing subsidized financing.
The ruling we are talking about today represents an important clarification for those who are thinking of buying their first home, offering greater flexibility on the moment in which declare the requirements for the reduced VAT. Buyers and builders will now be able to enjoy greater flexibility in this process, thanks to the new interpretation provided by the Court of Cassation.
Until recently, it was widely accepted that in order to take advantage of the reduced VAT, it was necessary to declare that the requirements were met at the time of signing the preliminary purchase contract. However, sentence no. 9084 of 5 April 2024 of the Court of Cassation introduced a new perspective on this practice, significantly simplifying the procedure to obtain the tax advantage.
The ruling arose from a case in which a construction company received a notice of assessment for direct taxes, VAT and sanctions, concerning the application of the VAT rate to advance payments received on the basis of preliminary contracts for the sale of properties. The Regional Tax Commission had previously excluding the application of reduced VAT on these advances, underlining the lack of an explicit declaration in the preliminary contracts.
The construction company took the case to the Court of Cassation, arguing that the absence of a declaration in the preliminary contracts should not preclude automatically the possibility of taking advantage of reduced VATprovided that this is declared in the definitive purchase deed.
The Court of Cassation approved this thesis, thus establishing an important precedent. According to the ruling, if at the time of signing the final purchase deed the requirements for the relief are present and the buyer explicitly declares that he possesses them, the advance payments or deposits paid previously must be subject to the reduced VAT rate.
In other words, the law does not provide sanctions for buyers which they declare to meet the requirements only at the time of conclusion of the contract definitive, provided that what is stated is actually true.
