3300 Non-resident becomes resident.

Hi,

Lots of great info on the threads, but one aspect which I can't find an answer to is the following (the reverse to many other posts);

If I buy a property and declare that I'm not resident but then (say within 18 months) do become resident, can I get a refund of the excess taxes I paid as non-resident?

Here's the background: We're going to buy a house, and it's one that we're planning to make our primary home, though the exact timing of making it our primary home is uncertain (could be years away). Tempting as it is, we've opted to decline any tax avoidance attempts (becoming residents) and are braced for the full taxes due. However, since the taxes do add up to a considerable sum and there is just a chance that we will become resident within 18 months of purchase, I'm wondering what my options might be?

Loads of related questions to follow.

Category

Legal

Why not declare you will become tax resident, and then if you do not you can pay the excess. The extra money is likely to come in handy if, for example, you plan to make any alterations or restoration.

If you do need to become resident it will have to be in time for the 18 month rule so make sure you apply to the questura in plenty of time for your Permesso di Soggiorno as you will need this to register as resident in your comune.

All the best

We'd thought of that (still considering even) but we'd been told that the fines for under paying the tax were rather heavy - 30% of the tax difference.

Have we been misinformed?

The lower tax rate is for 'Prima Casa'. Many Italian married couples take advantage of laws in Italy that enable husbands and wives to own assets seperately, by citing one home as the primary residence of the husband and a second home as that of the wife. It matters not a jot that they occupy either of the two homes together most of the time.

You may be able to qualify for the lower rate by buying the house in the name of just one of you (if you are a couple) and only that person applying for residence.
The purpose of the 'residence' status is not to force you to live in the house for any particular period of time. Rather, its to prevent you claiming Prima Casa discount on a number of different homes dotted around Italy.

Interesting.

We had in mind doing something like that, but with a busy life, limited time at the hose etc etc it didn't look overwhlemingly possible. That said, we're still giving it some thought (taking some time of work could still be cheaper than paying the tax).

On a related topic, if we did go for residency and if the house was then rented (say within a year of purchase) would it still qualify as a prima casa?

To tell you the truth, we're a bit frustrated that we don't seem to qualify for prima casa status - currently we're working overseas (where we're renting) and this Italian house would to us be our prima casa, even though we may not be able to secure residency convincingly.

If anyone can suggest anything or a workaround I'd be glad to hear the ideas.

The plot thickens... I've just read on a web-site:

In order to benefit by the tax concessions "first home", it is necessary to satisfy the following conditions:

If the purchaser is an Italian citizen emigrated abroad (registered to the Aire), the purchased real estate must be the "first home" owned by the purchaser on the Italian territory.

My wife has Italian citizenship so maybe this applies?

But what is Aire?

Thoughts appreciated,

If you are an Italilian citizen and do not live in Italy you are supposed to be registered with AIRE ( . . . .Italiani Residenti Esteri). This can be done with the consulate in your area.

As for "first house" This really is a misnomer. It is not the first house that you ever buy but the main residence. You could have 10 houses and claim that the fifth one that you buy is your prima casa and use the lower tax rate for that one as long as you get residence for it. You can also sell your prima casa, and buy a new one and claim that as prima casa. If you sell within 5 years though you have to buy within 1 year or have to pay back the difference in the prima casa tax rate.

[QUOTE=Italyinourhearts]If the purchaser is an Italian citizen emigrated abroad (registered to the Aire), the purchased real estate must be the "first home" owned by the purchaser on the Italian territory.[/QUOTE]

I think you may be referring to a regulation which allows Italian citizens who are resident abroad to skip the residency requirement when they get Prima Casa discount on a home in Italy. (I wonder what the EU commisioners would have to say about that?!) If your wife has Italian citizenship, you could certainly invoke it. In any event, I think the fact that you are renting the only other home you live in, rather than the owners of it, certainly reinforces your case for your Italian home being your Prima Casa. The thought that you would choose Italy as the the only place in the world to own a home would surely melt the heart of the hardest tax officer!

[QUOTE=Marc]The lower tax rate is for 'Prima Casa'. Many Italian married couples take advantage of laws in Italy that enable husbands and wives to own assets seperately, by citing one home as the primary residence of the husband and a second home as that of the wife. It matters not a jot that they occupy either of the two homes together most of the time.

Are you sure Marc? Here is one of the requisites for prima casa tax relief:

"di non essere titolare, neppure per quote o in comunione legale, su tutto il territorio nazionale, di diritti di proprietà, uso, usufrutto, abitazione o nuda proprietà, su altra casa di abitazione, acquistata, anche dal coniuge, usufruendo delle agevolazioni per l’acquisto della prima casa;"

Sarah

[QUOTE=Italyinourhearts]We'd thought of that (still considering even) but we'd been told that the fines for under paying the tax were rather heavy - 30% of the tax difference.

Have we been misinformed?[/QUOTE]

No, you are correct. Even if you withdraw from the tax relief within the 18 month period you will have to pay a fine and find yourselves having to stand in lots of queues and be bounced around from office to office. My recommendation is not to try to claim tax relief unless you are absolutely certain you will become residents within 18 months. Don't try any funny business or try to play the system because it will backfire. As far as I know you cannot claim back the taxes if you actually do become resident within 18 months (in answer to your original question), someone please correct me if I'm wrong.
Sarah

Great - thanks for all the replies.

The citizenship avenue looks like a potential way forward - I've already been in touch with our local consulate (Houston, Texas) and await their advice.

If that is a non-runner then it looks like we'll just have to stump up the tax - which including the mortgage tax becomes quite a hefty bill...

Hopefully the citizenship rules will work out. Does anyone have any experience of how that works in practice?

[QUOTE=gardahomes]Are you sure Marc? Here is one of the requisites for prima casa tax relief:

Sarah[/QUOTE]

I agree that the wording of the phrase rules out the use of a house owned by a spouse, but I think that this is one of the cases where the law turns a blind eye.

I think the salient words here are [b]'neppure per quote o in comunione legale'[/b] (trans. = neither as owners of a share, or as joint owners) When couples get married here, they can elect to share their property, or to hold their assets seperately. The financial separation is usually invoked to protect someone who might have a stake in a family business (or more accurately, to protect their family) from the devious ploys of a capricious lothario or floozy.

When my wife and I got married, we elected for 'bene in comunione'; the Italian equivalent of 'all my worldy goods I share with thee' (through, with the benefit of hindsight, I would certainly have elected for a clause exempting the TV remote control), which would rule-out our claiming Prima Casa on a second home. Both of our nearest neighbours though, are Italian and use their homes here in Umbria as holiday homes, whilst their main homes are in Roma and Napoli respectively. I wouldn't dream of asking them which route they took when they got married, but suffice to say that both homes are in the name of the wife only and their I.C.I. bills arrive in the wife's name (we collect their mail for them, in their absence) I'd be most surprised if Mr Berlusconi didn't have the same arrangement for his pad on the Costa Smeralda.

In any event, its interesting to read that exclusion from Prima Casa discount only applies to second (and subsequent) homes owned on Italian territory. Presumably, one is free to own homes dotted around the world and still have one in Italy that is eligible for Prima Casa discount. So much for soaking the rich!

[QUOTE=Marc]

[QUOTE=cristina]If you are an Italilian citizen and do not live in Italy you are supposed to be registered with AIRE ( . . . .Italiani Residenti Esteri). This can be done with the consulate in your area.[/QUOTE]

I've just been re-reading the document regarding Prima Casa, and it seems that it is not necessary to be registered with AIRE to claim Prima Casa; as with many things nowadays, its possible to self-certify;

[indent][i]La condizione di emigrato all’estero non deve necessariamente essere documentata con certificato di iscrizione all’AIRE (anagrafe italiana residenti all’estero), ma può essere autocertificata dall’interessato mediante dichiarazione resa nell’atto di acquisto ai sensi dell’articolo 46, d.P.R. 28 dicembre 2000, n. 445, recante disposizioni in materia di “Dichiarazioni sostitutive di certificazioni” (v allegato n. 3).[/i][/indent]

For anyone who wants to read the whole shebang relating to Prima Casa, I've posted it here as an Acrobat document (306 fun-filled kilobytes)

[url]http://www.itili.com/prima_casa.pdf[/url]

Would anyone like to spend a rainy afternoon translating that?

Quote from your earlier post.

I'm waiting for CJ to drop in on this thread, but my reading of the clause you quote above is that one cannot claim agevolazione prima casa if you could be considered usufruttario of a prima casa bought by your spose. Nothing about regime di separazione dei beni - but maybe this comes further down the paragraph which you quoted?

Yes, CJ, where are you when we need you??
:D
Also, where does the "stato di famiglia" come in? Surely spouses officially residing in two different houses would have to declare in the stato di famiglia, at the comune, that they are not living together. And if kids are involved that could get tricky in the event of future separation... Or is my mind spinning off too wildy at a tangent here?

Hi, intersting discussion opening up.

On the topic of an ex-pat citizen being able to claim the prima-casa exemptions, the process is (seemingly) simple:

To quote from the consulate:

"When your wife.... will register in our Anagrafe Consolare and we will send the request to your Municipality in Italy for the registration in the "AIRE" (albo italiani residenti all'estero).

Can it really be this simple?

It is, not only will she qualify for the reduced rate of purchase tax but also the reduced rate of ICI (council tax) and the lower rate for electricity.

Susi

Amazing... talk about good luck.

As is common, we've fallen for a house that's more expensive than we first bargained for, but this tax-break really makes a difference.

It's the second bit of luck we've had - only a few weeks ago did we stumble into the valore castale changes for the tax basis.

Very happy :)

Just a wee note of caution - how big is the house? I think if its more than 240 sq metres you do not get the residents tax discount as its considered a luxury house. Thats what happened with us a year ago though as ever the rules may have changed...

Marina

[QUOTE=Relaxed]"di non essere titolare, neppure per quote o in comunione legale, su tutto il territorio nazionale, di diritti di proprietà, uso, usufrutto, abitazione o nuda proprietà, su altra casa di abitazione, acquistata, anche dal coniuge, usufruendo delle agevolazioni per l’acquisto della prima casa;"

Quote from your earlier post.

You may be right, Relaxed. I'm only speaking from observation, then trying to find the law that ratifies what I see happening. The way I read it though is that, as long as you fulfill the condition of not being in [i]'comunione legale'[/i] (at least as regards material goods) with your wife by electing for [i]separazione di bene[/i], non of the text after the words 'territorio nazionale' applies. In other words, you don't benefit from the legal right to occupy a house owned by your wife. You may occupy the house in the same way that a friend or a relative does, with the permission of your spouse, even enjoy the benefits of occupying it, but since you are not the owner of it, or even a share of it, you have no rights over it, strange as that may seem to us.

I'm quite willing to be contradicted by CJ or Notaio on that point though.

Marc, even though I am a resident, does this mean that I could live out of Italy for winter ? The weather here is appalling and our Liquigas bill since September is over 6000 Euro. ( and this is due to go up yet again). Pamela Catalano

Ouch! No wonder so many of our American friends abandon the place over winter.

As far as I know, you're free to come and go as you please.

[LEFT][I]“di non essere titolare, neppure per quote o in comunione legale, su tutto il territorio nazionale, di diritti di proprietà, uso, usufrutto, abitazione o nuda proprietà, su altra casa di abitazione, acquistata, anche dal coniuge, usufruendo delle agevolazioni per l’acquisto della prima casa;"[/I][/LEFT]

[COLOR=black]In essence what this means is that in order to qualify for the prima casa concession you cannot:[/COLOR]
[LIST]
[*]Be the owner of any other property in Italy, either via shares or via the matrimonial property regime of community of assets
[*]Possess rights to use an existing property (to include bare ownership or usufructuary rights) which qualifies for the prima casa concession even if your spouse has purchased it.[/LIST][LEFT][COLOR=black]You are required to declare this at the Atto. [/COLOR][/LEFT]

[COLOR=black]Moreover, in order to qualify for the lower tax, you have to apply for residency from the outset. You cannot apply for a refund even if you apply for residency at a later stage (which in any case has to be within the 18 months). If you make a false declaration you will not only lose the concession but also face a hefty fine. [/COLOR]

[COLOR=black]As far as I am aware, if you are an Italian national living abroad, the [I]agevolazioni per l’acquisto della “prima casa” [/I]are as follows:[/COLOR]

[LEFT][COLOR=black]1)[/COLOR][COLOR=black]Italian nationals who are working on secondment overseas, providing that the property is located in the comune where the employer is based.[/COLOR][/LEFT]

[COLOR=black]2)[/COLOR][COLOR=black]Italian nationals who are resident overseas and registered in the AIRE, in which case the property purchased as prima casa can be located anywhere in Italy [/COLOR]

[LEFT][COLOR=black]You don’t, as Marc already mentions, need a certificate to prove AIRE registration. [/COLOR][/LEFT]

[COLOR=black]Matrimonial property regimes have particular relevancy under Italian law and you have to bear in mind that legal action may result should false declarations be made.[/COLOR]

As I understand it, following reforms in family law ([I]Diritto di famiglia[/I]), married couples are now free to choose the [I]regime patrimoniale della famiglia.[/I] If they do not stipulate which regime, then the [I]comunione dei beni[/I] (or [I]comunione legale [/I]as it is called) is applied automatically.

[COLOR=black]In [I]comunione[/I] [I]dei beni[/I] co-purchasers collectively own the whole of the equitable estate. What’s mine is yours. If one owner has debts for example, creditors can claim assets belonging to the other because the assets are collectively owned.[/COLOR]

[LEFT][COLOR=windowtext]Article 177 of the Civil Code provides a breakdown of what assets are to be included in this regime, although assets that are considered immediately [/COLOR][I][COLOR=windowtext]comuni[/COLOR][/I][COLOR=windowtext] include:[/COLOR][/LEFT]
[LIST]
[*][COLOR=windowtext]Any movable or immovable property purchased individually or collectively[/COLOR]
[*][COLOR=windowtext]Any companies formed and managed by both husband and wife after they have got married [/COLOR]
[*][COLOR=windowtext][FONT=Times New Roman][FONT=Verdana]Any profits realised from business activities owned by one partner but managed by both[/FONT] [/FONT][/COLOR][/LIST][I][COLOR=black]Separazione[/COLOR][/I][COLOR=black] [I]dei beni[/I] is, on the other hand, the simplest matrimonial property regime where each co-purchaser holds assets (those purchased prior to and during married life) in their own name with no claim on the property of the other. This is particularly useful, as Marc points out, when you have a business and you want to keep things separate. If you choose [I]separazione dei beni[/I] you have to respect the provisions contained in article 162 of the Civil Code.[/COLOR]

[COLOR=black]The law regulating [I]separazione dei beni[/I] provides for burden of proof (article 219- [I]prova della proprità dei beni[/I]), which means that in the event of a legal dispute between a married couple, the parties can use all means at their disposal to prove exclusive ownership.[/COLOR]

Phew ! what a lot of information to digest, great to have, very welcome thanks.

In our own case the situation seems to be pretty simple: My wife is an Italian citizen residing abroad and as such she/we can buy a house under the prima casa regulations. Note that she (nor I) has no other property in Italy, the house is less than 240sq.m, non-luxury etc. I don't see any opportunity for our/her entitlement being challenged - or am I wrong?

As for the loophole which seems to let us have two prima-case (his'n'hers) we're not too fussed. We don't envisage having a second property in Italy. However, it does seem rather simple that we should just state that the whole property is owned by my wife, which we may do just to keep that window open. If so, would the fact that the mortgage we would use being a joint one relevant?

I am also an Italian, resident in England about to complete the purchase an appartment in Le Marche. I have been given conflicting advise on being entitled to claim Prima Casa, has anyone resolved this situation.