Introduction
Based on a recent law (May 2021) it is possible to apply for the two following special mortgage loan and property purchase incentives:
a) State secured loans: the Italian State offers banks a security on loans to qualifying property buyers; and
b) Purchase and mortgage tax exemptions: qualified young buyers can buy an Italian property transfer tax free and mortgage tax free. The above programs are independent, although some of the thresholds and requirements partially overlap.
See table below:
| Borrower’s income (ISEE calculated, e.g., including the income of other family members living with the applicant) | State Security | – Transfer taxes exemption – Mortgage taxes exemptions |
| Under EUR 40,000 | 80% of the loan amount | Both apply if buyer is 35 or younger and is a resident of the Municipality where the Property is or commits to move there within 18 months after the purchase |
| EUR 40,000 or above | 50% of the loan amount | Neither applies |
- Expiration Date
State secured loans: applicable to applications filed up to 30 June 2022. Tax exemptions: applicable to purchases completed by 30 June 2022. - Entitled Subjects
a) State secured loans Applicable to any person who is either: 1) an Italian citizens; or 2) a foreigner with Italian qualifying immigration status (e.g., permesso di soggiorno, carta di soggiorno); who, in either case, meet all the following conditions: i) does not own, on the date of mortgage application, any other residential property in Italy or overseas except for properties acquired by inheritance or occupied by parent/s and/or sibling/s; ii) is applying for a mortgage to buy a property to be used as the applicant’s primary residence and which meets all the requirements established for tax and mortgage exemption to apply (see below); iii) meets at least one of the following conditions: A. is 35 or younger on the 1st of January of the year when they file the loan application; b) Has been for at least two year in any of following qualifying relationship with a person who meets the requirement under “A” above: B.1 Marriage; B.2 Civil union; B.3 Cohabitation contract.
c) Single-parent (not married parent, or separated, or divorced, or widow) with minor child/ren;
d) A person who is occupying or renting a home within a government social housing program. b) Tax exemptions Applicable to any Italian citizen or foreigner who is 35 or younger on the 1st of January of the year when completing the purchase who is buying an Italian property that is not zoned as a luxury home (A1, A8 or A9) and who meets at least one the following conditions: i) Lives in, or works in or commits to move within 18 months to the Municipality where the property is located and does not own any other property in the same Municipality (exceptions apply) and who Does not own any property in Italy that was purchased with “first home” tax reduction incentives, unless he/she commits to sell it within 12 months after the purchase of the new property; ii) Is an Italian citizen registered with the A.I.R.E. who does not own any other property in Italy. - Maximum Loan Amount and Interest Rates
a) State secured loans State secured loans cannot exceed EUR 250,000. The loan application can refer to the property purchase price only or to the purchase price in addition to renovation work. Interest rates of State secured loans cannot exceed pre-determined government controlled thresholds, currently 1.8% for fixed rates and for 2.2% for adjustable rates.
b) Tax exemptions There are no predetermined thresholds for the tax exception program. - Qualifying Properties
Only residential properties qualify for the purposes of both programs, excepts for properties that are “luxury” zoned on the tax (cadastral) record: A1 (prestigious homes), A8 (prominent villas), A9 (castles). - How to Apply for a State Secured Loan
The request must be filed with banks or financial intermediaries participating to the program. Banks discretionally assess and decide whether to approve a loan. In order to apply, applicants must fill out an online applicable form as per the links below: 50% GUARANTEE CONSAP FORM 80% GUARANTEE CONSAP FORM - State Secured Loan Approval Timing
The Italian State controlled agency CONSAP reviews the State Secured Loan application forms and informs the bank about the security approval or denial result within 20 days after the application is filed. The bank then completes the loan and notifies CONSAP within 90 days. - Borrower Default
In the event of borrower default, the State pays the residual loan debt to the bank. The State can then pursue a payment claim against the borrower. - Participating Financial Institutions
Find the list of participating financial institutions at the following link: CONSAP BANKS LIST
Contact us to review your personal circumstances and advise you how to best leverage applicable financing options.
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