Tax Deductions | Mortgage Interests

If you paid mortgage interests on the purchase of your primary residence in Italy, you can access a 19% tax deduction on the qualifying expenses, up to € 4,000 during any given tax year. Therefore, the maximum tax break you can benefit on mortgage interest paid amounts to € 760 per tax year.

There are few conditions to meet in order to benefit of the tax deduction. Firstly, you must sign the mortgage up to 12 months before the property purchase deed date; secondly, the bank or financial institution must be Italian based or a permanent establishment of a EU institution.

Furthermore, you must occupy the premises as your primary residence, thus living with your family members in that property within 12 months from the purchase deed date.

Should the property and the mortgage be in joint names, each applicant can deduct the interest expenses paid, however the total of € 4,000 remains for both applicants.

The supporting documents required to claim your tax deduction include:

  • Property purchase deed
  • Mortgage deed
  • Annual interest paid recap provided by the bank
  • Notary invoice
The above documents must be retained on file up to 7 years after the tax return submission, and must be provided to the tax office in case an audit takes place.
The tax break only applies to the primary residence, whilst it also applied to any other residential property if the mortgage was signed on/before January 1st 1993.

Tax Deductions | Mortgage Interests

Tax Deduction | Mortgage Interests
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Tax Deduction:

mortgage interest deduction

Other deductible items

The interests expenses are not the only expenses deductible in your italian tax return; in fact you can also claim the following expenses to reduce your tax burden:

  • Real estate agent fee
  • Notary fee
  • Property assessment expenses
  • Mortgage grace period expenses
  • Mortgage assessment expenses
You can realize that an efficient use of the above mentioned items makes the real estate purchase more affordable in term of tax payable.
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