In the case of purchase for first house the registration tax due in the place of stipulate is reduced to 3%; the mortgage and cadastral taxes are fixed at the rate of 129,11 Euros each.

It is 'First house' when a series of conditions recurs:
a) the buyer must have the residence in the council in which the house is located, or it must establish it within 18 months from the sale act;
b) the buyer must not own (as owner or on the basis of other real right) another house in the council in which the building to buy is located;
c) the buyer must not be owner (or usufructuary or have an use or habitation right) of another house bought by him or consort with the first house facilities on all the national territory.

The facilities are due to the purchase, even if with separate act, of the pertinences if destined to service of the habitation object of the facilitated purchase.

It is the duty of those who have given the no luxury habitation, bought enjoying the foreseen benefits for the first house in order to the registration tax and to the Vat, and within a year from the sale they buy another no luxury habitation as first house.

The tax credit is due when the following conditions subsist:
- a building is bought (even through exchange or contract) taking advantage of the first house facilities;
- the purchase has been made within a year by the sale of other building bought taking advantage of the first house facilities (or bought with the application of the Vat rate facilitated from building enterprises on the basis of the provision being in force until 22 may 1993);
- have not decayed from the first house benefit.

The tax credit value is equivalent to the amount of the registration tax, or of the Vat corresponded for the first facilitated purchase; in any case it can’t be higher to the registration tax or to the Vat due for the second purchase.

The Councils annually decide a facilitated ICI rate for the first house besides a fixed deduction.
Example: Rieti Council (year 2004) rate 5,9 by a thousand and deduction of 103,29 Euros.
Some councils foresee ICI reductions for the buildings rented with local agreements. Law 431/98.

The income deriving from the building destined to principal habitation is not subjected to Irpef; a deduction is foreseen from the total income of the taxpayer for equal amount to the cadastral income of the building used as principal habitation.

The deduction regards the passive interests concerning the loans stipulated for the purchase of the first house either of other habitations or reorganizations, but also the accessory burdens like the expenses for the loan and the revaluation shares, for example if in the contract there is a clause which foresee the indexation of the capital.

On the loans for the purchase of the first house, the law foresee a deduction of 19% calculated on a maximum amount of 3.615,20 Euros . The tax deduction is due to condition what:
- the building is used as principal habitation within a year from the purchase;
- the purchase of the building must be made in the antecedent or next year as regards the date of the stipulate of the loan.

The purchase of a rented building doesn’t have the right lost to the deduction of the passive interests of the loan to condition what:
- within three months from the purchase have been reported the tenant the order act of licence or eviction for finished lease;
- within a year from the release of the building the same is used as principal habitation.

Is considered building aimed at principal habitation also the building that is used to such destination by the relatives of the taxpayer.
The deduction for the paid passive interests is not lost in the hypothesis in which the bought building is object of building reorganization proved from the building concession or equivalent act. In such case the deduction is due taking effect from the date in which the building is aimed at habitual residence, and however within two years from the purchase.

If the loan is registered to both the consorts, each of them can just enjoy the deduction for its share of interests; but in case of consort fiscally dependent on the other, the deduction is due to the latter for both the shares.
If the loan has been stipulated by several people, for example husband and wife, the limit of € 3.615,20 to take back in the declaration must be divided between them if the loan has been opened after January 1 1993, whereas if the loan has been opened before, the deduction of 19% on a maximum amount of € 3.615,20 is due to each person who has stipulated the loan.

No deductions are foreseen if the loan has been stipulated for the purchase of a pertinence of the house, for example the garage or the cellar.

Subsists the possibility of deducting the passive interests concerning loans in reorganization and/or construction of the principal habitation up to the maximum of € 2.582,28.
In such case the term to aim the building at principal habitation is of six months from the stipulate.

The deduction of 36% is due for the reorganizations concerning the building recovery of the common parts of residential buildings and of single flats; the interventions which foresee the deduction are the following:

- interventions of ordinary maintenance, of extraordinary maintenance, of restoration and conservative balancing, of building reorganization realized on the common parts of residential building;
- interventions of extraordinary maintenance (and not ordinary), of restoration and conservative balancing, of building reorganization realized on the single residential buildings;
- works turned to prevent illicit acts of a third party like for example the installation of alarm systems and the assembly of antitheft bars or armoured doors;
- works concerning lifts and goods-lift and any technological intervention to support the internal or outside mobility for the people with handicap;
- works turned to prevent the domestic accidents.

For the expenses it is valid the year in which they are really stood; the maximum amount admitted to the benefit is equal to € 48.000,00 for the interventions realized on each building; this means that the maximum due deduction is equal to € 17.280,00. The due deduction must be divided in 10 annual equal amount shares.For the taxpayers in the age of 75-80 the deduction can be divided in five or three annual equal amount instalments.

For the reorganization works of single habitations or whole buildings the VAT rate is reduced to 10% up to 30.06.2004 except for respites.