Covid-19 had a disruptive impact on the mortgage market all over the world. Although the economic crisis we are experiencing is not directly linked to loans for the purchase of houses (which happened, instead, in 2008), the block to production and national and international mobility caused by the SARS-CoV-2 virus ended with influence both the real estate market and mortgage rates. Not only that: as confirmed by the Revenue Agency with the response to the appeal n. 485, the timing for taking advantage of the interest deductions on mortgages on the purchase of the first home also changed.
Deduction of mortgage interest, what the legislation provides
Nell’ruling 485 of 15 October 2020 the case of a taxpayer who bought a property adjacent to his home with the aim of combining the two structures into a single house is examined. For the purchase, the taxpayer has signed a mortgage loan, knowing full well that the deduction for interest expense it is only up to the moment the merger of the two real estate units is carried out at the cadastral level.
All, however, it must take place over a period of 12 months: within this period the buyer must transfer his residence to the new property (or to the “merged” one, as in the case of the interpellant), under penalty of loss of benefits. However, the quarantine prevented the works from being completed within one year of purchase, preventing the taxpayer from being able to transfer his residence to the new “merged” home.
Mortgage interest deductions, timing changes: the Agency’s response
In the ruling, the taxpayer argues that Article 24 of the Law Decree of 8 April 2020 (the so-called “Liquidity Decree”), which provides for extension of 213 days for all tax obligations related to benefits for the first home, can also be applied to your case. This would mean that he would have another 7 months to complete the merger work and thus transfer the residence.
An acceptable interpretation, albeit with some corrections. “In the present case – reads the response to the questioning – the interpellant is considered can access the deduction in question, provided that all the other conditions envisaged by the law exist and, in particular, that the purchase of the property took place in the year before or after the date of stipulation of the loan agreement “.
According to the legislation currently in force in Italyin fact, the buyer has two years from the purchase to transfer his residence in the event that the property is subject to renovation works. “In the present case, therefore, a cause of force majeure occurs represented by the epidemiological emergency which does not, in principle, exclude the right to the deduction “.
And the SARS-CoV-2 pandemic falls fully within the definition of force majeure as defined in the standard recalled by the Agency. For this reason, “taking into account that the cause of force majeure occurred pending the term within which to establish residence in the property, the applicant may benefit from an extension of the term for a time corresponding to the duration of the cause of force majeure (from 23 February to 2 June 2020) which prevented or slowed down the preparatory activities for the destination of the property as habitual residence “.
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