First home purchase in cash: advantages
Real Estate

First home purchase in cash: advantages

The first condition for buying a house by paying in cash is obviously economic availability : you must have a lot of money aside or you must be able to count on a loan from a family member (parents or grandparents).

Being able to choose it, this solution by is advantageous because it avoids having a debt with the bank for many years

Furthermore, paying the house in cash has lower costs – compared to the mortgage – because you do not have to pay interest to the bank and fees and taxes to the notary and the state. So, in fact, the house costs less than buying with a mortgage.

First home purchase with mortgage: advantages

One of the main advantages of buying your first home with a mortgage concerns tax deductions . In particular, you will be able to enjoy this advantage:

substitute tax , which includes a series of tax charges that no longer have to be paid individually (mortgage and land registry taxes, registration tax, stamp duty, taxes on government concessions), equal to 0.25% of the financed amount, instead of 2% .

Furthermore, although in this case we cannot speak of a real advantage, there is the possibility of deducting the interest expense of the loan to the extent of 19% . The following can be deducted: interest expense; investigation and appraisal costs; notary fees for the loan agreement; the tax replaced; brokerage fees required by credit institutions; taxes for registration or cancellation of a mortgage; the revaluation quotas dependent on indexation clauses. All within a maximum of 4 thousand euros (therefore 760 euros are recovered).

From the point of view of the management of the family economy, although the mortgage obliges you to better organize family expenses, it also allows you not to affect any savings accumulated to manage unexpected expenses.

First home purchase and severance pay

Speaking of concessions concerning the purchase of the first home, it is good to know that, according to Italian law, it is possible to ask for an advance on the severance pay to buy the first home for oneself or for one’s children.