The Italian Tax Authority has addressed the exemption from registration tax and stamp duty applicable to deeds relating to properties intended for student accommodation in the context of projects financed under the National Recovery and Resilience Plan (PNRR).
Article 1-bis, paragraph 10, of Law No. 338/2000 provides for an exemption from registration tax and stamp duty for deeds concerning properties intended for university student housing entered into in connection with proposals admitted to PNRR funding.
The case addressed in ruling No. 60 of 3 March concerns an operator that applied to the Ministry of Universities and Research (“MUR”) for PNRR funding and intends to acquire a property to be used as student accommodation as part of a transfer of a business unit.
With regard to deeds for the acquisition of real estate, the tax incentive essentially applies to purchasers acquiring properties from private individuals or properties included in a business unit. In both cases, the transaction falls outside the scope of VAT and, in the absence of the above-mentioned tax relief, would ordinarily be subject to proportional registration tax (9%) and stamp duty.
The Tax Authority clarifies both the scope of application of the tax relief and the timing requirements for the real estate deed in order to benefit from the exemption.
The transfer of a business unit including a property intended for student accommodation may fall within the category of deeds concerning properties intended for university student housing entered into in connection with proposals admitted to PNRR funding. Accordingly, such a deed may benefit from the exemption from registration tax and stamp duty, limited to the portion relating to the property intended for student accommodation.
A timing requirement also applies: the tax relief applies only to deeds executed after admission to the PNRR funding pursuant to Article 2 of Ministerial Decree No. 481 of 2024. Conversely, deeds executed after the submission of the application to the MUR but before admission to PNRR funding would not benefit from the exemption from registration tax and stamp duty.
Specifically, the ruling states that “once the applicant becomes the recipient of the public funding in question and, therefore, where the proposal has been admitted to funding pursuant to Article 2 of the above-mentioned Ministerial Decree No. 481 of 2024, the applicant may benefit from the tax incentives provided for under Article 1-bis, paragraph 10 of Law No. 338 of 2000 and, in particular, from the exemption from stamp duty and registration tax”.
The interpretation provided in the ruling regarding the timing requirement does not appear entirely convincing. The ruling appears to rely mainly on Article 18 of Ministerial Decree No. 481 of 2024, according to which “entities responsible for projects admitted to funding benefit from the applicable tax incentives”, including those provided for under Article 1-bis, paragraph 10.
However, there are systematic arguments supporting the application of the tax relief also to deeds executed after the submission of the application for PNRR funding and before the formal admission to the funding.
For instance, the statutory provision introducing the tax incentive (Article 1-bis, paragraph 10 of Law No. 338/2000) refers to deeds entered into “in connection with” proposals admitted to PNRR funding, without expressly requiring that the deed be executed only after the formal admission to funding.
Moreover, the applicable rules provide for the revocation of the tax incentive where certain requirements cease to be met after admission to PNRR funding. This mechanism appears consistent with a tax relief potentially granted to deeds executed during the period between the submission of the application to the MUR and the formal admission to PNRR funding.
According to the current position of the Tax Authority, as expressed in the ruling, deeds relating to properties intended for student accommodation executed between the submission of the application and the formal admission to PNRR funding would not qualify for the tax incentive, even if the property were subsequently admitted to PNRR funding.
This issue directly affects the scope of application of the tax relief. Limiting the benefit only to deeds executed after admission to PNRR funding may, in practice, significantly reduce the effectiveness of the tax incentive.