Recovery of Public Residential Buildings (ERP)
It is the most urgent measure of the decree. Salvini announced an allocation of 950 million euros (extendable up to 1.2 billion through additional funds) for the extraordinary maintenance of public housing.
The funds will be used to put approximately 50,000-60,000 homes currently unusable due to structural deficiencies or lack of certifications back on the market. Construction is expected to open by June 2026, with the first 10,000 homes to be delivered by the summer.
More space for cohousing for the elderly with private funds
The second pillar emphasizes public-private partnership. It involves providing for the integration of private funds (pension funds and social security funds) for social housing projects.
In particular in this case the emphasis is placed on the provision of new bureaucratic simplifications for urban regeneration, therefore through recovery and not new land consumption. The priority objective is to create co-housing projects for the elderly.
Relaunch of Rent to Buy
To encourage the purchase of their first home by young people and the so-called “grey band” of the population, i.e. those with an income that is too low to access a mortgage but too high to be included in the public housing rankings, Salvini is also aiming for a revision of the Rent to Buy law.
Rent to Buy is a type of contract introduced by art. 23 of Legislative Decree 133/2014 (called “Sblocca Italia”). Technically it is defined as an “enjoyment contract based on the subsequent sale of real estate” and provides for the merger between a contract similar to a lease and a preliminary sales contract.
In practice, the owner delivers the property to the tenant, who pays a periodic rent divided into two installments: one for enjoyment and one as a down payment. The tenant has the right (not the obligation, unless otherwise agreed) to purchase the property within a set period (maximum 10 years), deducting the advance payments made from the price. The contract must be stipulated by public deed or authenticated private deed, and transcribed in the Real Estate Registries to protect the tenant from foreclosures or sales to third parties. If the tenant does not pay at least 1/20 of the total rent, the owner takes back the property and retains the usage fees and advance payments.
Although the regulatory introduction dates back to 2014, official data (Revenue Agency and Notaries) indicate an extremely limited diffusion of this formula compared to the total of sales, mainly due to the fiscal complexity (double VAT/Registry taxation on the amounts paid on account) and the rigidity of the protection in case of failed purchase.
The tax lever to increase rent-to-own contracts
The changes to the MIT study aim to relaunch this formula by acting on two fronts. First of all, the reform provides that the portion of the rent paid as a down payment becomes partially deductible from taxes for the buyer, making the operation more economically advantageous for the tenant promissory buyer. For the owner, however, there would be a reduction in notary costs and registration taxes linked to the ten-year transcription of the contract.
For example, in the case of purchasing a property worth 200,000 euros, with a contract duration of 8 years, and a monthly rent of 1,000 euros (500 enjoyment and 500 down payment), this results in a total provision over 8 years of 48,000 euros (equal to 24% of the value of the property). Currently there is no tax advantage for the tenant, in the future instead the idea would be to allow a 19% deduction on the down payment amount, in practice as if it were the payment of interest on the mortgage, thus making the formula more advantageous for the tenant.
There would then be a reduction in purchase taxes in the case of contracts stipulated on the basis of the standard ministerial model that will be developed.
The First Home Fund to guarantee the fees
The second part of the intervention aims to extend the guarantees of the First Home Fund – managed by Consap and currently intended to provide guarantees on mortgages – also to Rent to Buy contracts. The intervention is aimed at protecting the owner from the risk of arrears and, at the same time, helping the tenant to obtain a residual loan more easily at the end of the enjoyment period, allowing banks to recognize as equity the forced “savings” of the portion of the rent that represents the part of the down payment.
Furthermore, with this formula the redemption of publicly owned residential buildings should also be relaunched.
