Mortgage Interest Deduction: Does it Remain Valid After Relocation?

Tax Deductions for Mortgage Interest: What Happens When You Move for Work?

Many taxpayers wonder: if I need to relocate for work, do I still have the right to continue benefiting from the mortgage interest deduction? Among the tax benefits established by the Italian Tax Code (TUIR), there is a deduction for mortgage interest on the purchase of the first home.
This benefit is closely tied to the condition that the property is used as the primary residence.
However, what occurs if a change in work circumstances necessitates a move after a few years? Are taxpayers able to maintain the benefits? The Agency of Revenue provides some clarifications.

Mortgage Interest Deduction in the Case of Relocation: Guidelines from the Agency of Revenue

According to Article 15 of the TUIR, taxpayers can deduct the mortgage interest paid for their first home.
The deduction amounts to 19% on a maximum annual expenditure of €4,000, leading to a potential annual IRPEF savings of up to €760.

To enjoy these benefits, the residence must be intended as the individual’s habitual dwelling.
If a taxpayer has obtained these tax benefits but later finds themselves compelled to relocate for work, the situation can become complex.
If the move is permanent and the individual sells their home, subsequently paying off the mortgage, there are usually no issues.
However, complications arise if they choose to keep the house and continue mortgage payments while relocating.

Limits to the Deduction for Mortgage Interest Payments

The Agency of Revenue clarifies the limits of this fiscal benefit in their FiscoOggi notice.
A taxpayer inquired about their son’s mortgage, which he has had since 2015, and whether he can still claim deductions after moving abroad for work.

The Agency confirmed that taxpayers can continue to benefit from the deductions as long as the work-related necessities for relocation persist.
However, if the taxpayer decides to purchase a home abroad to serve as their principal residence in their new country, the mortgage interest deductions on the 730/2024 model cannot be claimed.

For further information, see Agenzia delle Entrate.