Action brought on 11 May 2021 – European Commission v Italian Republic

(Case C-303/21)

Language of the case: Italian

Parties

Applicant: European Commission (represented by: W. Roels and A. Spina, acting as Agents)

Defendant: Italian Republic

Form of order sought

The Commission claims that the Court should:

declare that, by excluding non-Italian EU citizens who do not intend to settle in Italy from the scheme providing for the purchase of their first house or flat, other than a luxury house or flat, in the Italian territory, at a reduced rate, the Italian Republic has failed to fulfil its obligations under Articles 18 and 63 of the Treaty on the Functioning of the European Union;

order the Italian Republic to pay the costs.

Pleas in law and main arguments

A reduced rate of stamp duty for the purchase in Italy of a property for residential use (‘first home’) is applied under certain conditions, including the condition that the property be situated in the municipality where the taxpayer resides or where the taxpayer intends to establish his or her residence within 18 months from the purchase of the property. For the purposes of the application of that tax relief, that condition applies without distinction to both Italian citizens and citizens of other Member States. Nevertheless, according to the provisions at issue in the present action, that requirement is not necessary only for citizens of Italian nationality who, for work reasons, have moved abroad.

According to the Commission, by establishing, for the purposes of that tax relief, that the taxpayers’ Italian citizenship is the determining factor behind the distinction between Italian citizens and citizens of other Member States, the national legislation in question entails direct discrimination on grounds of nationality which is prohibited by Article 18 TFEU.

Furthermore, the Commission considers that, since the purchase of a property in the territory of a Member State by a non-resident is an investment in real estate which falls within the category of the movement of capital between Member States, the preferential treatment of the citizens of one Member State provided for by the national legislation in question constitutes a restriction on the free movement of capital which is prohibited by Article 63(1) TFEU and which cannot be objectively justified under Article 65(1) and (3) TFEU.

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