Real estate leasing: how does it work and what are the advantages

Real estate leasing is a contract that allows you to use a property by paying periodic installments to the company that owns the property.

Introduced by the stability law of 2015, n.208 / 2015 , real estate leasing began to be used in January 2016 . With this tool you have the opportunity to buy a house with a particular formula, in fact, using the tax advantages provided, it is possible to pay periodic installments.

At the end of the contractual period it is possible to purchase the property by paying a maxi final installment, pre-established during the signing of the contract, or alternatively, to return the property.

The leasing operation provides for various tax breaks which vary according to the age of the applicant. In addition to these are also protections, governed by law, which concern, for example, the early termination of the contract or the bankruptcy of the seller or the leasing company.

Tax concessions disregard the objective characteristics of the property: the deductions are due to any home even if belonging to the cadastral categories A / 1, A / 8 and A / 9. In fact, it may be a building: for residential use already completed and declared viable, for residential use to be built on a specific land, for residential use under construction and to be completed, a residential building to be restored.


  1. Real estate leasing: operation and contract
  2. Real estate leasing: advantages
  3. Real estate leasing: disadvantages
  4. Real estate leasing: the protections provided
  5. Real estate leasing: who is it convenient for?

Real estate leasing: operation and contract

The customer, after choosing the property, instructs the bank or the financial company to buy the property . These therefore take care of structuring the leasing operation, in exchange the customer undertakes to pay installments calculated according to an interest rate established at the time of signing the leasing contract.

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In addition to the maxi final installment, provided if you want to redeem the asset, and the monthly fees , an advance payment can also be provided. This amount is indicated on the contract and calculated as a percentage of the total value of the leasing transaction.

The leasing contract must therefore indicate:

  • the cost ofthe leased property;
  • the overall durationof the contract;
  • the rate appliedto the leasing contract and the relative amount of the installments ;
  • the amount of the advanceand the redemption amount .
  • any additional service costs.

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If the bank or finance company involved are in agreement, the customer can decide to exit the leasing contract early . In this case there are two options:

  • redeem the asset in advance and resell it, with eventual recalculation of the maxi final installment and payment of any penalties;
  • transfer of the asset to a third party taking over the leasing contract.

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Real estate leasing: advantages

The benefits provided by the leasing transaction are of a fiscal nature and vary according to the age and income of the applicant.

If, at the time of signing, the customer has not yet turned thirty-five , he can enjoy the following benefits:

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  • 19% of leasing installments and related ancillary charges, up to a maximum annual amount of 8,000 euros;
  • 19% of the amount paid for the maxi final installment with which to redeem the property, up to a maximum amount of 20,000 euros.

On the other hand, subjects aged 35 or over can:

  • deduct 19% of leasing fees, up to a maximum of 4 thousand euros per year;
  • deduct the redemption price at 19%, up to a maximum of 10 thousand euros.

In both cases, therefore regardless of the age of the customer, the registration tax for the purchase of the first home is reduced to 1.5%.

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Individuals who have a total annual income not exceeding € 55,000  at the time of signing the finance lease can benefit from the Irpef  subsidy. Furthermore, it is necessary that the beneficiaries do not hold property rights on residential properties.

Lastly, for leasing companies, the application of the 4% discounted VAT is envisaged in the event of the purchase of the property from the builder.

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The 2015 Stability Law provides for these economic benefits for contracts entered into  from 1 January 2016 to 31 December 2020.

Real estate leasing: disadvantages

Following the advantages, some disadvantages deriving from the real estate leasing operation should also be highlighted :

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  • You are not the owner but the user of theproperty;
  • Given the shorter maximum duration allowed with respect to the mortgage, the leasing fees may be higherthan the mortgage or a rental fee;
  • The time massim therelated to property leasing usually are around 12-15 years contracts while mortgages may instead be up to 30-40 years duration with a lower rate;
  • The interest rateson mortgage loans are usually lower;
  • The leasing company could request as an initial installmentan amount between 10 and 30% of the value of the property itself.

Real estate leasing: the protections provided

In addition to tax concessions, for those who contract a real estate lease, various protections are provided :

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  • suspension from paymentof fees, for a maximum of 12 months, in the event of loss of employment;
  • payment of part of the proceeds of the sale, in the event that the leasing company, following eviction for default, relocates the asset on the market;
  • protections in case of bankruptcyof the seller or the leasing company;
  • early exit from the contract, with the consent of the grantor, with early redemption or transfer of the asset to a successor.

Real estate leasing: who is it convenient for?

Real estate leasing is a tool that is suitable for those who do not have the possibility of accessing a mortgage to buy a house. Not providing for the payment of an initial deposit , the leasing formula is more accessible.

In fact, the mortgage is a form of financing with stricter requirements as it is required to have a certain amount of money at the time of purchase, the mortgage generally covers up to 80% of the value of the property. In addition, those who have more solid types of employment contracts are favored.


by Abdullah Sam
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