Fully finished modular homes in Italy are generally VAT-exempt unless sold by a construction company, in which case reduced VAT rates apply, and buyers’ declarations must be accurate to avoid penalties.
The Italian Revenue Agency has clarified, on 5 December 2025, that fully finished modular homes, ready to be lived in and complete with utilities and finishes, are considered real estate and are generally exempt from VAT.
VAT applies only if the selling company qualifies as a construction company, in which case reduced rates of 4% (for first homes) or 10% may be applied. These homes require specialised equipment and personnel for installation, which is why they are treated as real estate rather than movable goods.
A company selling such homes to private residents in Italy cannot use the EU One Stop Shop (OSS) system, which is reserved for distance sales of movable goods. Instead, if VAT is applicable, the company must fulfil its obligations in Italy either through direct registration or by appointing a tax representative.
Invoices with reduced VAT rates can only be issued if the buyer legitimately meets the conditions.
If a buyer submits a false declaration to obtain a reduced rate, the Revenue Agency will recover the unpaid tax with a 30% penalty and interest, but the company will not be held responsible for the buyer’s false statement.
Finally, regardless of VAT treatment, all modular homes must be registered in the Italian land registry.
