There is time until December 31, 2024 to renovate your home while enjoying the higher tax deduction, at 50% and then from 2025 it will return, barring extensions, to 36%. But which interventions are eligible for the tax relief? What requirements are required? Let’s try to take stock.
Which renovation expenses are deductible?
The 50% Irpef deduction with a spending limit of up to 96 thousand euros per real estate unit can be used until 31 December 2024 for a series of distinct interventions in ordinary maintenance only on common parts of residential buildings, extraordinary, restoration and conservative rehabilitation and renovation .
Routine maintenance work
First of all it is good to underline that the routine maintenance interventions they can only be facilitated if carried out on common parts of residential buildings, i.e. stairs, entrance doors, vestibules, porticoes, courtyards, all parts of the building necessary for common use, the rooms for the concierge and for the doorman’s quarters, elevators, wells, cisterns, sewers, etc. In this case, individual condominium owners are entitled to the Irpef deduction at 50% based on the thousandth share.
Examples of ordinary maintenance work, indicated by the Revenue Agency, are:
- repair, renovation and replacement of building finishes,
- replacement of floors, fixtures and windows,
- painting of walls, ceilings, internal and external fixtures,
- internal plastering,
- waterproofing of roofs and terraces,
- painting garage doors.
If these works are carried out on individual real estate units and are part of a larger intervention then you can benefit from the 50% IRPEF deduction. So for example, if the toilets are built (extraordinary maintenance work) and then the walls are painted, the painting is also an expense that can be deducted.
Ordinary maintenance work
I extraordinary maintenance works which give the right to the tax deduction are by way of example:
- Installation of elevators and safety stairs
- creation and improvement of toilets
- replacement of external fixtures and doors or shutters with shutters and with modification of material or type of frame
- Refurbishment of stairs and ramps
- fence of the private area
- construction of internal stairs.
All these interventions must not alter the overall volume of the buildings and must not lead to changes in the intended use, therefore changing from a residential home to an office or vice versa. Extraordinary maintenance works also include those consisting of splitting or merging of real estate units with the execution of works even if they involve the variation of the surfaces of the individual real estate units as well as of the urban planning load. Even in this case, the condition to be respected is that the overall volume of the buildings is not modified and the original intended use is maintained.
Restoration and conservative recovery
Adapting the heights of the floors (respecting the existing volumes) or opening windows for ventilation needs of the rooms are instead examples of conservative restoration and rehabilitation interventions. Finally, demolishing and faithfully reconstructing the property, modifying the facade or even creating an attic or a balcony are all examples of building renovation interventions.
Who can get the 50% deduction?
Not only property owners but also property owners can benefit from the tax deduction tenants and borrowers and in these cases a declaration of consent from the owner of the property to the execution of the works is required, to be shown at the time of any checks. The cohabiting family member of the owner or holder of the property subject to the intervention is also entitled to the deduction, provided that he/she pays the costs and the transfers and invoices are in his/her name. The deduction can also be requested by those who carry out the works on the property themselves, limited to the purchase costs of the materials used.
How to deduct renovation costs in the 730
The tax deduction, to be calculated on a maximum amount of 96 thousand per real estate unit, must be divided into ten annual installments of the same amount, in the year in which the expense is incurred and in subsequent years. As such, it can be used by indicating in the tax return (form 730 or Single Natural Person) the cadastral data identifying the property and, if the works are carried out by the holder (tenant or borrower), the registration details of the deed.
To benefit from the deduction, payments must be made by bank or postal transfer, so called because it must indicate some elements such as:
- reason for the payment, with reference to the law (article 16-bis of Presidential Decree 917/1986)
- tax code of the beneficiary of the deduction
- tax code or VAT number of the payment beneficiary.
The transfer must be paid to a bank or post office. The bank transfer receipt must be kept by the taxpayer together with other documents, to be shown during checks, which are:
- communication to the local health authority (if applicable)
- invoices and receipts proving the expenses incurred
- payment receipts for municipal tax (ICI-IMU) if due
- for interventions on common areas of residential buildings, assembly resolution approving the execution of the works and thousandths table for the distribution of expenses
- any concessions or authorizations, but if the legislation does not provide for any enabling title, a declaration in lieu of the sworn statement is sufficient, indicating the start date of the works and certifying that the interventions carried out are among those eligible for the incentives.
If the property is not yet registered, the registration application is also required.
What if the property is sold?
In the event that the property on which the works were carried out is sold before the entire period for benefiting from the relief has elapsed, the right to the deduction of the unused portions is transferred, unless otherwise agreed by the parties, to the purchaser of the real estate unit, if he is a natural person.
What if the taxpayer dies?
Even in this case, the unused deduction quotas are transferred to the heirs who retain the material and direct possession of the property. What does this mean? An example above all: if the heir who directly held the inherited property subsequently rents it out, he will be able to benefit from the deduction installments only at the end of the rental contract.
Buying a new kitchen while renovating your house
Together with the 50% Irpef deduction, it is possible to benefit, always by the end of the year, from the related mobile bonuses, the 50% Irpef deduction for the purchase of new furniture and large household appliances (the latter of a class no lower than class A for ovens, class E for washing machines, washer-dryers and dishwashers, class F for refrigerators and freezers), intended to furnish a property undergoing building restoration work. The tax deduction is available until 31 December 2024.
In detail, the furniture bonus consists of the possibility of deduct 50% from Irpef of the expenses incurred for the purchase of:
- new furniture such as kitchens, beds, wardrobes, chests of drawers, bookcases, desks, tables, chairs, bedside tables, sofas, armchairs, sideboards, mattresses, lighting fixtures.
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large appliances such as refrigerators, freezers, washing machines, washer-dryers and dryers, dishwashers, cooking appliances, electric stoves, microwave ovens, electric hot plates, electric heating appliances, electric radiators, electric fans, air conditioning appliances. These appliances must have an energy class no lower than class A for ovens, class E for washing machines, washer-dryers and dishwashers, class F for refrigerators and freezers, as can be seen from the energy label. However, the purchase is facilitated for appliances without a label, provided that this obligation has not yet been established for them.
The purchase of doors and flooring is excluded (for example, parquet), curtains and drapes and other furnishing accessories. The expenses to be deducted instead include those for transport and assembly of the purchased goods.
To obtain the benefit, it is therefore essential to carry out a building heritage recovery intervention both on individual residential real estate units and on common parts of buildings, always residential. Furthermore, this intervention must be started from 1 January of the year preceding that of the purchase of the furniture and appliances.
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