The idea of owning a property and making changes to it according to one’s needs is surely appealing. Yet, being a homeowner also means spending time and money for annual maintenance and renovation works which are rather costly. Nevertheless, the Italian government has recently introduced new policies regarding tax deductions and state incentives to help homeowners perform renovation works (read our previous article to learn more about Italy’s state incentives to promote environmentally friendly policies in the real estate market).
The Italian Ministry for Cultural Heritage, for instance, has introduced the so-called bonus facciata 2020 which encourages homeowners to repaint, clean or decorate the external facades of their properties. On the other hand, other policies such as eco-bonus and sisma bonus aim to improve the energetic and seismic classes of a building. These policies allow people to perform various types of works on their properties and to obtain tax refunds for carrying out such works such as 50% to 85% IRPEF (individual income tax) and IRES (tax on corporate income) deductions. In particular you can apply for the eco-bonus if you plan on renovating your kitchen or bathroom; in this case not only will you receive a refund on the money which was spent to carry out the renovation works but the cost of furniture and electrical appliance will also be deducted if the appliance you purchase is A class or above. Works carried out on heating and cooling systems, heating insulation and new boilers are also covered by the eco-bonus policy if the works carried out improve the energetic class of the building of at least two levels.
For works that aim to reduce seismic risks, tax deductions go up to 110%. Another policy is related to video surveillance and anti-theft technology and it offers up to 50% on refunds.
This regulation will be in place only until the end of 2020 however the positive aspect is that works can be carried out not only by the owner of a property but also by tenants or cohabitants (for example a relative or partner) thus allowing more flexibility compared to other measures. Finally, the 2020 Green bonus establishes a 36% IRPEF deduction (up to a maximum of 5.000€) on any works which are carried out on green areas with fences, watering systems and wells. Applying for the bonuses is highly advisable for many reasons, however before you start you should make sure that you can pay the entire sum for the works you want to carry out and that you meet the tax criteria for the next 10 years in order to receive the refunds.
If you do not want to carry out renovation works you can always buy a brand-new house. Luckily there is a type of bonus that was introduced recently and that applies specifically to first-home buyers. In this case, in order to be eligible to apply for the bonus, the building must be included in specific cadastral categories (A1, A8, A9 are excluded). Other types of buildings that are included are anti- seismic houses, garages and cellars (cadastral categories C6, C7 and C2).
You should also move your residency to the city in which the new house is located within 18 months after having purchased the property. Moreover, you must not own properties that can be considered “first homes”, and you must not have benefitted from tax deductions on other properties.
In conclusion, as a general rule you should be very careful when applying for tax deductions and benefits as you need to comply with a number of requirements.
Since these regulations and policies can be rather difficult to understand you should always seek an expert’s advice. Specialised firms and professionals can help you understand the advantages and disadvantages of specific policies and their requirements. For more information feel free to visit our website at https://italianrealestatelawyers.com/ and to contact us at info@italianrealestatelawyers.com.
