Taxpayers who renovate residential properties and common areas of residential buildings located within the territory of the State can deduct from their personal income tax (Irpef) a portion of the expenses incurred for the works.

Following the new provisions introduced by the 2020 Budget Law, taxpayers can still benefit from the 50% deduction of the expenses incurred and paid by bank transfers, made from June 26, 2012 to December 31, 2020, with a maximum limit of 96,000 euros for each real estate unit. The deductions for building renovations will therefore be valid also for 2020, thanks to the bonus that allows requesting the 50% Irpef refund on expenses incurred for specific works. Our wastewater treatment plants are included in the deductible costs for the renovation and/or extraordinary maintenance category!

How does the Renovation Bonus work?

Taxpayers can deduct 50% of the expenses incurred for ordinary and extraordinary maintenance works from their Irpef, for a maximum amount of 96,000 €. The recognized Irpef refund will be paid in 10 equal annual installments, and to benefit from the facilitation, specific rules must be followed. The 50% deduction is recognized for:

ordinary maintenance, extraordinary maintenance, restoration, conservative renovation, and building renovation carried out on common areas of condominiums;
extraordinary maintenance interventions, restoration and conservative renovation, building renovation carried out on individual residential units;
works aimed at achieving energy savings;
reconstruction or restoration of properties damaged due to natural disasters;
construction of garages/parking spaces;
elimination of architectural barriers;
asbestos removal and execution of works aimed at preventing domestic accidents;
adoption of measures aimed at preventing the risk of illicit acts by third parties.

Some examples of ordinary maintenance works for which the bonus is recognized:

installation of elevators and safety stairs;
construction and improvement of sanitary facilities;
replacement of external fixtures and frames or shutters with blinds and modification of material or type of fixture;
refurbishment of stairs or ramps.

Let's take a practical example: on €4,000 spent, the taxpayer will have a SAVINGS of 50%, that is, €2,000, deducted from income taxes in installments of €200 per year for 10 years.

Who is entitled to the Renovation Bonus?

All taxpayers subject to income tax, whether residents or non-residents in Italy:

owner or bare owner;
holder of a real right of enjoyment (usufruct, use, habitation, or surface);
tenants or loaners;
members of cooperatives, members of simple partnerships, and sole proprietors (for non-instrumental or merchandise properties);
if holders of bank transfers and invoices: cohabiting family member, separated spouse assigned the property, cohabitant more uxorio.
if holders of bank transfers and invoices: cohabiting family member, separated spouse assigned the property, cohabitant more uxorio.

How to apply and how to pay?

To apply for the 2020 Renovation Bonus, the incurred expense and the identifying cadastral data of the property must be indicated in the income tax return. The bonus has specific rules regarding the payment of the works, for which it is necessary to use a bank or postal transfer. For more information on deductible expenses, wastewater treatment plants, and energy savings, the Dorabaltea consultants are ready to provide all the information you may need and to study the best solution for your needs.Request a consultation: info@dorabaltea.com

To learn more:

If you want to delve into the details and stay updated on the latest regulatory news, read the Agenzia delle Entrate guide: :https://www.agenziaentrate.gov.it/portale/documents/20143/233439/Ristrutturazioni+edilizie+it_Guida_Ristrutturazioni_edilizie_Maggio2019.pdf/ed587c35-c2d6-7346-b79f-e2409b6a8c92