The Restructuring Bonus: get 50% off your Italian taxes for renovation work

The Italian government has renewed its tax break scheme for property refurbishment / Gtres
The Italian government has renewed its tax break scheme for property refurbishment / Gtres
16 January 2019, Redaction

The Italian government’s 2019 budget has officially approved an extension this year for the restructuring bonus, i.e. the tax deduction of 50% for construction and renovation work carried out on private properties and on the commonly owned parts of condominiums.

Extension of the renovation bonus for 2019

The extension of the so-called ‘Restructuring Bonus’ (or ‘Bonus ristrutturazioni’ in Italian) to 31st December 2019 will provide for a 50% deduction for expenses incurred for the renovation and reformation of homes and shared areas of apartment buildings.

New features of the 2019 renovation bonus

The new thing about the 2019 bonus concerns the requirement which was first introduced last November to communicate the details of the work done to ENEA, the Energy and Sustainable Development Agency, within 90 days from the date of completion. This obligation only stands if the work being done involves renovations for energy saving solutions and/or the use of renewable energy sources in the home.

How can you qualify to be eligible for the program?

The restructuring bonus is open to all taxpayers subject to personal income tax in Italy (IRPEF), regardless of whether or not they are resident in the country. It is not only the property owners who can take advantage of this tax break, but anyone who exercises the right of residence on the property where the work is being carried out, including tenants, co-tenants, members of divided and undivided cooperatives, individual entrepreneurs and more.

Certain people who help bear the costs of the restructuring work also have the right to deduct money from their taxes if they have proof of transfers and invoices for the expenses incurred from 1st January 2016. This includes family members, the spouse or civil partner of the owner of the property where the work is being done, the member of the civil union, the holder of a mortgage loan contract etc.

Cost ceiling for the restructuring allowance

Those who renovate their property can take advantage of a 50% IRPEF deduction up to a maximum expenditure of 96 thousand euro per property unit.

This is an annual limit and refers to the individual property and its contents considered as a whole. The renovation work carried out on belongings do not, in fact, have an independent spending limit, but fall within the limit provided for the housing unit.

If the building work carried out over the course of the year is the continuation of works started in previous years, the maximum limit of deductible expenses will be determined by taking into account those incurred in the other years: you will be entitled to the benefits only if the amount you have already spent and benefited from has not exceeded the overall limit provided. The deduction from your tax is divided into 10 equal annual instalments, starting in the year in which the expenditure was started and thence into the following years.

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