Building renovation: 50% deduction until 2024

Building renovation: what is it? Guide to the 50% deduction extended until 2024

Building renovation is the set of interventions that transform a building into something different from what it was initially.

The Home Restructuring Bonus is part of the building bonuses provided for up to 2024. In fact, for the 50% Restructuring Bonus , the possibilities of making the discount on the invoice and the transfer of credit have been extended (Article 1, paragraph 29) for the years 2022, 2023 and 2024.
 
Building renovations: I'm Elia Caneppele and today let's see what the Bonus is and how it works in detail with the deduction of 50 percent up to 96,000 euros of expenditure.

Do you want to renovate your house? Then you're in the right place. We will see in detail which works are allowed, the formalities necessary for the assignment of the credit and the discount on the invoice, many other tips to be able to take advantage of this convenient restructuring deduction .


 

Definition of renovation works

Have you decided to renovate a property? Then it is essential that you understand the technical terminology used in the regulations.

For this reason I decided to start this guide by defining some fundamental terms:
 

• renovations,
• building renovation,
• ordinary and extra-ordinary maintenance,
• renovation bonus.

Let's start with the basics.

In construction we can refer to renovation works as the complex of interventions that give new life to a certain structure.
 

Definition of building renovation: what is it and what interventions does it include?

The definition is given to us by the Consolidated Law on Construction.

As we have already seen at the beginning, the building renovation is the set of interventions and works that transform buildings into building organisms in whole or in part different from what they were before.

Without getting lost in too many technicalities, the majority of building renovation interventions are two: ordinary building renovation and extraordinary building renovation (they are governed by different rules).
 

• Ordinary maintenance : activities to keep the structure, systems and fixtures efficient (nothing done from scratch);
• Extraordinary maintenance: works to substantially redevelop with changes to structural sections of the house.

What is the difference between the two?
While the first has a conservative purpose such as updating certain elements of the building, but not changing the structure, the second requires a change from the starting point in the physiognomy of the building.

I suggest you also see: bonus facades, the complete guide of Windowo.
 

Definition of the 50% Restructuring Bonus until 31 December 2024

Now let's start talking about restructuring deductions.

We define the Restructuring Bonus as a tax relief on building renovation interventions which normally consists of a tax deduction of 36% on the costs incurred, up to 48,000 euros per single property (art. 16-bis of Presidential Decree 917/86).
 
Let's take an example to make everything clearer: if you spend 100,000 euros, you can deduct a 50% limit of 96,000 euros.

The tax deduction 50 must be divided into 10 equal annual installments.
 

Deduction for building renovation: what governs it

We have seen how normally the tax relief on building renovation interventions is governed by article 16-bis of the TUIR and consists of an Irpef deduction of 36% of the expenses, up to a total amount not exceeding 48,000 euros per property unit.

However, for expenses incurred on 31 December 2024, the deduction is raised to 50% and the maximum spending limit is 96,000 euros.

This was possible because the deduction (and the potential transfer of the discount) was extended until 31 December 2024 by article 1 paragraph 37 letter b of the 2022 Budget Law.
 

Credit transfer and option for the contribution in the form of a discount

From the Relaunch Decree onwards, the possibility of assigning the credit arises also in the situation of the restructuring bonus (art.121 of the decree-law n.34 of 2020)

When the deduction arises, the subjects pay the costs for building renovation interventions can do two things:
 

• discount on the invoice : to have a contribution, in the form of a discount on the amount due, advanced by the suppliers who carried out the interventions. In turn, suppliers can recover it in the form of a tax credit and have the option of transferring the credit to other subjects;
• credit transfer: transfer the tax credit of the same amount to credit institutions or other intermediaries, with the option of subsequent transfer to other subjects.

 

Restructuring bonus: compliance approval and certification of congruity

However, you must keep in mind two new requirements.

The extension on the tax deduction, in fact, also for the 2022 restructuring bonus, goes hand in hand with the obligation relating to the approval of compliance and the certification of price congruity .

The possibility of assigning the credit or discount on the invoice must be communicated by the professional who affixed the compliance approval. That is, by the person who carried out the initial documentary check on the presence of the requirements to take advantage of the 50 percent restructuring bonus.

Don't you know how much it costs to renovate your home ? Read our article completely dedicated to the topic.


 

Who is entitled to the restructuring tax deductions?

Ordinary maintenance is facilitated only for interventions on common parts in condominiums.

All taxpayers subject to personal income tax (Irpef), resident or not in the territory of the State, can access the bonus.

If you support the building renovation costs, you can be entitled to the subsidy even if you are not the owner of the property.

In fact, the facilitation is also up to the holders of real or personal rights of enjoyment.

Here are the qualified parties:
 

• owner or naked owner;
• holder of a real right of enjoyment (usufruct, use, dwelling or surface);
• tenant or borrower;
• cooperative members;
• simple partnerships;
• individual entrepreneurs, only for properties that do not fall under instrumental or commodity.
• cohabiting family member of the owner and the member of the civil union;
• separate spouse assignee of the property;
• cohabitant more uxorio.

 

Tax deductions for restructuring and purchase of properties to be restored

An income tax deduction is foreseen, within the maximum amount already seen of 96,000 euros, also for the buyers of refurbished residential buildings.

This deduction for restructuring is due in the case of building renovation interventions carried out by companies that within 18 months from the date of completion of the works provide for the sale or assignment of the property.

Can the future buyer of a property on which the works will be carried out also deduct 50% of the costs for building renovation works? Yes, but a preliminary sales contract must be signed and registered.
 

Renovations, 50% deduction: for free building

The Revenue Agency also gives the possibility to have access to the 50% deduction for renovations even in the absence of a qualification .

What do you need in this case?
 

1. substitutive declaration of the deed of notoriety indicating the start date of the works;
2. certification that the restructuring interventions are among those that can be facilitated;
3. conservation of invoices related to the interventions;
4. payments made by speaking transfer.

Those who renovate the house on their own can take advantage of the 50% deduction only for the costs of buying materials.

If you are interested in restructuring tax deductions , then I suggest you also read the article dedicated to 10% reduced VAT for restructuring. You can always find it on the Windowo blog.

Thanks for your attention, I hope this restructuring tax deduction guide is useful to you.