In Italy, for the renovation of your home, there are some tax advantages. In this first article we’ll talk about the 36% deduction.
The Finance Act 2008 (law 449/97), which has been extended until 31 December of 2010, allows home owners a deduction of 36% from personal income tax (so called IRPEF) for renovation works at their home in Italy.
These renovation works can be divided in:
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manutenzione ordinaria: current maintenance works such as substitution of floors, windows, …
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manutenzione straordinaria: extraordinary maintenance works such as renovating the roof, building of technical spaces, …
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restauro e risanamento conservativo: restoration and conservative recovery works such as reparation of roof, floors without changing the original materials
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Ristrutturazione edilizia: restructuring works such as demolition and rebuilding of some parts of the building
The benefit is available for each renovated property, has a maximum of 48.000 €, and is paid out over a period of up to 10 years maximum.
The deduction is valid for all people who have an income in Italy and who pay regularly income taxes, the benefit may be divided in case of more than one owner.
An example:
If a property owner has done renovation works for a total cost of 40.000 €, then he may deduct 14.400 € from his personal income tax over 10 years, which means a tax saving of 1.440 € every year.
Another advantage of the Finance Act is that the VAT amount (so called IVA) is fixed at 10% for the provision of services and supplies of materials, goods for renovation works.
How to obtain the benefit?
First of all, before starting the renovation works, it’s necessary to send a notification to the “Agenzia delle Entrate di Pescara (adress Via Rio Sparto 21, 65100 Pescara). It’s very important to send the notification before initiating the works!!
The notification, which can be downloaded on the website of the “Agenzia delle Entrate”, must contain the following items:
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copy of the planning permission for the renovation works (statement of building activity beginning or DIA, concessione edilizia)
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copy of the land and building cadastral survey (visure catastale)
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copy of the payment receipts of the Municipal tax on buildings (ICI) from 1997
After the works
To profit from the benefit all the works done, need to be paid by bank transfer; a short description of the finished works is required and the data, VAT number of the contractor or builder needs to be indicated.
For a possible control after having finished the works, it’s important to keep all the receipts of the bank transfers and the receipts of the purchased materials.
For more information you can always have a look at the following link http://www.agenziaentrate.it/ilwwcm/connect/Nsi/Documentazione/Guide+Fiscali/Guida+ristrutturazioni+edilizie+2008/
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Is it possible as a non resident to profit of these tax benefits?
Yes also as a non resident it is possible however you must have an activity, an earning in Italy. So only if you pay taxes in Italy you can profit of these tax benefits