The issue of tax deductions for condominium renovation work is a topic of great interest to many property owners. Recently, on the site FiscoTodaya reader’s question was posted regarding the applicable deductions for work carried out in 2024 and 2025.
In this article, we will analyze the response provided by the Revenue Agency and discuss the implications for condominium owners who intend to undertake renovation work in the near future.
How will tax deductions for condominium renovations change?
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The reader’s question
The reader asked the Revenue Agency for clarifications regarding the deduction for renovation work in his condominium:
“I would like clarification regarding condominium renovation work. The payments that condominium owners make in 2024 to the condominium will be partly invoiced by the executing company in 2024 and partly in 2025. My question is: for the sums paid in 2024 but invoiced in 2025, will the deductions be 50% or 36%?”
This question highlights a common doubt among condominium owners regarding when expenses become deductible, considering that deductions could undergo a significant change in the near future.
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The Revenue Agency’s response
According to the Revenue Agency, if there is no new legislative extension, the deduction for interventions to recover the building heritage and energy requalification of buildings, currently set at 50%, will drop to 36% starting from January 1, 2025.
This deduction is provided for by article 16-bis of the Consolidated Law on Income Tax (TUIR).
As regards expenses related to works on the common areas of residential buildings, the Agency clarifies that the tax relief applies based on the year in which the condominium administrator make the transfer for the payment of the works, and not based on the year in which the individual condominium owners make the payments of their shares.
This regulatory interpretation means that condominium owners will be able to benefit from the 50% deduction by December 31, 2024.
Therefore, to maximize the tax benefit, it is advisable for the condominium owners and the condominium administrator to carefully plan the timing of payments.
