In the context of the condominium renovationsthe Italian tax legislation provides for specific concessions for the restoration of building heritage and energy requalification of buildings.
The tax deduction for renovation works is regulated by theArticle 16-bis of the TUIR (Consolidated Law on Income Taxes).
Currently, for the expenses incurred up to 31 December 2024the deduction is set at 50% of the expenses incurredwith a maximum spending limit of 96 thousand euros per real estate unit.
However, if it is not extended further, starting from 1st January 2025the deduction will drop to 36%with a maximum spending limit of 48 thousand euros.
For works on the common areas of residential buildings, the deduction is recognized based on the year in which the transfer is made by the condominium administration and not based on the year in which the individual condominium owners pay their shares to the condominium.
Case Study: Payments in 2024 and Invoicing in 2025
To clarify how the deduction works, Revenue Agency responds to a taxpayer who writes to the email address Fiscooggi.it.
Let’s assume that in 2024 the condominium owners pay their shares for the renovation works to the condominium. Part of these amounts will be invoiced by the executing company in 2024 and departs in 2025. The question that arises is: for the sums paid in 2024 but invoiced in 2025, what will be the applicable deduction percentage??
The deduction depends on the year in which the transfer is made by the condominium. Therefore, the condominium owners will be able to benefit from the 50% tax deduction for all transfers that the condominium administrator will make during 2024. For transfers that will be made in 2025, unless a new extension occurs, the deduction will be 36%.
