Italian tax legislation provides important benefits for those who carry out building renovation work, but it is not always clear who is entitled to the benefit, especially in particular situations such as the one described by the reader of TaxTodaythe Revenue Agency portal.
Here is the case analyzed.
Advertisement – Advertising
The reader’s question: a practical case of free loan and deductions
The question posed to the portal TaxToday addresses a fairly common situation but full of tax implications.
The reader asks:
“My wife owns a house that she has given to her sister on free loan. We would shortly like to carry out some work on this property for which the deduction for building renovations is foreseen. The question is the following: since I am financially dependent on myself, can I deduct the expenses I will incur as a cohabiting spouse?”
This question touches on several relevant aspects of tax legislation: on the one hand, the concept of free loan and how this affects the availability of the property; on the other, the right to deductions for i cohabiting family members of the owner, provided for by article 16-bis of the TUIR.
Furthermore, the theme of economic support and family taxation emerges, since the reader underlines that he is fiscally dependent on his wife.
Advertisement – Advertising
The legislation: who can benefit from the deductions?
Article 16-bis of the TUIR provides for the possibility of deducting the 50% of the expenses incurred for building renovation interventions. However, to be eligible for this deduction, certain requirements must be met.
The beneficiaries also include the cohabiting family members of the owner of the property subject to the interventions, provided that:
- Cohabitation status exists at the time of payment of expenses;
- The house is available of the family member who bears the expenses.
Cohabiting family members, according to the legislation, include:
- the spouse;
- relatives within the third degree;
- the cognates within the second degree.
Advertisement – Advertising
The response of the Revenue Agency
In this specific case, the Revenue Agency has clarified that the cohabiting spouse cannot take advantage of the deduction. The reason lies in the lack of a fundamental requirement: the availability of the property. The house, in fact, was given on free loan to another family member (the owner’s sister) and can therefore not be used either by the owner or by his cohabiting spouse.
This detail, apparently technical, is instead crucial for determining the right to deduction. In fact, even if the cohabiting spouse was fiscally dependent and supported the renovation costs, the fact that the property is not available excludes the possibility of accessing the tax benefit.
