Tax deductions on renovation expenses are an important relief, but what happens if the cohabiting family member who paid for these expenses passes away?
This doubt was raised by a reader on the FiscoOggi website, who asked the Revenue Agency if it was possible to continue to take advantage of the deductions in the event of the death of a cohabiting family member who had deducted the expenses for the renovation of a house owned by the son.
In this article, we will see what the law provides and what clarifications are provided by the Revenue Agency.
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Reader’s Question: Restructuring and Death
The reader, in particular, asked:
“As a cohabiting family member, my father deducted the expenses for the renovation of the house I owned where we both lived. I ask if, after his death, I can deduct the renovation expenses, even though I did not receive the renovated house by inheritance, since it had always been my property. I have found numerous examples that talk about transferring tax relief for the inherited house, but not when the property is not owned by the deceased but by the son”.
The situation described by the reader is not uncommon: it often happens that a cohabiting family member bears the costs of renovating a property that is not owned by him. The question here is whether, upon the death of the family member, the child can continue to benefit from tax deductions, even if the property has not been inherited.
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The Revenue Agency’s response: yes, deductions are transferred
The Revenue Agency responded affirmatively to the reader’s question, clarifying that it is possible to continue to benefit from the residual installments of tax deductions even after the death of the cohabiting family member. However, this is only possible on condition that the heir, i.e. the child in this case, have physical and direct possession of the property.
In other words, he or she must be the owner and resident of the property in question.
Even if the house was not inherited through succession, but was already owned by the son, the latter can still continue to benefit from the residual deductions that were due to the deceased father. This is because the legal and material link with the property is not interrupted, allowing the right to tax benefits to be maintained.
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The regulatory reference: circular no. 17/2023
The Revenue Agency based its response on the circular no. 17/2023which clarifies several issues related to tax deductions for renovation expenses. This circular confirms that, in the event of the death of the cohabiting family member who incurred the expenses, the heir can continue to benefit from the remaining installments of the deduction, provided that he maintains direct ownership of the property.
The circular also specifies that the transfer of the deductions does not depend on whether the property has been inherited or not, but on whether the heir is the owner and the material holder of the property. This clarification is particularly important for those who find themselves in situations similar to the one described by the reader.
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Physical and direct detention: a fundamental requirement
A crucial aspect that emerges from the Revenue Agency’s response is the physical and direct possession of the property. This requirement is essential to continue to benefit from tax deductions.
Physical possession refers to the fact that the heir, even if he has not acquired the property through inheritance, must still physically own it and use it as a home.
The concept of direct possession is therefore strictly connected to the ownership of the property and its actual use. In this way, the child of the deceased who continues to live in the property and maintains ownership of it can continue to enjoy the tax benefits that were initially attributed to the father.
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Continuity of tax breaks: what to do in such cases?
For those who find themselves in a situation similar to the one described by the reader, it is essential to check some aspects to ensure that you can continue to benefit from the tax deductions. First of all, it is necessary that the heir maintain ownership and residence in the property. This ensures compliance with the condition of material and direct possession, as specified by the Revenue Agency.
Furthermore, it is useful to keep all documentation relating to renovation expenses and deductions already used by the deceased family member. This is because, in the event of checks, it will be necessary to demonstrate the right to continue using the residual tax breaks.
