Tax deductions for construction work: is the owner's consent necessary?


Emma Potter

Tax deductions for building works represent an important opportunity for owners and holders of properties. However, to benefit from these benefits, it is essential that possession of the property is legitimate and correctly documented.

According to what has been clarified by the Revenue Agency, the relief is also available in cases where the possession of the property derives from a different title from a rental or loan agreement, provided that this title is suitable to ensure the legal and material availability of the property.

This means that the holder must be able to demonstrate, through a duly registered deedto have the right to use the property when the works begin and to bear the related expenses.

Request to the Revenue Agency

In the specific case dealt with by the Revenue Agency in response no. 112 of 23 May 2024, the taxpayer declared to be the owner of development rights of the building and the owner of the land where the building intervention was authorized.

He requested clarification regarding the possibility of taking advantage of the tax benefit provided for by article 16-bis of the TUIR for the expenses incurred for the demolition of the compliant building. The deduction in question amounts to 50% of the expenses incurred from 26 June 2012 to 31 December 2024, up to a maximum of 96,000 euros per real estate unit.

The legislation on tax deductions also includes demolition and reconstruction of existing buildings, as specified by Presidential Decree no. 380/2001. In particular, building renovation interventions include the reconstruction of buildings or parts of them that have collapsed or been demolished, provided that it is possible to ascertain their pre-existing consistency.

In order to benefit from the deductions provided for expenses incurred for building works, the owner of the property must have the owner's consent for the execution of the works. This consensus must be documented and available when work begins.

Furthermore, possession of the property must be duly registered and exist at the time the expenses are incurred, even if the latter are prior to the start of the works. Registration must take place through a deed with a certain date, to guarantee the legal validity of the possession.

Conditions for the Superbonus

As regards the Superbonus, introduced by article 119 of Legislative Decree no. 34/2020, the conditions for the deduction are satisfied not only with a duly registered loan for use or rental contract, but also when the taxpayer disposes of the property under a different title.

This title must guarantee the legal and material availability of the property and must be documented with a deed with a certain date. The start date of the works must be proven by the qualifications, if required, or by a declaration in lieu of an affidavit compliant with Presidential Decree no. 445 of 2000.