At the end of December 2018, the Italian government approved the budget law (Legge di Bilancio) for 2019. Many tax benefits that were valid in 2018 for renovating houses have been reconfirmed for 2019. Others have been modified.
If you are a taxpayer in Italy (and you are already, if you rent out your house), then you could consider modernizing or renovating your property in 2019 while enjoying substantial tax breaks. You receive most of these allowances or tax benefits in the form of a tax credit that is spread over 10 years.
Some of these tax benefits are, in the case of the sale of the house, transferable to the new owner.
These are the current tax measures for those who own a property in Italy.
Bonus ristrutturazione (renovation premium)
All taxpayers subject to personal income tax (IRPEF) and resident in Italy are entitled to a renovation premium for renovation costs incurred in 2019. The right to this tax credit is not limited to the owners of a home: also family members living together with the owner, are entitled to this tax credit. The invoices and bank transfers of the renovation work must then be in their name. Those who want to renovate a home can enjoy a 50% reduction in personal income tax with a maximum spending limit of 96,000 euros per apartment or home. The tax deduction is divided into 10 identical annual installments.
Ecobonus (energy saving solutions)
The ecobonus is a tax credit (IRPEF) for the costs you incur in your existing home in 2019 to improve energy efficiency. The right to this tax credit is not only for those living in Italy. The tax credit is spread over a period of 10 years with a maximum spending limit of 100,000 euros. The amount to which you are entitled depends on the type of work you perform. If you sell your house you are obliged to transfer the remaining tax credit to the new owner.
These activities are eligible for a 50% tax credit: doors and windows, awnings, biomass boiler and class A condensing boiler.
These works qualify for a 65% tax credit: interventions that reduce the energy demand of your home, installation of a geothermal heat pump, a heat pump, combined heat and power, insulate your home properly and make ajar airtight, installing solar panels, solar boiler combi or micro combined heat and power (CHP) ).
Sism bonus (protection against earthquakes)
This tax benefit is an income tax credit for costs that you incur to protect your home from earthquakes if it is in a risk area (zones 1 and 2 and since this year also in zone 3). The tax benefits are valid for costs incurred between January 1, 2017 and December 31, 2021. For activities that lead to a reduction of 1 risk class of your property you are entitled to a tax credit of 70% of the costs, for activities that lead to a reduction You are entitled to a deduction of 80% of the costs of 2 risk classes.
This bonus has a threshold of 96,000 euros per apartment or per house and is divided into 5 identical annual installments. The tax reduction applies to buildings in zones 1 and 2, so with a high earthquake risk, but since 2019 also for zone 3.
Bonus Mobili e Elettrodomestici (Tax deduction for installation and equipment costs)
Furniture and class A + household appliances (class A for ovens) are 50% deductible from personal income tax with a maximum expenditure of 10,000 euros in 2019. The bonus is divided into 10 equal annual installments. Only taxpayers who have started renovating their property after January 1, 2018 are entitled to this tax reduction, since the purchase of furniture and appliances applies to a house being renovated. Purchases must be paid by bank transfer or credit card. The tax deduction applies to installation costs, household appliances in class A + such as a refrigerator, freezer, washing machine, dryer, dishwasher, hot plates or for an oven in class A. Televisions are excluded.
Bonus Verde (green bonus)
The green bonus was introduced last year and was extended this year. In 2019, this tax benefit consists of 36% of the costs for the care, renovation and irrigation of your garden. You can enjoy this tax benefit for the construction of the garden of your home, for fencing, irrigation systems, the construction of wells, green roofs and hanging gardens. The tax credit is spread over a period of 10 years with a limit of 5,000 euros per house, so a maximum of 1,800 euros in tax relief. The right to this tax credit is not limited to the owners of the home, but also family members who live with the owner are entitled to it. In this case, the invoices and bank transfers of the work must be in their name.
source: Guidelines newsletter February 2019
author: Kris Mahieu, owner of Alba Toscana Immobiliare