Tax deductions
The full picture of the expenses you can recover.
OpenProperty · Deductions
Home renovation tax credits and deductions
The deduction itself is not the complicated part: the way it has to be paid and reported is. Most home renovation deductions that get lost are not lost because the requirements were missing, but because a bank transfer was made on the wrong form.
01 · The map
Which works qualify for a home renovation tax deduction
Building tax relief is not a single measure: it is a family of measures, each with its own percentage, spending cap and formalities. The first thing to establish is which of them your work falls under, because everything else follows from that.
| Works | Category | Extra formality |
|---|---|---|
| Extraordinary maintenance | Building renovation | Building permit where required |
| Ordinary maintenance | Only on shared parts of a condominium | Certificate from the building manager |
| Restoration and conservative rehabilitation | Building renovation | Building permit |
| Energy efficiency upgrades | Energy saving | Filing with ENEA (the national energy agency) within the deadline |
| Solar panels and storage | Building renovation or energy saving | Filings with the competent body |
| Removal of architectural barriers | Dedicated measure | Sworn technical statement on the requirements |
| Gardens and green areas | Dedicated measure | Traceable payment |
| Furniture and household appliances | Linked to a renovation in progress | Filing with ENEA for some items |
| Seismic risk reduction | Dedicated measure | Sworn statement and risk classification |
Percentages, spending caps and the number of years the deduction is spread over change often, and have been revised several times in recent years. That is exactly why you will not find them given as figures on this page: they are checked against the year in which the expense is incurred.
02 · The claimant
Who is entitled to the deduction
You do not have to be the owner. The right belongs to whoever actually bears the cost and holds a suitable legal title to the property.
- Owner or bare owner, and anyone holding a real right of enjoyment such as usufruct, use or right of habitation.
- Tenant with a registered lease or borrower under a free loan agreement, with the owner's consent to the works.
- Family member living with the holder of the property, if they bear the cost and the property is not let to third parties.
- Unmarried partner living together, on the terms recognised by the law.
- Prospective buyer already given possession, with a registered preliminary contract.
- Condominium owners, for their share (by thousandths) of the works on shared parts.
One rule settles most doubts: whoever pays, claims. If the invoice is in one person's name and the transfer comes from another person's account, the link still has to be proved, and it often does not hold up when checked.
03 · Where everything is lost
The bonifico parlante
This is where most deductions are lost, and the mistake is trivial: you pay with an ordinary transfer instead of the one dedicated to tax deductions, known as the bonifico parlante (literally the "talking transfer"). Banks offer it under that exact name, and in online banking it is usually a separate option.
The dedicated transfer triggers the withholding tax that the bank pays over on behalf of the building firm, and that is the trail the Agenzia delle Entrate (the Italian Revenue Agency) uses to recognise the transaction. Without that trail, the expense exists but the tax relief does not.
The payment reference
It must refer to the law granting the relief. Bank forms offer it already written: you have to pick the right one for the type of works.
The codice fiscale of the claimant
Enter the codice fiscale (Italian tax code) of the person who will put the expense in their tax return, not necessarily the account holder.
The payee's partita IVA
The partita IVA (Italian VAT number) of the firm carrying out the works, as shown on the invoice.
One transfer per invoice
Do not bundle several invoices into one payment: it makes matching them difficult if there is a check.
If the transfer has already gone wrong
It is not always lost, but the options are narrow.
- Some banks let you repeat the payment in the correct form and reverse the first one
- The firm can refund the amount and receive it again through the right transfer
- If the firm declared the payment anyway, in some cases the deduction has been saved
- None of these is automatic: they have to be assessed straight away, not once the works are finished
04 · The deadlines
The mandatory filings
Some works require a filing within a set time from when the works end. It is a formality separate from the payment and from the tax return, and leaving it out can be challenged.
- Filing with ENEA for works that bring energy savings, within the set time from the end of the works.
- Sworn technical statements for anti-seismic works and for the removal of architectural barriers.
- Advance notice to the ASL (the local health authority), when building site safety rules require it.
- Certificate from the building manager for condominium works, stating the share by thousandths that falls to you.
- Building permit (CILA, SCIA or full permit) depending on the nature of the works and the rules of the Comune (the municipality).
For condominium works the building manager's certificate is the key document: without it, the expense is not documented even if the works were carried out and paid for properly. It is the first thing to ask for, not the last.
05 · What to avoid
The mistakes that cancel a home renovation deduction
They are always the same ones, and what they have in common is that they look like details at the moment you make them.
- Ordinary transfer instead of the dedicated one: it is the most common mistake and almost always final.
- Payment in cash or by cheque: no deduction, whatever the amount.
- Invoice in the name of someone who does not pay, or payment from an account the claimant does not hold.
- Missed ENEA filing for works that required one.
- Vague invoices such as "building works": the description must make it possible to identify the works that qualify for relief.
- Paperwork thrown away after the first instalment: it has to be kept until the time limit for checks on the last instalment used has expired, so for many years.
06 · Over the years
What happens in the following years
A building deduction does not end in the year of the expense: it is spread over several equal annual instalments, and this has consequences worth knowing in advance.
- The annual instalment is lost if there is not enough tax to absorb it: without sufficient tax to deduct it from, that instalment cannot be recovered in later years.
- Anyone under the regime forfettario (the flat-rate scheme) with no other ordinarily taxed income has no tax to deduct from: something to consider before starting the works.
- If the property is sold, the remaining instalments normally pass to the buyer, unless the deed states otherwise.
- In the event of death, the remaining instalments pass to the heir who keeps actual, direct possession of the property.
- The expenses increase the tax cost of the property and reduce any capital gain on sale: the invoices are useful twice.
- For properties that have had works with high deductions there are specific capital gains rules, with a longer time horizon than the ordinary five years.
Frequently asked
The questions that keep coming up
I paid with a normal transfer. Have I lost everything?
Not necessarily, but it has to be dealt with straight away. Some banks let you reverse the payment and make it again in the correct form; alternatively, the firm can refund the amount and receive it again through the dedicated transfer.
There are also cases where the deduction was recognised because the firm had declared the payment anyway, but this is not a route to count on: it is a remedy, not a rule.
I rent my home. Can I deduct the works?
Yes, if you have a registered lease and the owner has consented to the works. What matters is that you bear the cost and that it is documented in your name.
Keep the owner's consent in writing: in a check, it is the document that shows your occupation of the property legitimately supports the works.
The works are on the condominium. What do I have to do?
Very little: pay your share to the building manager and ask for the certificate showing the amount of the works, your share by thousandths and the fact that you paid during the year.
The building manager takes care of the transfers, filings and formalities. All you need is that document, and that is what you bring to the practice.
Is it still worth it, with the lower percentages?
It depends on your tax and on the works. With lower percentages, having enough tax to absorb the annual instalments matters even more: without it, the benefit stays on paper.
The calculation is done before the building site opens, looking at your income over the coming years and not just the headline percentage.
Let's talk
The check has to happen before the first payment
Afterwards, almost nothing can be fixed: an ordinary transfer made instead of the dedicated one cannot be corrected once the works are finished.