04 / 10 / 2023

Tax deductions available on purchase

TAX DEDUCTIONS AVAILABLE TO BUYERS:
Great opportunities for those who purchase fully renovated housing units.

Let’s take a closer look at the benefit provided by Art. 16-bis, paragraph 3 of the TUIR:

Deduction for the purchase of housing units in fully renovated buildings

WHO IS ELIGIBLE?

each buyer if the restoration, conservative renovation, or building renovation involved the entire building in which the sold or assigned unit is located;
provided that the housing unit is sold by the construction or renovation company, or by the cooperative that carried out the above works;
in relation to residential housing units;
provided that the sale or assignment of the property takes place within 18 months of the completion of the works.

HOW MUCH IS THE BENEFIT?

The deduction due to the buyer or assignee is equal to 50% of the value of the work performed, considered by law equal to 25% of the purchase price of the housing unit and in any case up to a maximum of €96,000, as stated in the public deed of purchase or assignment.

Example:

Housing unit with a price of €200,000 can benefit from a deduction of 50% on €50,000 (25% of €200,000). The IRPEF deduction is therefore €25,000.
Housing unit with a price of €500,000 can benefit from a deduction of 50% on €96,000 (maximum deductible cap), since 25% of €500,000 (€125,000) exceeds the maximum deductible amount of €96,000. The IRPEF deduction in this case is €48,000.

Moreover, according to Circular no. 24 of the Revenue Agency dated 10.6.2004 (section 5 1.3), if together with the housing unit a related accessory (such as a garage or storage room) is purchased, the spending cap of €96,000 refers not separately but jointly to both properties (main home and accessory).

The Revenue Agency has also clarified that, with regard to this deduction, the same rules as for the Ecobonus apply concerning the exclusion of expenses related to building extensions. Finally, it should be noted that in a response provided at “Telefisco” on 27.10.2020, the Revenue Agency confirmed that this deduction may also be subject to a “discount on the price” or “transfer of the deduction” (even though the reference legislation does not explicitly list it among transferable deductions).

REQUIREMENTS AND DOCUMENTS NEEDED to benefit from the deduction:

The taxpayer must hold:

the deed of purchase, assignment, or registered preliminary agreement, showing compliance with the above deadlines. If these acts do not state the date of completion of the works or do not specify that the property is part of a fully renovated building, the buyer must request from the construction company or cooperative a declaration certifying compliance with the required conditions.

2. Deduction for the purchase of garages related to construction costs

This is the benefit provided by Art. 16-bis, paragraph 1, letter d) of the TUIR:

WHO IS ELIGIBLE?

for the purchase of garages or parking spaces already built (only for expenses attributable to their construction);
for the construction of garages or parking spaces, even in common ownership (provided there is a legal link of pertinence to a residential unit).

The benefit is subject to the following conditions:

there must be ownership or a sales contract for a future asset of the completed or under-construction garage;
there must be a link of pertinence with a residential unit owned by the taxpayer; if the garage is under construction, there must be a legal obligation to establish such pertinence;
the construction company must document the costs attributable solely to the construction of the garages, separate from accessory costs (which are not eligible).

REQUIREMENTS AND DOCUMENTS NEEDED to benefit from the garage deduction:

deed of purchase, or registered preliminary contract, proving pertinence;
builder’s declaration indicating the construction costs;
bank or postal transfer for the payments made.

Here are OUR buildings that benefit from these tax deductions:

Villa Wisteria
Palazzo Haggi
Residenze Machiavelli
Ville Sabotino

Glenda Heidebrunn
Communications and Marketing