Home improvement tax incentives

In December 2019 the Italian government has approved the Italian Budget Law (Legge di Bilancio) for 2020. Lots of property related tax incentives, which were valid in 2019, have been reconfirmed for 2020, some of which now include amendments. There is also an interesting newcomer. If you are a taxpayer in Italy, now is the time to start those home improvement jobs or renovations on your property, that you have been putting off. Most of these tax credits are to be used over the next 10 years, and in case you sell your house, the tax credit balance (for some types of incentives) can be transferred to the new owner. Let’s have a look at the different property related tax incentives. 


Bonus ristrutturazione (Renovation bonus)
Bonus ristrutturazione (Renovation bonus)
All taxpayers who are subject to personal income tax (IRPEF), or those who are residing in Italy, are entitled to the Renovation bonus, for renovation expenses incurred in 2020. The right to this tax credit is not limited to the owners only. Family members, who live with the owner, can also opt for this tax credit, if they hold the invoices and bank transfers related to the renovation work.
Those who renovate a property can take advantage of an IRPEF deduction of 50% with a maximum spending limit of 96.000 euro per real estate unit. The deduction is divided into 10 annual instalments of the same amount. The first instalment can be deducted in the year in which the expenditure was incurred.

Ecobonus
EcobonusEcobonus is an income tax credit (IRPEF) for expenses incurred for the energy efficiency of your home in 2020. The deduction of the Ecobonus is valid for both residents and non-residents. The tax credit is spread over a period of 10 years with a maximum spending limit of 100.000 euro. You are entitled to a different percentage of Ecobonus tax deduction depending on the type of intervention. If you sell your home, the remaining tax credit has to be transferred to the new owner.
The following interventions qualify for 50% tax credit: doors and windows, solar shading, biomass boilers and class A condensation boilers.
These interventions qualify for 65% tax credit: total energy requalification of the building, advanced thermal adaptation system, hot air heaters with condensation technology, heat pumps, heat pump water heaters, building envelope insulation, solar thermal collectors, stand-alone power system, micro-CHP.

Sismabonus (Seismic Bonus)
Sismabonus (Seismic Bonus)
The Sismabonus is an income tax credit for expenses incurred for seismic security interventions on buildings which are situated in high-risk areas (zone 1 and 2) and since 2019 also in zone 3. The deduction of the Sismabonus is valid for costs incurred from 1 January 2017 until 31 December 2021. You are entitled to a tax deduction of 70% of the expenses if the interventions carried out lead to a reduction of one seismic design category. If the intervention leads to the reduction of two seismic design categories, the deduction percentage is raised to 80%.
The Sismabonus has a maximum spending limit of 96.000 euro per real estate unit and must be divided into five annual instalments of the same amount. The first instalment can be deducted in the year in which the expenditure was incurred. The tax reduction concerns buildings in zones 1 and 2, those with high seismic hazard, but since 2019 also those in zone 3.

Bonus Mobili e Elettrodomestici (furniture and home appliances bonus)
furniture and home appliances bonus
The furniture and home appliances bonus consists of a 50% tax reduction on a maximum expenditure of 10.000 euro for the purchase of furniture and class A+ home appliances (class A for ovens) in 2019. The bonus is divided into 10 equal instalments. The first instalment can be deducted in the year in which the expenditure was incurred.
Only taxpayers who started the renovation of their property after 1 January 2018 are entitled to the tax reduction, which applies for the purchase of furniture and appliances for the house which is being renovated. Your purchases have to be paid for by bank transfer or by credit card.
You can take advantage of the furniture and home appliances bonus for the purchase of ovens (energy rating A) and appliances with energy rating A+ like refrigerators, freezers, washing machines, tumble dryers, dishwashers and cooking hobs. Televisions are excluded. 

Bonus Verde (Green bonus)
Bonus Verde (Green bonus)
The green bonus was introduced in 2018 and has been reconfirmed for 2020. This bonus allows you to deduct 36% of the costs incurred for the care, renovation and irrigation of private green areas in 2020. In detail, the interventions for which you can take advantage of the Green bonus are: arrangement of private green spaces of existing buildings, fencing, irrigation systems and construction of wells, green roofs and hanging gardens.
The tax credit is spread over a period of 10 years with a maximum spending limit of 5.000 euro per property (max. 1.800 euro tax reduction). This right to tax credit is not limited to the owners only, but also family members, who live together with the owner. They can opt for this tax credit, if they hold the invoices and bank transfers related to the expenditure.

Bonus Facciate (Facades bonus)
This is the absolute newcomer to the list. The tax benefit consists of no less than 90% of the cost of work done on the facades of buildings located in historical centers or densely built-up areas, so-called zones A and B. Like most other fiscal benefits, this bonus is also spread over 10 years in the form of tax credit. The bonus applies to invoices drawn up in 2020. That means that jobs, which were started in 2019 but not yet invoiced, are also eligible. The bonus only applies to facade works. Works on windows, gutters or downspouts, or electric cables are excluded. 

Finally, also new is that all of the above benefits gradually decrease for incomes of more than 120,000 euro per year, and, the invoices must be paid by bank transfer or credit card.