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DO YOU WANT TO RESTRUCTURE? TAKE ADVANTAGE OF THE BONUS!

  • 05/06/2022
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The TUIR ( Consolidated Income Tax Act, Presidential Decree 917/1986, art. 16-bis) grants a 36% deduction of documented expenses, for a total ceiling of € 48,000 per property unit, incurred by taxpayers who own or hold, on the basis of a suitable title, the property subject to the renovation works governed therein.

The tax relief, deductible over 10 years, has been temporarily increased to 50% until 31 December 2024.

The maximum expenditure ceiling is € 96,000, (referring to the single property unit).

From 1 January 2025, unless further extensions are granted, the allowance will return to 36% on a maximum amount of € 48.000. 


FACILITATED BUILDINGS

* Multi-family building (even in a condominium)
* Single-family building
* Real estate unit (as long as it is part of a condominium)
The benefit also covers the appurtenances (boxes, courtyards, cellars, car parks, etc.).


PERMITTED WORKS

Permitted works must be carried out on existing buildings and not on new buildings:

* ordinary maintenance on common parts of residential buildings 

* Extraordinary maintenance, restoration and renovation, building renovation carried out on common parts of residential buildings and on single residential building units of any cadastral category, including rural ones, owned or held, and on their appurtenances * reconstruction or restoration of property damaged by calamitous events, even if not included among the interventions referred to in the two previous points, provided that a state of emergency has been declared

* the construction of garages or parking spaces, including those under common ownership
* interventions aimed at eliminating architectural barriers
* interventions aimed at preventing the risk of committing illegal acts

* interventions aimed at preventing the risk of committing illegal acts
* works aimed at avoiding accidents at work
* wiring of the buildings and containment of noise pollution
* work to replace the emergency generator set with latest-generation gas-powered emergency generators


BENEFICIARIES

* Individuals (outside the exercise of business, art or profession) 

* Condominium owners
* Members of cooperatives (divided and undivided)
* Members of simple companies
* Individual entrepreneurs (exclusively for properties that are not instrumental or goods).

Owners and holders of non-residential real estate units can also benefit from the facility, provided that they have actually incurred the related expenses in the period provided for by law and are subject to the payment of IRPEF.


CIRCULAR 57/E/1998 OF THE MINISTRY OF FINANCE

In order to correctly identify in which cases the renovation bonus is granted, reference is made to the Ministry of Finance Circular no. 57/E/1998.
The deduction concerns different works in relation to the circumstance that the real estate unit is included or not in a condominium.

1. Property unit included in a condominium
In this hypothesis, the benefit is granted for ordinary and extraordinary maintenance, restoration and conservative renovation and building restructuring carried out on the common parts of buildings.
To the senses of the art. 1117 c.c. they constitute common parts the ground, the foundations, the weight-bearing walls, the staircases, the elevator, the systems, the technical premises, the residence of the doorman, etc.
The condominium must have prevailing residential use (when the area devoted to housing exceeds the threshold of 50%), even if there is only one owner or the expenses were incurred by a single condominium.
The bonus will be recognized to the individual condominium on the basis of thousandths of ownership.

2. Single real estate unit (absence of condominium)
In this hypothesis are allowed all the interventions referred to in paragraph 1 with the exclusion of ordinary maintenance.

According to the tenor of the circular, "It is necessary to take into account the absorbing character of the "superior" category with respect to the "inferior" one": since the ordinary maintenance interventions belong to an inferior category (so-called "trailing interventions") with respect to those of extraordinary maintenance (so-called "leading interventions"), the ordinary maintenance works are deductible only if they are absorbed by the extraordinary maintenance works.


ACCUMULATION WITH DIFFERENT BENEFITS

The Italian revenue Agency has clarified that for interventions other than those covered by the Superbonus, the benefits already provided for by current legislation remain applicable.
There are two possible scenarios:

1. A single intervention and different categories of benefits
In this case, the taxpayer can make use of only one of the above-mentioned benefits for the same expenses, choosing the most economically convenient one.
It is necessary to comply with the obligations specifically provided for in relation to the facility chosen.

2. More than one intervention and different eligible categories
If, on the other hand, more than one intervention is carried out that can be classified as different categories of benefits, the taxpayer can benefit from each facilitation, respecting the expenditure limits provided for the single facilitations.
The expenses related to the different interventions must be accounted for separately. It is also necessary to comply with the obligations specifically provided for each deduction.


ALTERNATIVES TO THE DEDUCTION

As an alternative to the deduction from the tax return, it is possible to opt for:

a) a discount on the invoice: a contribution, in the form of a discount on the amount due, up to a maximum amount equal to the amount due, advanced by the company that carried out the work.
By means of the discount on the invoice, the taxpayer can upgrade his property even if he does not have immediate liquidity.
In turn, the supplier will be able to choose whether to deduct from his tax return the amount corresponding to the discount granted or to assign the corresponding tax credit. It should be noted that the supplier is not obliged to make the discount: it is simply an option allowed by law to the taxpayer.

b) assignment of the tax credit: assignment to a third party (the firm that carried out the work or the Post Office, banks, financial intermediaries, insurance groups) of the tax credit corresponding to the deductible work.
Through this instrument it is possible to obtain immediately the cash used to pay for the works, without waiting for the years in which the deduction can be distributed.
A sum will be deducted from the tax credit: it’s the payment for the transfer.

FAIRNESS OF EXPENSES AND CONFORMITY CERTIFICATE

When the taxpayer exercises the option of invoice discount or assignment of tax credit, the Financial Law 2022 requires the production of the following documentation:

* compliance certificate of the expenses incurred by a qualified technician
* compliance visa (asseveration) by a professional

By certifying the congruity of the expenses, the qualified technician shall asseverate their congruity with respect to certain parameters indicated in the MITE decree of 14 February 2022 (for the interventions indicated therein), the Regional price lists or the DEI price lists.
The technician must attach to the certification the estimated metric calculation indicating the maximum specific costs for each type of intervention.
The professional's certificate of conformity certifies the existence of the conditions for the recognition of the deduction.
If these costs are higher than those eligible, the deduction is applied within the maximum limits.
The compliance certificate and the asseveration are not required in the following cases:

. individual income tax return submitted on the basis of the pre-filled form
. individual income tax return made through the withholding agent
. interventions carried out in free building
. interventions whose total amount does not exceed € 10,000

From 1 January 2022, the expenses incurred for the issuance of the above documentation are always tax deductible and enjoy the same rate associated with the bonus deduction.
The Italian revenue Agency has clarified that the expenses incurred for certification and endorsement are also deductible in the period 12 November - 31 December 2021, (period of validity of the anti-fraud decree, repealed and merged into the Financial Law 2022).

THE NEW ANTI-FRAUD MEASURES

The need to act on the numerous frauds related to building bonuses has led to the issuance of the Fraud decree.
The new measures apply to all building bonuses that include the options of credit transfer and invoice discount.
Excluded are the green bonus and the furniture bonus, for which the relief is only available through deduction.
Here is a summary of the main changes introduced by the decree:
1. possibility of making up to three assignments of credit: the last two assignments must be made to banks, financial intermediaries and insurance companies
2. prohibition of partial assignments: the credit must be assigned in full
3. introduction of the unique identification code: as from 1 May 2022, the credit will be assigned a code, which must be communicated on the occasion of each assignment
4. tougher penalties for false declarations: penalties for false declarations or serious omissions range from 2 to 5 years' imprisonment and from a € 50,000 to € 100,000 fine
5. use of credits subject to criminal seizure: such credits may only be used after the criminal effects of the measure have ceased
6. amendment of Article 316 bis of the Criminal Code: embezzlement of public funds and not only that of the State is also punishable under criminal law; the offence of misappropriation of public funds also includes subsidies, which were previously excluded.


THE ENERGY DECREE

The Energy Decree (Decree-Law No. 17/2022) has made certain changes regarding the options of the invoice discount and the transfer of credit in building bonuses.
Firstly, corporate income tax (IRES) taxpayers and VAT holders who must file their income tax returns by 30 November 2022 have until 15 October 2022 to notify the Revenue Agency of their intention to take advantage of the invoice discount or credit transfer options.
The new provisions apply to notifications of the first assignment of the credit or invoice discount sent to the Revenue Agency with effect from 1 May 2022.


THE AID DECREE

In the event that the number of possible assignments of credit had been exhausted, the ‘energy decree' (l.d. 17/2022) had already allowed a further assignment by the banks in favour of parties with whom they had entered into a current account agreement.
The "aid decree" (Article 14, paragraph 1, letters b and c, d.l. 50/2022) intervened in the matter by allowing the advance assignment of credit by credit institutions to private professional customers who had entered into a current account agreement with the bank itself or with the parent bank (without the option of further assignment).
In essence, the aid decree specified the nature of the credit assignees, through an explicit reference to Article 6, paragraph 2-quinques, of Legislative Decree No. 58/1998 (Consolidated Law on Financial Intermediation, pursuant to Articles 8 and 21 of Law No. 52 of 6 February 1996).
As specified by the Revenue Agency (Circular 19/E of 27 May 2022), 'professional' customers are defined as those who possess the experience, knowledge and expertise necessary to make informed investment decisions and are able to correctly assess the risks involved.

MAINTENANCE OF THE IRPEF DEDUCTION IN CASE OF RESALE

In order to maintain the IRPEF deduction relating to the expenses incurred for the recovery of the building heritage and for energy requalification, in case of resale the selling party, with the consent of the purchasing party, must expressly declare at the time of the stipulation to reserve in its favour the deductions not yet used.
In the absence of an express declaration, the seller definitively loses the possibility of recovering the above-mentioned deductions.
The seller is obliged to produce the relevant documentation to the competent authorities.


Would you like to buy a property taking advantage of the renovation bonus?
Contact us to make an appointment with one of our technicians.


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