HOW TO INVEST IN REAL ESTATE WITH THE PURCHASES BONUS

The bonus purchase is a tax relief designed for the purchaser of real estate units located in buildings undergoing renovation or energy requalification.

Unlike the other building bonuses, in the bonus purchases the tax deduction is related to the purchase value of the property and not to the expenses incurred for the work of upgrading the property.

Let's see in detail which building concessions can be used by the purchaser.

PURCHASE/LEASE OF RESTORED RESIDENTIAL BUILDINGS (Article 16-bis, paragraph 3, Consolidated Income Tax Act)

The beneficiaries are the purchasers or assignees of the following rights on real estate:

. right of full ownership

. right to bare ownership

. other right in rem of enjoyment (usufruct, use, dwelling or surface)

Cohabiting family members and cohabiting partners of the holders of the above rights are also entitled to the benefit.

. the building in which the property unit is located has undergone restoration and renovation work or building renovation

. the works have been carried out by construction or renovation companies and building cooperatives

. the purchase or assignment of the housing unit must take place within and not later than 18 months from the date of completion of the works.

This means that, in order to qualify for the purchase bonus, it is not sufficient for the building to have undergone simple ordinary maintenance (such as, for example, the replacement of building finishes) or extraordinary maintenance (renovation and/or replacement of structural parts).

If the deed or the assignment took place before the completion of the works, it is still possible to use the bonus purchase, but the deduction can only be used from the tax year in which the works on the whole building were completed.

a) ordinary regime (no deadline): 36% rate to be calculated on a lump sum equal to 25% of the sale price (including VAT, if due) or of the assignment value of the property, resulting respectively from the purchase or assignment deed.

The amount on which the deduction is calculated may never exceed € 48,000.00 per property unit.

b) enhanced regime: until 31 December 2024 the deduction is 50% to be calculated on a lump sum equal to 25% of the sale price (including VAT, if due).

The amount on which the deduction is calculated may never exceed € 96,000 per property unit.

In both cases the deduction is spread over 10 years in equal instalments.

Since building works carried out on appurtenances (even if stacked separately) do not benefit from an independent ceiling, the maximum amount refers to the living unit and its appurtenances considered as a whole.

From 1 January 2022, the beneficiary of the purchase bonus can also opt for the transfer of the credit and the discount on the invoice.

In the case of bonus purchases of property units situated in refurbished buildings, payment of the purchase price does not have to be made by bank or postal transfer, as is generally required to take advantage of building deductions.

The important thing is that the sums received from the construction/renovation company :

. have been included in the company's accounts as per the declaration in lieu of affidavit issued by the company

. result from the notarial deed

The deduction can be attributed to the amounts paid on account only if at the date of submission of the tax declaration the preliminary or final deed of sale has been registered.

PURCHASE OF CAR PARKS AND BOXES (art. 16-bis, paragraph 1, letter d, Consolidated Income Tax Act)

The bonus is granted for the construction or purchase of garages and parking spaces.

By "construction" we mean the new construction of garages and parking spaces.

Restructuring with a change of use is not eligible for the bonus.

. purchasers of full ownership rights

. purchasers of the right of bare ownership

. purchasers of other rights in rem of enjoyment (usufruct, use, habitation, surface)

Cohabiting family members and cohabiting partners of the owners of the above rights are also eligible.

In the case of the purchase of garage or parking spaces already built, the deduction is subject to the following conditions:


1. the purchase must be made directly by the builder (other companies and private individuals are excluded)

2. the expenses for the construction of the garage or parking space purchased must be proven by a written certificate issued by the selling party, containing the purchaser's personal details, the cadastral details of the garage/parking space, the identification of the dwelling unit to which the garage is appurtenant, the amount of the construction expenses, and the statement that the certificate is issued for the purposes of the IRPEF deduction pursuant to Article 16-bis of Consolidated Income Tax Act (d.p.r. 917/1986)

3. payments must be made by bank or postal transfer with the reason for payment and the tax code/VAT code of the person who intends to benefit from the deduction

4. formalisation of the appurtenant link between the garage/parking space and the dwelling in a deed with a certain date, registered before the date of submission of the tax declaration in which the taxpayer intends to take advantage of the deduction.

a) ordinary regime (no deadline): 36% rate calculated on the "expenses attributable to the construction" of the boxes and parking spaces.

The deduction is also allowed with regard to the VAT paid on the purchase. The maximum amount on which to calculate the tax deduction is € 48,000.00.

b) enhanced regime: until 31 December 2024 the deduction is 50% of the realisation costs, up to a maximum amount of € 96,000.

In both cases, the deduction is spread over 10 years in equal instalments.

Beneficiaries benefit from the deduction to the extent of the expenses actually incurred and documented in the invoice.

As of 1 January 2022, the beneficiary of the above-mentioned benefit can also opt for the transfer of the credit and the discount on the invoice.

The construction company must document the costs attributable only to the construction of the car parks, which must be kept separate from the accessory costs, which are not eligible for the deduction.

In order to benefit from the deduction, the following must be indicated in the tax declaration:

. the cadastral data identifying the building

. if the work is carried out by the owner

. the registration details of the deed that constitutes the title to the property.

The taxpayer has the duty of retaining and exhibiting the documents relating to the intervention (including permits) at the request of the tax authorities.

Payment must be made by bank or postal transfer containing the following indications:

. reason for payment with reference to the rule that recognizes the deduction (art. 16-bis Consolidated Income Tax Act, d.p.r. 917/1986)

. tax code of the beneficiary or beneficiaries of the deduction, if more than one person is involved

. tax code or VAT number of the beneficiary of the payment


If the sums received by the company that sold the box result from the notarial deed, the taxpayer can still benefit from the relief even if the payment was not made by bank/postal transfer, provided that the seller issues a declaration in lieu of affidavit certifying the company accounting of the price received for the correct determination of the taxable income base (see Circular no. 43/E/2016 of the Revenue Agency).

BONUS FOR PURCHASES IN SEISMIC-RELATED BUILDINGS (art. 16, paragraph 1-septies, decree law 63/2013)

Purchasers of buildings subject to seismic risk reduction interventions benefit from a particularly convenient deduction ranging from 110% to 75%.

The intervention must be carried out by construction or renovation companies and must involve the demolition and reconstruction of the entire building, even with changes to the floor plan if permitted by the urban planning regulations in force.

1. the seismic risk reduction works must be carried out in municipalities falling within the areas classified as seismic risk 1, 2 and 3

2. the works must concern the demolition and reconstruction of entire buildings, also with volumetric variation with respect to the pre-existing building, where the town planning rules in force allow such increase

3. the construction or renovation companies that have carried out the works must sell the buildings within 30 months of the date of completion of the works.

If all the subjective and objective conditions required by the Superbonus are met, the deduction is 110% to be calculated on the purchase price of the individual property unit.

In order to obtain the 110% deduction, expenses relating to demolition and reconstruction work must be incurred between 1 July 2020 and 30 June 2022.

The allowance is available for purchasers who are natural persons and for residential property not falling into categories A/1, A/8 and A/9.

The final deed of sale must be signed by 30 June 2022.

If the deed is stipulated after this date, the purchaser can still benefit from the Ordinary Purchasing Seismbonus if the deed is stipulated by 31 December 2024.

In the absence of the objective conditions required by point 1, the taxpayer will be able to access a deduction equal to 75% or 85% of the purchase price of the individual property unit, provided that the intervention results in a reduction in seismic risk of one or two risk classes respectively (requirement not necessary for the Super Sismabonus Purchases).

The Ordinary Purchases Seismbonus also applies to parties other than individuals (companies) and also to properties falling into the cadastral categories A/1, A/8, A/9, production units or offices.

The deed of sale must be stipulated by 31 December 2024.

In the cases referred to in points 1 and 2:

. the maximum amount of expenditure is always € 96,000 for each unit (including appurtenances)

. the law does not provide for a maximum number of building units that can be purchased by a single person

. the deduction is to be divided into 5 equal annual instalments 

. the price must be stated in the deed of sale

. possibility of transferring the credit to the companies that have carried out the work or to other private parties (but not to credit institutions and financial intermediaries, as expressly provided for by art. 16, p.1-septies, l.d. 63/2013 ).

The Revenue Agency has clarified some fundamental aspects:

. the deduction is available from the year of completion of the works on the entire building

. there is no obligation to pay the price by bank or postal transfer

. the Seismbonus Purchase allowance is also available in case of change of use

. prohibition of accumulation between the Purchases Bonus for building renovation and the Sismabonus Purchases

. compatibility between Ecobonus used by the building company and Sismabonus Purchases in favour of the purchaser, provided that it is possible to identify the expenses related to the different interventions.

The interventions covered by the Sismabonus refer exclusively to constructive renovation works for a building already owned by the taxpayer.

Therefore, the applicable rule is Article 3, paragraph 1, letter d) of the Consolidated Text on Construction.

The category of interventions covered by the Sismabonus Purchase is much broader, as it includes the demolition and reconstruction of entire buildings in order to reduce the seismic risk, even with plano-volumetric changes, provided that the increase is permitted by urban planning rules.

REGULATORY REFERENCES

* Art. 16-bis, paragraph 1, d.p.r. 917/1986 (Consolidated Income Tax Act)

* Art. 3, paragraph 1, lett. c) and d), d.p.r. 380/2001 (Consolidated Text on Construction)

* Minister of Economy and Finance’s decree 153/2002

* Premier's ordinance P.d.C. 3274/2003

* Premier’s ordinance 3274/2003

* Premier’s ordinance 3519/2006

* Art. 16, paragraph 1-septies, d.l. 63/2013

* Art. 119, d.l. 34/2020 (Relaunching decree)

* Article 1, paragraph 37, Law 234/2021 (Financial Law 2022)

* MITE decree of 14 February 2022 (New ceiling decree)

* Decree Law 13/2022 (Superbonus decree)

REVENUE AGENCY

* Circular 29/E/2013

* Circular 43/E/2016

* Circular 7/E/2017

* Circular 13/E/2019

* Circular 24/E/2020

* Circular 30/E/2020

* Resolution 34/2020

* Answer to question 325/2020

* Answer to question 19/2021

* Answer to question 70/2021

* Answer to question 191/2021

* Answer to question 318/2021

* Answer to question 437/2021

* Answer to question 556/2021

* Answer to question 57/2022