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It is expected that in the coming days a provision will be activated that provides for a tax deduction of up to 1,600 euros in this year’s tax settlement with the issuance of a relevant ministerial decision.
The tax deduction will cover real estate renovation, repair and energy improvements made in 2020 and will be calculated at 40% of the amount spent on property repair or renovation.
That decision has been delayed for more than a year due to the pandemic. It is expected to determine the conditions, terms and procedure to apply a 40% tax deduction.
More detail:
• The expenses incurred from 1-1-2020 to 12-31-2022 by owners of homes and other buildings to pay for services related to the energy, functional and aesthetic improvement of their properties, will be reduced by 40%. % Of the amount of your income tax for the next four years.
• The total amount of deductible expenses will be divided equally over the next four years and the amount corresponding to each year will reduce the certified personal income tax to the taxpayer during that year.
• In each case there will be a maximum of 16,000 euros in the amount of expenses that may be taken into account. Therefore, the maximum amount of discount that can be granted to each owner is 6,400 euros, that is, 40% of the 16,000 euros.
• The most profitable are the taxpayers who will declare income higher than 16,000 euros this year since for those who belong to this category the tax reaches or exceeds 1,600 euros per year in the case of employees or retirees.
• To calculate the discount, only the costs of the works will be taken into account and not the costs of the supplies of materials. In other words, the tax deduction refers only to the work of electricians, plumbers and other craftsmen and not to the cost of materials.
The conditions
The necessary conditions are valid for the deduction of 40% of the expenses for works of energy, functional and aesthetic conditioning of buildings from the owner’s income tax for the next 4 years:
1. Buildings for which expenses are incurred have not yet been or will not be included in a building improvement program.
2. Expenses must be credited with legal documents, that is, with receipts for retail transactions or invoices for the provision of services by artisans.
3. Expenses have been paid by electronic means of payment, that is, by credit or debit or prepaid cards, or by electronic banking, or by electronic purse, etc. Expenses paid in cash are not taken into account.
As long as the deduction of 40% of the renovation expenses lasts, they will not lose the deduction of 5% on the taxable income of the rent, which corresponds to the repair and maintenance expenses, is valid every year and is calculated automatically, without obligation of presentation. of the supporting documents to the tax office.
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