Italy gave us a giant gift in 2020. Tax breaks. Big ones! Big as in 50% of renovation costs. You heard that right. Personally, I didn’t stop jumping up and down until our architect called today and changed our first design meeting to a virtual call.
Her interior design partner has someone who tested positive for COVID in her office. On top of that, our architect’s husband has someone in his office who tested positive for COVID this week.
Needless to say, we had no problems changing to a virtual meeting via zoom. Since we don’t know exactly what’s going to happen yet, today’s update is a focus on the positive. Tax breaks that is, not COVID tests. That joke is now a little too close to home.
2020 Italian Tax Breaks on Renovations
Renovating a home in Italy is not easy or cheap. Walls are stone, brick and concrete, not wood and drywall like in America. Italy’s aggressive tax breaks are meant to stimulate investment in old homes in urban areas that have historically weighed down the Italian property. A market that’s been hit particularly hard in 2020 due to COVID.
Fortunately for our finances, our groovy 70s lux pad in Bardonecchia, Italy is both old and urban. Here are some of the highlights from Italy’s 2020 tax breaks on home refurbishments in urban zones. These deductions are available to anyone who is a resident and pays tax in Italy.
- 50% deduction for renovations with a price ceiling of €96,000 for each property. I hope we spend far less than €96,000 euros on our home renovation, but one things for sure, being able to take a 50% tax reduction on €96,000 is a huge help!
- 50 to 90% tax deduction on restoring façades including balconies, windows, eaves, gutters and thermal coating insulation. We’ve got a balcony, we’ve got windows older than I am!
- 50% tax deduction on the purchase price of energy-efficient home appliances, limit of €10,000. That SMEG Fridge I’ve been eyeing better be green. I certainly know our new water heater, dishwasher, washer, and dryer will be! Note to self, find out if water conserving toilets count.
- 50% to 65% “econonus” tax break for energy renovation of old buildings.
- While this one is more for freestanding homes, than our little condo, it’s worth sharing. 36% “garden bonus” or “green bonus” on personal income tax for anyone spending more than €5,000 on the construction of green roofs, irrigation systems, or other sustainable energy additions.
Why We Want to Renovate our Italian Home in 2020
We managed to move to Italy rent and mortgage free, but these large tax breaks mean Renovating Bardonecchia is now a wise investment in our future! The only hitch? For these deductions to apply, the renovation work must be invoiced and paid for electronically in 2020.
Seeing as it’s already October and COVID numbers are on the rise, I’m beginning to worry about timing. Fingers crossed, the Italian government will approve these tax breaks extension in 2021. Something tells me, we’re going to need it.
In case you’re wondering, yes Bardonecchia is absolutely live-able as is. The only hard part is the dishwasher that crapped out on us during quarantine. As much as I cook that’s not much fun, but doable for sure. Still, here are nine other really good reasons behind trying to make our renovation dreams happen sooner, rather than later.
9 reasons why our property in northern Italy needs renovations before we can call it home.
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Between the need for a few American creature comforts and more modern amenities, we simply cannot wait to break ground on our Renovating Bardonecchia project. Renovating Bardonecchia updates coming every Friday!