Italy Renovation Tax Credit 2026: How to Recover 50% of Your Expenses

The renovation tax credit is the main tax benefit for those undertaking building recovery work on their home in Italy. In 2026, the IRPEF deduction is confirmed at 50% on first homes (with reduced rates in subsequent years), on a spending cap of €96,000 per real estate unit. Properly leveraging this can save up to €48,000 in taxes over 10 years.

To estimate total renovation cost and remaining taxes, start with the VAT calculator with renovation rates.

Tax Credit Rates 2026-2028

The 2025 Budget Law restructured rates, distinguishing first home from other properties:

Year	First home	Other properties
2025	50%	36%
2026	50%	36%
2027	36%	30%
2028	30%	30%

It is therefore advisable to concentrate major works by end of 2026, before the rate reduction.

Maximum Spending Cap

Maximum deductible spending is €96,000 per real estate unit per intervention. The tax deduction is calculated on this cap.

Example

Marco renovates his first home in 2026 for €80,000:

• Total deduction: 80,000 × 50% = €40,000
• Spread over 10 annual installments of €4,000 each
• IRPEF recovery: €4,000/year for 10 years

If Marco's annual IRPEF is €5,000, he can use the deduction fully. If only €2,500, he recovers only €2,500 (excess is NOT recoverable in subsequent years).

Eligible Works under the 50% Credit

Article 16-bis of TUIR and Annex A of D.Lgs. 192/2005 list eligible interventions:

Ordinary Maintenance (only condominium common areas)

• Painting facades, stairs, lobbies
• Floor replacement
• System repairs

Extraordinary Maintenance (individual units)

• Bathroom and kitchen renovations
• Boiler, AC replacement
• Plumbing, electrical, gas system overhaul
• Window, shutter and blind replacement
• Floor and wall covering renewal
• Internal walls, false ceilings, thermal/acoustic insulation
• Sanitary fixtures and faucet replacement

Restoration and Conservative Refurbishment

• Structural restoration
• Conservation of historical/artistic elements
• Use change (with planning permits)

Building Renovation

• Demolition and reconstruction
• Volume modification within 100% of existing
• Expansions with planning permission

Additional Eligible Works

• Architectural barrier removal (also with specific 75% bonus)
• Home security (alarms, armored doors, anti-shatter glass)
• Anti-seismic measures (additional dedicated bonuses)
• Asbestos remediation
• Structured cabling for fiber optic

Documents and Procedures

ENEA Notification (within 90 days)

For energy efficiency works (boiler, windows, insulation), telematic notification to ENEA is required within 90 days of work completion. Penalty: total deduction loss.

Tracked Payments: "Bonifico Parlante"

Payments must be made via "speaking" bank or postal transfer with:

• Specific reason citing TUIR art. 16-bis
• Beneficiary's tax code
• Payee's tax code or VAT number

Speaking transfers automatically apply 8% withholding on payee.

Documents to Keep

• Invoices and tax receipts
• Bank/postal speaking transfers
• CILA or other building permit (if required by Municipality)
• ENEA notification (if applicable)
• Condominium receipts
• For common areas: thousandths table

Retention

All documentation must be kept for 10 years from last installment deducted in tax return.

Beneficiaries and Compatibility

Who Can Deduct

• Property owner
• Bare ownership holder
• Holder of real rights (usufruct, use, habitation)
• Tenant with registered contract
• Loan recipient with registered contract
• Cohabiting family member of owner
• Separated/divorced spouse assigned to the house

Credit Transfer and Invoice Discount

Since 2024, credit transfer/invoice discount options are limited. Still possible only for:

• Architectural barrier interventions
• Seismic zone works started before 17/02/2023
• PNRR projects

For most taxpayers, the deduction is recovered only via tax return, in 10 annual installments.

Combinable with Other Bonuses

The renovation bonus is combinable with other incentives, but not on the same expenses:

• Furniture bonus 2026: 50% on €5,000 for furniture and class A appliances bought for renovated home
• Green bonus: 36% up to €5,000 for gardens, terraces, green fences
• Ecobonus: 65% for specific energy efficiency works (condensing boilers, heat pumps, low-transmittance windows)
• Sismabonus: 50-85% for seismic interventions
• Architectural barriers bonus: 75% for elevators, stairlifts, ramps

Practical Calculation Examples

Example 1: First Home Bathroom Renovation

• Total cost: €12,000
• Deduction: 12,000 × 50% = €6,000
• Annual installments: €600/year for 10 years
• Net tax saving: €6,000 recovered in IRPEF

Example 2: Complete Apartment Renovation

• Total cost: €60,000 (windows, systems, bathroom, kitchen)
• Deduction: 60,000 × 50% = €30,000
• Annual installments: €3,000/year for 10 years
• ENEA notification for windows (within 90 days)
• Speaking transfer with TUIR art. 16-bis reference

Example 3: Condominium Common Area Works

• Total works cost: €200,000
• Marco's share (80/1,000 thousandths): €16,000
• Marco's deduction: 16,000 × 50% = €8,000
• Annual installments: €800/year for 10 years
• Documents from administrator: thousandths table and receipts

Mistakes to Avoid

• Payment via ordinary transfer: deduction invalidated if not "speaking"
• Missing ENEA notification: total bonus loss for those works
• Non-eligible works: simple internal painting on individual unit doesn't qualify
• Documents not retained: Tax Agency requires everything during checks
• Erroneous combination: same expense CAN'T be used for two different bonuses
• Deduction higher than IRPEF: excess is lost

FAQ

Can I use the renovation bonus for second home?

Yes, but at 36% rate in 2026 (vs 50% first home). Spending cap remains €96,000 per unit.

What is a "speaking" transfer?

A special bank transfer with reason citing TUIR art. 16-bis, tax codes of buyer and supplier. All Italian online banks issue them.

Can I deduct works done in 2025?

Yes, expenses incurred in 2025 are deducted in 2026-2035 returns (10 installments). 2025 rate: 50% first home, 36% other.

What if I sell the house during deduction?

Remaining installments automatically pass to new owner, unless agreed otherwise in notarial deed.

Can I transfer the credit to a bank?

Only specific cases (barrier removal, pre-2023 seismic works, PNRR). Otherwise, recovery only via tax return.

Is furniture bonus automatic with renovation bonus?

No, must be requested separately in 730 return. Valid only for furniture bought AFTER work start, for the same renovated home.

Conclusion

The 2026 renovation bonus at 50% is a concrete opportunity to recover up to €48,000 on first home works, but requires rigor on payments, documents, and ENEA notification. Planning works by 2026 (before reduction to 36% in 2027) is financially advantageous.

To integrate total cost calculation, use the VAT calculator with reduced renovation rates (10% for most works).