Italy renovation tax bonus rules require strict residency and property use compliance

In Italy, strict regulations govern the eligibility for building renovation tax deductions (bonus ristrutturazioni) under Article 16-bis of the Tuir. To claim these deductions, taxpayers must maintain a specific legal link to the property, which often requires proof of cohabitation or specific residency status. If a spouse pays for renovations on a property owned by the other spouse, the taxpayer must ensure they meet the legal requirements regarding residency to avoid losing the tax benefit.

Furthermore, the intended use of a property after renovation can impact eligibility. A ruling by the Second Instance Tax Court of Veneto (sentence no. 431/2026) addressed a case where the Agenzia delle Entrate denied deductions after a residential property was converted into a tourist accommodation (B&B). The court's decision emphasizes that the final destination of the property is a critical factor in determining whether the residential nature required for the tax bonus is preserved.