Starting from 1 January 2018, Art. 1, paragraphs 12-15 of Law 205/2017 (so-called Budget Law 2018) introduced a new deduction from income tax payable by natural persons (IRPEF) equal to 36% of documented expenses, incurred and effectively borne by the tax payer, up to a maximum amount of 5,000 Euro per real estate unit used as a residential building (therefore the maximum deduction due is equal to 1,800 Euro);
The special terms are available without being connected to a building renovation and without any building permit.
Increase the volume and surface of green areas present in our cities, in order to give an economic boost to the sector while combating undeclared labour, improve air quality and make our cities more attractive for tourists.
Assofloro Lombardia has submitted a Legal Advice Request to the Central Regulatory Department of the Revenue Agency to shed light on some clarifications, in order to correctly benefit from the Green Bonus, as described below.
Who can take advantage of the special terms?
PRIVATE INDIVIDUALS AND CONDOMINIUMS
Beneficiaries of the deduction are all those who own the housing unit (owners, beneficial owners and holders of other real rights), as well as those who hold the housing unit with a suitable title (lease and loan).
Therefore, new buildings, offices, shops and warehouses are excluded from the special terms.
This deduction is also available for costs incurred for interventions carried out on the external common parts of condominium buildings, up to a maximum total amount of 5,000 Euro per housing unit for residential use.
In this case, the deduction is available to the individual condominium within the limit of the quota attributable to it on the condition that the same was effectively paid to the condominium within the deadline for filing the tax return.
What is eligible?
The deduction is available for greening, ex novo or of radical renovation, of uncovered private areas of existing buildings, real estate units, appurtenances or fences, for irrigation systems and construction of wells, as well as for the construction of green cover and roof gardens, arrangement of gardens of historical interest. Also eligible, are design and maintenance costs related to execution of the indicated interventions.
Recalling the contents of the technical report to the Budget Law 2018 (in the absence of specific indication in the regulation), the Revenue Agency has specified that the interventions must be of an extraordinary nature. The consequence of which is that eligibility extends to works that are part of an intervention related to the entire garden or affected area, consisting of ex novo green parts, or the renewal of those already existing. Therefore, also the supply of plants and shrubs, even in mobile pots (if said positioning is part of a broader intervention of residential property greening).
What is not eligible?
Expenses for annual ordinary maintenance (example, pruning, lawn mowing, etc.) of pre-existing gardens (both private and condominium ones) are not eligible interventions.
Also excluded are works carried out using supplementary labour/materials and the simple purchase of bots for balcony use.
Interventions that come under the special terms
- GREEN SET-UP: Gardens – Roof Gardens – Terraces and Balconies (including condominium ones). With regard to interventions concerning balconies and terraces, it is specified that expenditure incurred for the purchase and planting of trees, bushes and shrubs of a perennial and non-seasonal nature is eligible.
- EXPENSES FOR THE INSTALLATION OR RECONSTRUCTION OF IRRIGATION SYSTEMS AND CONSTRUCTION OF WELLS
- RECOVERY OF THE GREENERY OF GARDENS OF HISTORICAL INTEREST
- SUPPLY OF PLANTS AND SHRUBS AND THEIR PLANTING
- RE-QUALIFICATION OF LAWNS (with the exception of those used for for-profit sports purposes)
- PLANNING COSTS
- WORKS AND INTERVENTIONS FOR THE TRANSFORMATION OF AN UNCULTIVATED AREA INTO FLOWER BEDS AND GARDENS
What amounts are involved?
- EXPENSES INCURRED FROM 1 JANUARY 2018 TO 31 DECEMBER 2018 (date of bank transfer or payment by 31/12/2018 is valid)
- 36% IRPEF DEDUCTION
- MAXIMUM ELIGIBLE LIMIT 5,000 EURO (INCLUDING VAT)
- DISTRIBUTION OF THE DEDUCTION MUST TAKE PLACE IN 10 RECURRENT ANNUAL INSTALMENTS OF EQUAL AMOUNT
- COMBINED WITH MULTIPLE PROPERTIES: (Bonus combined with interventions on several owned properties. The bonus can be due several times with separate spending limits)
What should be indicated on the invoice?
Enter the following wording on the invoice:
In compliance with Law 205 of 2017, Art. 1, paragraphs 12-15
For use of the deductibility of 36%
How to proceed with payments?
To benefit from the bonus it is necessary to make payments with instruments that allow traceability, such as:
- ORDINARY BANK TRANSFER
- CHEQUES (BANK AND/OR POSTAL)
- DEBIT CARD (ATM)
- CREDIT CARDS
In the case of interventions in condominium areas, the deduction is due to the individual condominium within the limit of the amount attributable to it, provided that the same was paid to the condominium within the deadline for filing the tax return.
Some clarifications already provided by the Revenue Agency
- In the case of works carried out at condominiums, the withholding tax of 4% applies if they fall within the tax deduction. The 8% withholding tax by credit institutions for suppliers of labour does not apply.
- The provisions indicated in Art. 16-a of Italian Presidential Decree No. 917/1986 (TUIR), which establish reduction of the bonus to 50% for interventions made on properties used in a promiscuous manner, become applicable.
- In the case of interventions on common and private parts (also of the same building), the bonus doubles. One (of 5 thousand Euro) is payable for work on the “private” garden and the other (for the same amount) with reference to the portion of expenditure attributable for interventions on the condominium garden.
Pending a specific official provision containing further application clarifications, the Association has submitted a Legal Advice Request to the Revenue Agency. This was done in order to obtain some clarifications regarding interpretative doubts arising from reading of the regulatory provisions.
In particular, the solutions proposed by the Association, and shared with the pool of experts (magistrate Massimiliano Atelli and Dr. Anna De Toni), are the following:
– extraordinary “greening” interventions include extraordinary maintenance interventions on tall trees/plants, including but not limited to pruning, felling, planting, etc. Thus excluding from eligible interventions ordinary maintenance in the sense of repetitive operations, such as the trimming of hedges in obligatory form, lawn mowing, etc. In addition, these procedures of an extraordinary nature may also include interventions for the care of monumental trees included in the national land register and for the realisation of permanent green setting-up of balconies and terraces. This may also include elements that support the setting-up itself, such as the purchase of large tanks to contain substrates and any tutoring for climbing plants with the function of a “green” barrier against fine particles, to be placed in a permanent position on balconies and/or terrace;
– the costs of planning and maintenance related to the execution of such interventions should also include costs incurred for project realisation and, in particular, referring to detailed surveys and estimates regarding the site covered by the design, including but not limited to microclimatic and environmental assessments, soil analysis, phytoiatric and phytostatical surveys on any vegetation present, rendered by technicians, specialists, etc.