How to save tax up to 6,400 euros from property renovation

The tax credit for expenditure on energy, functional and aesthetic upgrading of buildings has been extended for another two years and will be valid until 31 December 2024. This means that those planning to renovate or repair their home will gain a tax credit which they will see with the submitting their tax return.

However, the Tax Office “unlocks” the tax bonus on the condition that the taxpayers have paid with electronic money for the work done on the property. The tax deduction is distributed equally over a period of four years and amounts to 40% of the amount of eligible costs for receiving the services, with a maximum total cost limit of 16,000 euros.

The maximum amount of discount is, therefore, a total of 6,400 euros. This means that if someone spent €5,000 in 2022 renovating their apartment, they will save a total of €2,000 in income tax, which is spread over four years: €500 is deducted from the 2023 tax return statement , 500 euros from the 2024 statement, 500 euros from the 2025 bill and another 500 euros from the 2026 statement.

For the calculation of the discount, only the costs for the works are taken into account, and not the costs for the supply of materials. There are two conditions for the discount to apply:

• Expenses must be proven with legal documents.
• Payment of expenses must be made by electronic means of payment (debit, credit or prepaid cards, electronic banking services) or through a payment service provider.

Terms and beneficiaries

Taxpayers planning to renovate, repair or upgrade their properties through the end of 2024 should be aware of the following:

Beneficiaries of the deduction from the income tax are the natural persons who have the right of full ownership or usufruct in the building in which the eligible costs of energy, functional and aesthetic upgrading are carried out. Also, natural persons who have the right of small ownership over the property are also beneficiaries, provided that they use it either as a main or secondary residence or as a headquarters or branch for the exercise of their business activity.

In the above cases, the beneficiary of the reduction is only the person in whose name the relevant document is issued.

Block of flats

If the expenses concern common areas of the building, the administrator of the apartment building / property complex pays the expenses electronically and these are taken into account for the beneficiaries according to their co-ownership, based on a relevant certificate issued by the administrator and in which the ATAK will be registered of the property located within the building for which the relevant expenditure is incurred.

Eligible energy, functional and aesthetic costs include:

• Installation of thermal insulation
• Replacement of frames, glazing and external protective sheets
• Heating / cooling system installation or upgrade
• Lighting upgrade of the common areas of the apartment building
• Installation / replacement of hydraulic installation
• Installation / replacement of electrical installation
• Roof maintenance / repair
• Repair of masonry / painting inside and outside
• Installation of fixed or mobile shading systems
• Upgrade or install a lift