Financial

– What is the “financial”
– Maximum ceiling of the financial incentives
– Field of the financial’s application
– Entities admitted to the financial incentives
– Incentivable measures with the financial
– How to access
– To know more..

Update 2018 | Budget Law 2018 (SOGU No. 62 of 29 December 2017)
Throughout the 2018 (with the same procedures as in 2017 ), the replacement costs of the heating systems are extended with:

– heat pumps;
– class A condensing boilers with simultaneous use of advanced thermoregulation systems, belonging to classes V, VI or VIII;
– condensing hot air generators (without other requirements);
– hybrid systems composed of condensing boiler and heat pumps, assembled and expressly designed to work in combination;
– micro-CHP plant

The previous deductions will fall to 50% for:

– class A boilers without advanced thermoregulation;
– biomass appliances.

Deductions will no longer be permitted for condensation boilers belonging to a class lower than A.

1. What is the Financial

The tax relief consists of deductions from IRPEF (personal income tax) or IRES (corporate income tax) and is granted when are performed measures that increase the level of energy efficiency of existing buildings.
In particular, deductions are recognized if the expenses have been incurred for:

– reduction of energy demand for heating;
– thermal improvement of the building (insulation – floors – windows, including window frames);
– solar panels’ installation;
– replacement of winter air conditioning systems .

This last category is the one that affects heat pumps, providing the replacement of winter air conditioning systems. So the replacement, full or partial, of existing winter air conditioning systems with systems equipped with gas absorption heat pumps (technology known to be characterized by high efficiency, thanks to the retrieval of renewable energy from the environment) and the simultaneous development of the distribution system.
In order to access incentives it is necessary to replace an existing heating system, with or without hot water production for sanitary purposes, with a new plant.
As known, the tax deduction for these types of measures was launched in 2007 with subsequent regulatory instruments repeatedly extended. Also for 2017 the incentives have been extended to the 31rst December 2017 with the following amounts: (TABLE)

2. Maximum ceiling of the financial incentives

The deduction must be divided into ten annual installments of the same amount, in the year in which the expenditure is incurred and in the following years.
For the type of intervention involving the heat pumps, the maximum ceiling of possible tax deduction is equal to 30,000 euros for each measure. Since the tax deduction is equal to 65%, it means that the total expenditure that can benefit from the maximum deduction is equal to € 46,150 (in this case, in fact, 65% corresponds to just € 30,000). Obviously, if the planned measure has a higher cost, it can still be realized, but the maximum deductible expense will be 30,000 euros (the deduction percentage will therefore be reduced, but it will still be possible to use it).

3. Field of the financial’s application

For winter air-conditioning system the replacement concerns the existing one with systems equipped with gas-absorption heat pumps.
The incentives can be obtained for measures made to improve the efficiency of the existing heating systems, while are excluded from it all the new installed systems and replacement on buildings that requires significant renovation. In these cases, in fact, there is an obligation (DM 28/2011) to use efficient heat production systems, which use renewable sources for a part of the produced heat.
This incentive presupposes, as mentioned, a replacement of an existing plant, therefore it is not applicable even in case of intervention on existing buildings without a heating system.

4.Entities admitted to the financial incentives

All taxpayers who hold taxable income can benefit from the 65% tax deduction, in particular:

– natural persons;
– taxpayers earning business income (individuals, partnerships, corporations);
– associations between professionals;
– public and private bodies that do not carry out commercial activities.

Among the natural persons can benefit from the deduction also:

– holders of a real right on the property;
– the condòmini, for measures on the common condominium parts;
– the tenants;
– those who have their property on loan.

It should be noted that tax deductions can only be requested by those who use the properties on which the measure takes place. Therefore, for a company it is not possible to use the deduction for interventions carried out on leased buildings.
The benefit is translated into a tax deduction on income taxes, therefore the beneficiaries are all those who have an income as a natural person (IRPEF) or as an enterprise and / or company (IRES).
For expenses incurred from January 1, 2017 to December 31, 2021 for measured made to improve energy of common parts of condominium buildings, including those that entitle the largest deductions of 70 and 75%, condominiums which, in the year prior in which occoured the expenditure incurrence, are found in the so-called “no tax area”, so they are ” incapable ” (taxpayers who have an annual tax due less than deductions, from dependent work, pension or self-employment,) can assign a credit equal to the due Irpef deduction.

5. Interventions incentivable with the Financial

The following items can be counted in the energy saving intervention costs:

– supply and installation of heat pumps;
– supply and installation of all the thermal, mechanical, electrical and electronic equipment necessary system’s functioning;
– dismantling and decommissioning of the existing winter air conditioning system;
– the masonry works connected to the realization of the intervention;
– possible interventions on the distribution network, on the water treatment systems, on the control and regulation devices as well as on the emission systems;
– the professional expenses related to the intervention.

In practice, costs include the ones for the purchase of heat pumps and also all those necessary to make the whole winter air-conditioning system work better.

6. How to access to the Financial

To take advantage of this privilege, some simple steps are required.
First of all, it should be noted that the 65% tax deduction should not be requested from the Inland Revenue (unless the intervention continues beyond the tax year), but it must be communicated to ENEA, with the presumption that the one who makes this communication has complied with all the prescribed provisions.
It is necessary to send within 90 days (through the ENEA website):

– copy of the certificate of energy qualification (Annex A to the “buildings decree” – DM 19 February 2007)
– the information sheet (Annex E or F to the “buildings decree”), relating to the measures carried out.

It is also necessary to keep the documents which certify compliance with all of the requirements:

– asseveration of the qualified technician if and when necessary;
– asseveration for condominium interventions that allow deductions of 70 and 75%;
– declaration by the manufacturer of heat pumps and thermostatic valves, if necessary;
– receipt of documents’ transmission to ENEA;
– invoices and tax receipts;
– transfers and payments’ receipts

In the case of interventions carried out on common condominium parts, the copy of the assembly resolution and the one of the millesimal cost allocation table must also be kept and, if necessary, presented to the Financial Administration.
If works are carried out by the owner of the building, the declaration of consent to the execution of them must be preserved and exhibited.

7. To know more …

For all the details and to know more about the tax deduction for building renovations, the “Tax concessions for energy saving” guide, updated to 12 September 2017, is available on the website of the Revenue Agency.