December 7, 2022

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When does the property renewal tax credit expire?

to Procopi Hatzenikolaou

For the first time, an increase in receipts was recorded for property renovation work. This fact is attributed to the discount offered to taxpayers, which contributed to an increase in the collection of value-added tax from specific categories, while at the same time the income of professionals in this sector increases compared to previous years.

This development leads the finance staff to change the original plan, which provided for the receipt of the relevant deduction at the end of 2022. In particular, it is planned (no final decision has been made) to extend the tax deduction for those who proceed with renovation work. In any case, those planning to renew would do well if they did it now without waiting for government decisions.

According to the legislation, property owners can save up to 1,600 euros in tax due to them if they make repairs to their property and have the relevant bills in place. The discount is up to 40% of the expenses up to a maximum (expenses) of 16,000 euros. That is, taxpayers for works worth 16,000 euros will receive a 40% discount, i.e. 6,400 euros, an amount that will be distributed evenly over four years. The cost of materials is excluded from the deduction.

To earn the tax reduction, owners must have paid electronically through a banking system. It should be noted that the expenses they made in the previous year must also be declared on their tax return form in order for the deduction to be calculated as well. especially:

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The costs that owners of homes and other buildings will incur during the period from 1-1-2020 to 31-12-2022 to pay fees for services related to energy, functional and aesthetic upgrade of their properties, will reduce their owners. Income tax for the next four years at 40% of its value.

This means that 40% of the amount of expenses incurred in each of the years 2020, 2021 and 2022 will be distributed evenly over each of the next four years and the estimated income tax on the owner will be reduced in each of these next four years.

– For example, if expenses are incurred in 2020, 40% of them will be distributed evenly over the years 2021, 2022, 2023 and 2024. Expenses, you will reduce the estimated personal income tax of the taxable owner in that year.

– To calculate the discount, only business costs and not material supply costs will be taken into account.

– the conditions for deducting 40% of the costs of energy charges, functional and aesthetic upgrade of buildings from the owner’s income tax for the next four years is that the buildings whose costs have been incurred are not or have already been included will not join the building upgrade program,

– If the deduction is extended until 2023, if someone makes a renewal, the amounts of the tax deduction will be distributed in the years 2023-2026.