What is the VAT Rate Applied to Renovations?

Currently, for building renovation, restoration, and conservative renovation interventions, a reduced VAT rate of 10% is applied.

The reduced VAT applies to the supply of finished goods necessary for the intervention, regardless of whether these are purchased directly by the client or not. The building’s destination does not necessarily have to be residential. Regarding ordinary maintenance interventions (interventions for repair, renewal, and replacement of building finishes) and extraordinary maintenance (interventions to renew and replace structural parts of buildings, or to integrate sanitary services), the 10% reduced VAT applies only if the work is carried out on buildings intended for residential use.

The 10% VAT is applicable to the expense related to the supply of finished goods, raw materials, and semi-finished products only if they are provided by the company carrying out the work and are not included in the ‘significant goods’. This expression refers to goods of significant value, i.e., whose cost exceeds the value of the labor used to install them. In the case of significant goods, the 10% rate applies only to the amount corresponding to the value of the labor.

The significant goods to which the 10% reduced VAT applies are those listed in the decree of December 29, 1999, namely:

• elevators and freight elevators
• external and internal doors and windows
• video intercoms
• boilers
• bathroom fixtures and fittings
• air conditioning and air recycling equipment
• security system.

However, there are cases where caution is needed and distinctions must be made. For the installation of

• shutters or similar shading systems
• security grilles or gratings
• mosquito nets

10% or 22% VAT is applied depending on whether these goods are functionally autonomous or not with respect to the windows. For this reason, they are considered as significant goods together with the windows only if they are structurally integrated with them.

To learn more about tax deductions in the field of renovations, contact us. Our team of specialists will find the best solutions for you, directly managing all tax practices related to property renovation.