Why You Should Consider Renovating Your Home Before the End of 2024

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Why Renovate Your Home Before the End of 2024?

The urgency to renovate your home before the end of 2024 can be traced back to significant changes introduced in the 2025 Budget Law.
This legislation intends to adjust how tax deductions are calculated, particularly impacting homeowners planning renovations.
Importantly, the new rule is not retroactive, meaning that any deductible expenses incurred before December 31, 2024, will still benefit from the previous tax deduction standards.

As affirmed by Minister Giancarlo Giorgetti, while taxes will not increase this year, adjustments to tax deductions are being implemented to streamline revenue collection.
Notably, these modifications will likely impose caps on the deductible expenses available, potentially linked to the taxpayer’s income and family quotient.

Changes to Tax Deductions

Currently, taxpayers earning up to €120,000 can claim deductions without caps, aside from their tax capacity limits.
For instance, if a taxpayer owes €20,000 in income tax (Irpef), they may claim up to €20,000 in deductions on eligible spending.

Starting in 2025, however, a maximum limit will apply to deductible expenses based on specific income thresholds: those earning up to €75,000 may claim the same deductions as today, while those with incomes above this level will face reduced deduction limits.
For individuals earning between €75,000 and €100,000, the base deduction will drop to €14,000, and decrease further to €8,000 for those earning above €100,000.

Impact on Taxpayers

Taxpayers will need to navigate a new calculation method for their potential deductions, which factors in the number of dependents.
Deductions will be adjusted as follows:

• 0.50 for families without dependents
• 0.70 for families with one dependent
• 0.85 for families with two dependents
• 1.00 for families with more than two dependents or at least one disabled dependent.

This reform indicates a considerable reduction in available deductions for many taxpayers compared to the current system.

The Advantages of Early Renovation

Renovation expenses incurred before January 1, 2025, will not be subject to the new limits, allowing homeowners to benefit from a 50% tax deduction on their total renovation costs.
Furthermore, these deductions can be spread over ten years without impacting future deduction limits.

By completing renovations before the end of 2024, homeowners can secure full benefits, even if their expenses exceed the future limits set by income thresholds.
This is particularly crucial for individuals earning over €75,000, as they may otherwise lose access to full deductions from 2025 onwards.

In conclusion, for those planning significant renovations, acting before the end of 2024 can result in substantial financial benefits, safeguarding against potential future limitations on tax deductions.

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