Renovating an Italian House in 2027? The Tax Relief Drops on 1 January Unless Rome Extends It

By Patrick · 2026-10-22

If you buy an Italian house this winter and renovate it next year, the tax relief you are counting on may be smaller than the number in most guides. The rates for the bonus ristrutturazioni (renovation tax deduction) step down on 1 January 2027, and a work programme that starts after the notary appointment will almost certainly be paid for in the new year.

This guide sets out the rates as the law stands on 22 October 2026, what the drop costs on a typical project, who can actually use the deduction, and why the 2027 Budget Law is worth watching.

The rates: what changes on 1 January 2027

Since 2025 the three main home-improvement incentives (the bonus ristrutturazioni, the Ecobonus for energy upgrades and the Sismabonus for earthquake-proofing) share one pair of percentages. Italian law (Legge 207/2024, extended by Legge 199/2025) sets them as follows:

• Expenses in 2025 and 2026: 50% if the house is your abitazione principale (registered main residence), 36% for any other home.
• Expenses from 1 January 2027: 36% for a main residence, 30% for any other home.

The eligible spend for the bonus ristrutturazioni and the Sismabonus is capped at €96,000 per property unit. The Ecobonus works differently: it has its own maximum deduction for each type of intervention. The deduction is not paid out at once. You claim it in ten equal yearly instalments against your Italian income tax (IRPEF).

Two older features are gone. The Superbonus ended for almost all new works on 31 December 2025, and for an ordinary private renovation the deduction can no longer be turned into a discount from the builder or a credit you sell. The deduction is the only route left.

What the drop costs on a full-cap project

Take the full €96,000 of eligible work on one unit. The arithmetic is straightforward:

• Holiday or investment home, paid in 2026: 36% of €96,000 is €34,560, or €3,456 a year for ten years.
• The same home, paid in 2027: 30% of €96,000 is €28,800, or €2,880 a year. That is €5,760 less relief over the decade.
• A main residence: 50% of €96,000 is €48,000 in 2026, against €34,560 in 2027. The gap is €13,440.

Most of our readers are buying a second home, so the middle line is the one that matters. On a smaller project the gap shrinks in proportion, but moving from 36% to 30% still removes about a sixth of the relief.

Which year counts? Plan on when you pay the builder

For private individuals, the deduction generally follows the date a payment is made (the criterio di cassa, or cash basis), not the date of the contract or the date of the quote. Payments for these works go through a special bonifico (bank transfer) that cites the tax rule, your tax code and the builder's VAT number. The bank withholds an advance tax from the amount the builder receives; it does not add to your cost.

That matters because a purchase timeline is long. If you sign a compromesso (preliminary contract) in November, complete at the rogito (deed of sale) in January and start work in the spring, every invoice falls in 2027. Even a buyer who completes before Christmas rarely has the builder's deposit paid and the work done by 31 December. Ask your commercialista (Italian accountant) to confirm the payment-date rule for your own case before you rely on it.

Can a non-resident actually use the deduction?

This is the point that surprises international buyers most. The bonus is a deduction from your IRPEF liability, spread over ten years. It is not a grant and not a refund. If you pay little or no Italian income tax, because your income is earned abroad and you are not tax resident in Italy, there may be nothing for the deduction to reduce.

The higher main-residence rate adds conditions. You need to own the house or hold another real right in it, such as usufruct, and it must be your main residence, the home where you or your family habitually live, at the latest when the works end. A holiday home does not qualify. That is why the Trovara report shows the renovation incentive both ways: for a second home and for a main home.

Check before you budget: ask a commercialista whether you will have Italian taxable income over the next ten years, from rent, a pension or a business, large enough to absorb about €2,880 a year. If not, treat the relief as zero and the renovation as a full-price cost.

The wild card: the 2027 Budget Law

Italy has extended these rates at the last minute before. As of 22 October 2026 the government had approved its budget plan for 2027 (on 13 October), but not yet the budget bill itself, and no new rates for these bonuses had been announced. Deputy Economy Minister Maurizio Leo said at the end of September that the 50% and 36% rates could be kept for another year if the money can be found; that is an intention, not a law. Under current law, according to the Agenzia delle Entrate, the rate from 2028 to 2033 is 30% for every home, on up to €48,000 of spend.

The sensible way to plan is to work out the project at 30% (or 36% for a main residence), and treat any extension as an upside. If the final budget text keeps the 2026 rates, your numbers only improve. If you assumed 36% and Rome does nothing, the shortfall comes out of your budget.

A practical checklist for a winter purchase

• Get the works priced early. A geometra (surveyor) can give you a scope and a quote before the rogito, so you know the real spend against the €96,000 cap.
• Decide whether paying some invoices before 31 December makes sense. Only if the works have genuinely started, you own the property or hold the right to do them, and your commercialista agrees. Do not rush a payment just to capture a rate.
• Use the correct payment method. Pay through the special bonifico and keep every invoice. A card payment or cash can cost you the deduction.
• Check planning status first. The deduction assumes the building is lawfully built. A renovation of an unregistered extension can make the relief unavailable, which is why conformità urbanistica (planning compliance) comes first.
• Budget the rest of the costs too. Taxes, notary and agency fees come before a single tile is laid.

Where Trovara fits

The Trovara Individual Property Report (€109) estimates renovation cost for the specific house you are looking at, shows the incentive at the second-home and the main-home rate, and flags the planning and cadastral issues that decide whether a renovation can go ahead. Paste a listing link to see what it covers. It is a planning tool, not tax advice, so your commercialista still has the final word on the deduction.

Photo credits

Cover: “Colorful Coastal Village Overlooking Ocean” by Gotta Be Worth It, via Pexels (Pexels licence).

Prepared with AI assistance and reviewed by the Trovara team. This article is general information, not tax or legal advice. Rates and rules were checked on 22 October 2026 and may change with the 2027 Budget Law. Always verify with a notaio or commercialista before making a decision.