Renovation tax breaks in Italy for non-residents: the 2027 sums

A non-resident who renovates a second home in Trieste in 2027 may, under the law as it stands, deduct 30% of the cost, in ten yearly slices, from Italian income tax. The catch is in those last three words: if you pay no Italian income tax, the deduction is worth nothing.

The "50% back from the taxman" of expatriate forums was the rate for every home until 2024 and is the main-home rate for 2025 and 2026. What reaches every owner, resident or not, is the 10% VAT rate on the works.

In short

• 2027 rates under today's law: 36% for a main home, 30% for any other, on up to €96,000 per home, in ten equal annual instalments (new income tax act, articles 17 and 373).
• Non-residents qualify, but only against Italian personal income tax (IRPEF), and only down to zero: the part of a year's instalment that finds no tax is lost, not refunded.
• A Trieste holiday home usually produces no IRPEF: unlet, the regional property tax (ILIA) takes its place; let under the 21% flat tax (cedolare secca), no deduction can reduce it.
• The VAT rate is for everyone: 10% instead of 22% on maintenance and renovation in residential buildings, whoever owns them.

What does the law allow for works paid in 2027?

The rate depends on the year you pay, not the year the works began. From 1 January 2027 the old income tax code gives way to a consolidated text, legislative decree 117 of 2026. Article 16-bis becomes article 17; the temporary rates, until now in a 2013 decree, become article 373. The figures do not change.

Year you pay	Main home	Any other home	Ceiling per home
2025–2026	50%	36%	€96,000
2027	36%	30%	€96,000
2028–2033	30%	30%	€48,000
From 2034	36%	36%	€48,000

The higher rate needs two things, in the reading of the Agenzia delle Entrate: you own the home, or hold a real right over it such as usufruct, when the works start, and it is your main home, where you or your family usually live. A flat you visit from Munich or Manchester is "any other home".

On 28 October 2026 the Council of Ministers approved the 2027 budget bill. Its press release says that for 2027 the renovation deductions "are confirmed", and quotes no rates. Until Parliament passes a text that says otherwise, plan on the table above.

Can a non-resident claim it at all?

Yes. The new act lists the renovation deduction among those a non-resident may set against Italian tax (article 26), and the Agenzia's instructions open it to residents and non-residents alike. Each instalment is claimed in your Italian return, the Modello Redditi.

The limit is arithmetic. Deductions reduce gross IRPEF "up to its amount" (article 11). The Agenzia adds that a year's instalment that does not fit can be neither carried forward nor refunded.

The useful question, then, is how much IRPEF you will owe in Italy in each of the next ten years.

Why does a Trieste second home often leave nothing to deduct from?

Because of the way the home itself is taxed.

• Unlet. Nationally, the property tax IMU replaces IRPEF on homes that are not let (legislative decree 23 of 2011, article 8). In Friuli Venezia Giulia the regional ILIA replaces IMU, and the Agenzia's instructions give it the same effect. With no other Italian income, there is no IRPEF. The ILIA figures are in owning property in Trieste year after year.
• Let under the flat tax. The cedolare secca replaces IRPEF and its surcharges on the rent (article 203 of the new act). The Agenzia is explicit: deductions cannot be used against it.
• Let under ordinary IRPEF. Here the deduction bites. The taxable figure is the rent less a flat 5%, where that exceeds the cadastral income (article 39), taxed at 23% up to €28,000 (article 11).

Contracts and flat-tax rates are covered in renting out your Italian home.

A worked example

Example. Assumptions: you live in Germany, have no other Italian income and own a flat in Trieste that you do not live in. In 2027 you fit a new bathroom and replace the windows with a different type: extraordinary maintenance (manutenzione straordinaria). The builder invoices €50,000 net, of which €15,000 for windows and bathroom fittings. VAT at 10% is €5,000; you pay €55,000 by the required bank transfer.

• The deduction. VAT counts as part of the deductible cost. 30% of €55,000 is €16,500, or €1,650 a year from 2027 to 2036.
• The VAT. Windows and fittings (€15,000) are "valuable goods" (see below), but worth less than the rest of the job (€35,000), so the whole invoice takes 10%. At 22% it would carry €11,000 of VAT: €6,000 saved, once, at the start.

Three owners, same flat.

	Income tax on the flat each year	Deduction used each year	Over ten years	VAT saved
A. Kept for your own visits	€0 (ILIA instead of IRPEF)	€0	€0	€6,000
B. Let at €12,000, flat tax 21%	€2,520	€0	€0	€6,000
C. Let at €12,000, ordinary IRPEF	€2,622 before the deduction	€1,650	€16,500	€6,000

Owner C's sums: €12,000 less 5% is €11,400; at 23%, €2,622; less €1,650, €972 of IRPEF. Owner B pays €2,520. On these figures the ordinary route costs €1,548 a year less, before the regional and municipal surcharges and the registration and stamp duties on the lease, which the flat tax covers and the ordinary route adds.

The deduction is used in full only while 23% of 95% of the rent covers the instalment: here, from a rent of about €7,550 a year. Below that, part of each slice is lost.

The release does not say at what rate 2027 is "confirmed". If 2027 kept the 36% of 2026, the instalment would be €1,980 and owner C would pay €642 of IRPEF.

Rents, costs and the split of the invoice are assumptions; the rates and rules are those in force on 31 October 2026.

What do you get whatever your tax position?

The VAT rate. It depends on the work and the building, not on the owner.

• Ordinary or extraordinary maintenance in buildings that are mainly residential: 10% on the builder's work (until 31 December 2026 under law 488 of 1999, article 7; from 2027 under table A of the new VAT act, legislative decree 10 of 2026).
• Valuable goods: windows and doors, boilers, sanitaryware and taps, lifts, air conditioning, video entry phones, security systems. They take 10% only up to the value of the rest of the job; the excess pays 22%. A €20,000 job with €12,000 of windows: €16,000 at 10%, €4,000 at 22%.
• Not at 10% on maintenance jobs: materials you buy yourself, and the fees of architects and surveyors.
• Restoration and full renovation: 10% on finished goods too, even bought by you.

One asymmetry. Repainting and new floors are ordinary maintenance: inside your own flat they get the 10% VAT but no income tax deduction, which covers ordinary maintenance only on a building's common parts.

Does the Region offer anything instead?

Not while you live abroad. The first-home grants of Friuli Venezia Giulia ask for registered residence in the region for at least five of the past eight years, then five years living in the home.

The regional grant for energy works (windows, insulation of walls or roof) pays up to 50% of the eligible cost, capped at €12,000 per type of work. You apply once the works are finished and paid, and you must be resident in the region on the day you apply. It can be combined with the national deductions. Applications not funded by 31 December 2027 are archived.

Can I sell the deduction or take it off the invoice?

No. Those options let the builder or a bank take over the tax credit for a discount or cash; since 17 February 2023 both are closed to new works (decree-law 11 of 2023, article 2).

The furniture bonus (50% on up to €5,000) covers, under today's law, purchases made by 31 December 2026, and it too comes off IRPEF. The energy-saving and anti-seismic deductions follow the same 2027 rates, 36% and 30%.

What to do now

• Before signing, work out whether you will owe Italian IRPEF in each of the next ten years: rent, an Italian pension, Italian work.
• If you let, ask your commercialista to compare the flat tax with ordinary IRPEF over the whole ten years, surcharges included.
• Ask the builder to invoice at 10% and to state the value of the valuable goods, as the law requires.
• Pay by the dedicated bank transfer (bonifico parlante), quoting the reason for payment, your codice fiscale and the builder's VAT number. Banks and Poste Italiane withhold 11% on account of the builder's income tax.
• Watch the budget law over the winter: the 2027 rate is not settled.

Frequently asked questions

Can non-residents claim renovation tax deductions in Italy?

Yes, against IRPEF they actually owe in Italy, and only up to that amount. A non-resident whose only Italian asset is an unlet home usually owes none, so the deduction goes unused.

Is the 50% renovation bonus still available in 2027?

Not under the law in force on 31 October 2026: 36% for a main home, 30% for others. The 2027 budget bill "confirms" the deductions without, so far, an official rate.

What happens to unused instalments if I sell the house?

They pass to the buyer, if a private individual, unless the deed says otherwise (article 17). A seller with Italian income may prefer to keep them; a buyer without any may not mind.

What if I move to Trieste before the works end?

The Agenzia grants the main-home rate if the home becomes your main home by the end of the works, provided you owned it, or held a real right over it, when they began. Residence in the region also opens its energy grant.

Where this guide stops

It leaves out how your home country treats Italian income and tax, the cap on deductions above €75,000 of income, condominium works, companies and permits: questions for your commercialista and architect. The 2027 rate will be known when the budget law is published.

Owners of a Trieste home for whom these sums do not add up may find selling the cleaner answer; buyers from abroad are our daily work: request a confidential valuation. Going ahead? The Metroarea studio designs and runs the works with us, remotely if need be: see Renovate.

This guide informs; it is not tax advice, and your commercialista has the final say on your return. For your case, write to richieste@triestevillas.com or WhatsApp +39 331 8940822.