In Brief (TL;DR)
Learn how to combine tax benefits for renovation with a mortgage to maximize savings and enhance your property’s value.
Discover how to pair these benefits with a renovation mortgage to optimize your investment and reduce overall costs.
Find out how to combine tax deductions with a tailored loan to optimize your investment.
The devil is in the details. 👇 Keep reading to discover the critical steps and practical tips to avoid mistakes.
Renovating a home is a desire that blends tradition and innovation, a way to shape living spaces according to one’s needs. In Italy, the heart of Mediterranean culture, this project is intertwined with a complex but advantageous system of tax breaks. Understanding how to combine renovation bonuses with a specific mortgage can turn a large investment into a tangible savings opportunity. This guide offers a comprehensive overview of the available options, analyzing updated regulations and providing practical examples to navigate the current market.
The economic context, influenced by European dynamics, sees a continuous evolution of state incentives. After the Superbonus era, 2025 opens with a restructured but still significant framework of benefits. The goal is to support citizens in improving their real estate assets, with a special focus on energy efficiency and seismic safety. Tackling a renovation requires careful planning, not only from a technical but also a financial standpoint. Knowing the available tools is the first step to realizing your dream without encountering difficulties.
Overview of 2025 Building Bonuses
2025 marks a change from previous years, with a recalibration of rates and spending caps for building bonuses. The main incentive for renovations, starting January 1, 2025, provides a 36% tax deduction on a maximum expenditure of €48,000 per property unit. However, the 2025 Budget Law has introduced an important distinction: for work carried out on a primary residence, the deduction is increased to 50%. This increase applies to expenses incurred during 2025, provided the property is used as a primary home at the end of the work and the taxpayer is the owner or holder of a real right of enjoyment.
For subsequent years, a further adjustment is planned: in 2026 and 2027, the deduction will drop to 30%, with an increased rate of 36% still for the primary residence. Other specific incentives also remain accessible, such as the Ecobonus for energy efficiency, the Sismabonus for seismic safety upgrades, and the Bonus Mobili (Furniture Bonus), which allows a 50% deduction for the purchase of furniture and appliances linked to a renovation project. It is crucial to note that, following recent regulatory changes, the options for credit transfer and invoice discounts have been severely limited.
The Renovation Market in Italy
The renovation sector in Italy is experiencing a stabilization phase after the intense activity stimulated by the tax bonuses of past years. Market analyses indicate a downturn in 2024, but the sector maintains a solid foundation. Projections for 2025 show a complex dynamic, with a contraction in residential recovery partially offset by growth in the non-residential sector and public works. Despite the reduction of more generous incentives like the Superbonus, interest in improving real estate assets remains high, driven by the need for energy upgrades and the desire to personalize spaces.
In this scenario, the average cost of a renovation for a home of about 100 square meters is between €60,000 and €85,000. The choice to use financing therefore becomes crucial for many families. Combining a renovation mortgage with available tax deductions is an effective strategy to make the investment more sustainable. Banks offer specific products, such as a purchase and renovation mortgage, which consolidate the necessary funds for both purposes into a single loan.
Combining a Mortgage and Tax Deductions: A Double Advantage
One of the most effective strategies to maximize savings is to stack the various available benefits. It is, in fact, possible to benefit simultaneously from both the tax deductions for renovation work and the 19% deduction on the interest paid on the mortgage taken out to finance that work. This double advantage makes the operation particularly attractive from a financial point of view. The deduction on renovation mortgage interest is applicable on a maximum amount of €2,582.28 per year and is reserved for work on the primary residence.
To access this benefit, specific time conditions must be met: the mortgage contract must be signed within the six months prior to the start of the work or within the eighteen months following. Furthermore, the property must be designated as the primary residence within six months of the work’s completion. Documentation plays a key role: it is essential to keep the mortgage contract, work invoices, and interest payment receipts to present them during tax filing. Dealing with bureaucracy may seem complex, but proper planning allows you to take full advantage of the opportunities offered.
The Purchase and Renovation Mortgage
A financial solution that is becoming increasingly popular is the purchase and renovation mortgage, a product that allows you to obtain a single loan to cover both the cost of the property and the expenses for modernization work. This tool offers significant advantages in terms of bureaucratic simplification and cost savings. It avoids having to manage two separate applications, with a single review process, a single notarial deed, and consequently, reduced notary and appraisal fees. The bank disburses the amount in several installments: the first at the time of the closing for the purchase, and the subsequent ones based on the Work Progress Report (Stato Avanzamento Lavori – SAL), following verification by an appraiser.
The bank’s evaluation for this type of mortgage is more complex, as it must consider not only the current value of the property but also its estimated future value after the renovation. Generally, credit institutions finance up to 80% of the property’s post-work value. This option is particularly suitable for those buying a house to be renovated, combining the tradition of an existing property with the innovation of a custom project. A careful reading of the contractual conditions, such as those related to the European Standardised Information Sheet (ESIS), is essential for making an informed choice.
Practical Examples and Storytelling
Let’s imagine the story of Marco and Giulia, a young couple who decide to buy a farmhouse in the countryside, a building rich in history but in need of major modernization. The cost of the property is €150,000, while the quote for the renovation, which includes redoing the systems and improving energy efficiency, amounts to €70,000. Instead of applying for two separate loans, they opt for a purchase plus renovation mortgage. The bank, after evaluating the project and the future value of the property (estimated at €250,000), approves a loan of €176,000 (80% of the purchase and renovation value).
Thanks to this choice, Marco and Giulia not only simplify their financial management but can also maximize tax benefits. On the renovation expenses (€70,000), they can take advantage of the Renovation Bonus, deducting 50% of the amount over ten years. At the same time, they can deduct 19% of the interest paid on the mortgage, up to the maximum limit provided by law, as it is their primary residence. This combination of tools transforms a major financial commitment into a smart investment that increases the property’s value and improves quality of life, blending the charm of tradition with the comforts of innovation.
Procedures and Required Documentation
To access tax benefits and renovation mortgages, it is essential to follow a precise bureaucratic process and gather all the required documentation. For building bonuses, payments must be made via a ‘bonifico parlante’ (speaking bank transfer), a bank or postal transfer that must contain specific information: the reason for payment with the legal reference, the tax code of the deduction beneficiary, and the VAT number or tax code of the party receiving the payment. It is also necessary to keep all invoices for expenses incurred and the administrative permits required for the type of construction work.
As for the mortgage application, the documentation to be submitted to the bank includes the applicants’ personal and income documents, a detailed cost estimate for the renovation work, and property-related documents, such as the deed of origin and the floor plan. In the case of a purchase plus renovation mortgage, the preliminary purchase agreement is also required. The bank will initiate an underwriting process to assess the feasibility of the loan and a technical appraisal to estimate the property’s value. Orderly management of these documents is crucial to avoid delays and ensure the success of the entire operation, an important step toward realizing your home project.
Conclusions
Renovating and financing your home in the Italian context of 2025 requires careful navigation through evolving regulations and financial opportunities. Although the landscape of building bonuses has been scaled back compared to the past, incentives for renovations, particularly for primary residences, remain a fundamental pillar to support citizens’ investments. The ability to combine these deductions with the tax benefits from a specific mortgage represents a strategic lever for optimizing financial resources. Solutions like the purchase and renovation mortgage emerge as effective tools, capable of simplifying procedures and reducing overall costs.
The key to success lies in meticulous planning, which starts with informed research and culminates in impeccable document management. Thoroughly understanding the conditions, requirements, and deadlines is essential to turn your home renovation project into a sustainable reality. In a market that balances tradition with a drive for innovation, enhancing your real estate assets is not just an aesthetic or functional choice, but a conscious investment in your own future and that of the living environment you inhabit.
Frequently Asked Questions
Yes, it is absolutely possible. You can apply for a renovation mortgage and, at the same time, take advantage of the tax deductions provided by building bonuses. In fact, banks often offer specific financing solutions, such as the purchase plus renovation mortgage, which combines the funds to buy a home and those for the work into a single product. This allows you to manage everything with a single payment and simplify the procedures.
For 2025, the main incentives include the Renovation Bonus, which provides a 36% deduction on a maximum expenditure of €48,000 (the percentage increases to 50% on an expenditure of €96,000 for a primary residence). The Ecobonus for energy efficiency, with variable rates, and the Sismabonus for anti-seismic work also remain active. It is always advisable to check the most recent regulations, as conditions can change.
If you take out a mortgage to renovate your primary residence, you can deduct 19% of the interest and ancillary charges from your IRPEF (personal income tax). The maximum amount on which the deduction can be calculated is €2,582.28. This benefit can be combined with building bonuses, so you can deduct both the work expenses and the mortgage interest.
Credit transfer and invoice discount were mechanisms that allowed the tax deduction to be converted into immediate cash by transferring it to the bank or the company performing the work. However, as of February 2023, these options have been blocked for most new building projects, with specific exceptions. Today, the main way to take advantage of the bonuses is through tax deduction on your tax return, spread over several years.
For the mortgage, the bank generally requires personal documents (ID card, tax code), income documents (pay stub, income statement, tax return), and property documents. In addition, specific documents for the renovation are needed: the company’s cost estimate, the work project, and municipal permits (such as CILA or SCIA). To benefit from tax bonuses, it is essential to keep all invoices and payment receipts, which must be traceable (e.g., ‘bonifico parlante’ or speaking bank transfer).
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