They promised, but… they took it away: the bonus of 3.2 thousand euros for home renovation is canceled

The Department of National Economy and Finance will withdraw a provision in the tax bill that encourages taxpayers to request receipts and pay electronically for materials and repairs on their properties.

According to the regulation, expenses of up to 16,000 euros will entail a tax deduction of up to 3,200 euros per year and for 5 consecutive years for taxpayers who, from 1 January 2024, begin to repair or renovate their property. According to competent sources, this provision is being considered for amendment and inclusion in the tax bill before it is submitted to Parliament.

The new provision will have the characteristics of the existing one, which provides for a 40% discount on expenses with a maximum (expenditure) limit of 16,000 euros and, according to the same sources, will in any case be better and more profitable than the one that applies today. The resolution will be changed due to the high financial costs and included in the tax bill with amendments.

According to the new rules, which come into force on January 1, 2024, the costs of purchasing goods and obtaining services related to the energy, functional and aesthetic renovation of buildings that are not already included or will not be included in the building modernization program are reduced and distributed equally over 5 years. This means that if someone spends 16,000 euros in 2024 on renovating his house, he will save a total of €16,000 in income tax, spread evenly over five years, from the 2025 tax return to the 2029 tax return.

If someone spends €10,000 in 2024 on renovating their home, the income tax they will have to pay on their 2025 tax return will be €3,000. Thus the bill on the tax return will increase to 1000 euros due to the discount of 2000 euros (10,000/5 = 2,000 euros).

In any case, the “key” that “unlocks” access to the tax bonus is the provision of receipts and invoices for the supply of materials and repair work performed on site and their payment in electronic form. In the decision that will be made after the adoption of the new provision:

1. “Eligible expenses” (“επιλέξιμες δαπάνες”) reduce once a year the tax of an individual who has full ownership of the building in which work related to its energy, functional and aesthetic modernization is carried out.
2. Beneficiaries of tax benefits are also individuals who have the right to unconditional ownership of property, provided that these persons use the property either as a primary or secondary residence, or as a headquarters or branch office for the conduct of their business.
3. In these cases, the beneficiary of the tax bonus is only the person in whose name the corresponding document was issued.

The costs of obtaining services that are recognized are as follows:

A. Energy

• Installation of thermal insulation.
• Replacement of frames, glazing and external protective sheets.
• Install or upgrade a heating/cooling system and the necessary infrastructure and components to ensure full functionality.
• Installation of automatic control devices for the heating/cooling system.
• Installation of a system for self-generation of electricity, as well as an electricity storage system (batteries) in combination with photovoltaic batteries.
• Installation of a hot water production system using renewable energy sources (RES).
• Installation of a mechanical ventilation system.
• Modernization of lighting in common areas of an apartment building.

B. Functional-aesthetic

• Installation/replacement of hydraulics.
• Installation/replacement of electrical installations.
• Roof maintenance/repair.
• Repairing walls, painting inside and outside of buildings.
• Installation of stationary or mobile shading systems (awnings).
• Modernization or installation of an elevator.
• Installation of charging points for electric vehicles.
• Replacement or repair of floors.

The necessary conditions for tax reduction in the aggregate are:

1. Confirmation of the implementation of these expenses by legal documents (invoice or retail item for the provision of services), which must contain the type and cost of the service provided, details (name, tax number), as well as data on the property (ATTACK)unless it is common, for which only a deed of ownership is sufficient.

2. Payment of expenses, regardless of their amount, must be made using electronic means of payment or through a payment service provider (cards, POS, Internet banking, e-wallet, etc.).

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