Good morning. In March 2025, my partner and I signed a preliminary agreement to purchase a newly built apartment. The final deed for the completed property is expected to be signed between September and October 2026.

The building permit issued by the municipality describes the project as “building renovation through demolition and reconstruction with an extension.” A warehouse previously stood on the site, which will be replaced by four apartments. The permit also refers to urban regeneration under Articles 8 and 40-bis of Lombardy Regional Law No. 12/2005.

Based on my research, including the 2026 guide “Building Renovations: Tax Benefits,” it appears that we may qualify for the deduction available when purchasing an already renovated property, as described in section 5 of the guide.

The benefit would reportedly amount to 50% of 25% of the sale price, subject to a maximum eligible expenditure of €96,000. It also appears that the deduction does not apply to the extension and must therefore be calculated only on the volume of the pre-existing building, based on a declaration issued by the project’s technical professional.

Could you please clarify whether we qualify for this tax benefit and, if so, how it would apply?

Thank you, Matteo

Response by Andrea Mifsud, lawyer in Milan

The benefit you refer to is provided for under Article 16-bis, paragraph 3, of Italy’s Consolidated Income Tax Act (TUIR). It grants a deduction for the purchase of property units forming part of buildings that have been fully renovated by construction or property-renovation companies and subsequently sold within the statutory time limits.

In your case, however, the fact that the building permit classifies the work as “building renovation through demolition and reconstruction with an extension” is not, by itself, sufficient to confirm entitlement to the benefit. It is necessary to verify that the project can effectively be classified as building renovation under the applicable legislation.