Condominium Works Deduction: the Year of Payment Counts

In the deduction for works on the common parts, what counts is the year in which the owner actually pays their share, not the year the owners' meeting resolves the works nor the year the supplier issues the invoice. This is the so-called cash basis. It explains why an expense resolved at year end but paid the following year is deducted in the period of payment, and why an owner behind on instalments earns the right only when they settle.

What the cash basis is

Individuals claim the deduction for building works based on the time of payment, not when the cost accrues. For condominium works the relevant payment is the one by which the condominium settles the supplier through a suitable bank transfer, but for the individual the link runs through the instalments paid to the condominium. Established practice therefore looks at the amount the owner actually paid by 31 December of the tax year.

Expenses paid but not yet resolved

It can happen that an owner advances sums before the meeting has formally approved the final statement of the works. In these cases the right to the deduction consolidates when the expense is certain and payments to the supplier have been made according to the rules. A simple advance collected in the condominium account, without the works having been paid to the supplier by a suitable transfer, is not yet a deductible expense for the individual. The manager's certificate must capture the real situation: how much was paid in, how much was paid to the supplier, and for which work.

Instalments straddling two years

The most frequent case concerns instalment plans for extraordinary expenses that extend over several financial years. The practical rule is as follows:

• Shares paid by 31 December count for that tax year
• Shares paid the following year count in the year of payment
• The manager certifies separately the amounts paid in each year
• In each return the owner enters only what they actually paid in that period

This avoids the opposite pair of errors: deducting the whole resolved amount in the first year, or deferring to the final settlement expenses already paid as advances.

The defaulting owner

Those who do not pay their instalments cannot deduct the unpaid part, even if the works have been carried out and the condominium has settled them by advancing the sums. The right accrues, for the arrears share, in the year in which the defaulter settles the debt. This is a delicate point because the condominium may have paid the supplier using the reserve fund or other resources: the individual's tax position remains tied to their actual payment.

Why the manager must keep cash-basis accounts

To certify exact figures the manager must know, owner by owner and year by year, how much was collected and attributed to each work. Accounts that record only the resolved amount are not enough: the link between payment received, instalment and work is needed. This is also consistent with the reporting duties of Article 1130-bis of the Italian Civil Code, which requires clarity on income and expense items.

Keeping payments and certificates under control

Distinguishing the resolved amount from the amount collected, year by year, is the basis for correct certificates. With AmministraPro the manager records instalments, links them to the work and sees at any moment how much each owner has paid in a given period, simplifying year-end certificates. The ledger and allocation features are described on /funzioni and the plans on /prezzi. For doubtful cases it is always advisable to check the tax rules in force.