Keeping Separate Accounting for a Condominium Works Site

Why separate the works accounting

The condominium's ordinary management follows the annual financial year and covers utilities, cleaning, recurring maintenance, and the manager's fee. An extraordinary site instead has its own life cycle, which may span several financial years, and is financed by a special fund earmarked for that specific project under Article 1135.

Mixing the two makes the report hard to read and opens the door to disputes: an owner is entitled to understand clearly how much the project cost and how it was financed. Separate accounting meets this need for transparency and reflects the earmarked nature of the fund.

The separation is not only accounting-based: the fund's money must still flow through the dedicated condominium bank account required by Article 1129, but it must be identified as relating to the site, so that collection and payments can be reconstructed at any time.

Opening a ledger dedicated to the site

The first step is to create, within the chart of accounts, a management line or ledger dedicated to the project. It gathers all related items: owners' fund payments, the advance and progress payments to the contractor, the works supervisor's and technician's fees, charges for permits and certifications, and any accessory costs.

Every entry should be recorded with a reference to the relevant site, so that the ledger totals match, at any moment, the difference between the fund collected and the expenses incurred. If the condominium has several sites open at the same time, each must have its own distinct ledger, to prevent one project's resources from covering another's costs.

• Inflows: owners' payments into the special fund
• Outflows: advance, progress stages, and balance to the contractor
• Accessory outflows: works supervision, technicians, permits, certifications
• Ledger balance: fund collected minus expenses paid

Recording invoices and payments traceably

Each invoice from the contractor and the professionals must be recorded in the site ledger and linked to its payment. It is good practice to keep, together with the invoice, the progress stage that justifies it, so you can show that every outlay corresponds to a share of work actually done.

Payments to the contractor for works giving the right to a deduction must be made by dedicated bank transfer, on which the bank applies the withholding tax provided by Article 25 of Decree-Law 78 of 2010. The separate accounting must record both the gross amount and the withholding, for correct tax handling and for the later certificates to owners.

Linking the accounting to the tax deduction

Many extraordinary works give the right to tax deductions that owners use in their tax returns. The site's separate accounting is the source from which the manager derives the certificates of deductible expenses per share: for each owner it must be possible to state the expense attributable to them and the actual payment made in the year.

Keeping the site management distinct hugely simplifies this task. At year-end, or at the end of the works, the data for the certificates is already ordered by owner and by payment date, without having to reconstruct afterwards which ordinary-year entries belonged to the extraordinary project.

Closing the site and reporting on it

At the end of the works, separate accounting lets you produce a specific report on the project: total fund resolved, amounts actually collected, payments made, withholdings, and any surplus or additional contribution needed. This statement is what the meeting approves and on which owners exercise their oversight.

Management software that allows you to open separate accounts makes the whole cycle linear, from the fund to the final report. With AmministraPro you can keep the site as a standalone item, link invoices, payments, and withholdings, and generate the separate works report; the features are described on the /funzioni page and the plans with their costs on the /prezzi page.

Frequently asked questions