Complete Guide to the 2022 Green Bonus

The current draft of the 2021 Budget Law contains news that will make many lovers of the plant world happy: the Green Bonus will in fact be extended until December 31, 2024. Private individuals and condominiums throughout Italy will therefore have another three years to take advantage of a measure that has already proven to have many positive consequences for the air in our cities and for the wallets of all the lucky owners of a private garden.

While waiting for the approval of the measure, which should arrive by the end of this year, it remains obviously possible to request the Green Bonus until December 31, 2021. However, there is no reason to be caught unprepared: let's discover together how to request the Green Bonus and how to take advantage of this fantastic opportunity.

What is the Green Bonus?

The Green Bonus (or Garden Bonus), introduced with the 2018 Budget Law and then extended in subsequent years, consists of a 36% Irpef tax deduction on expenses related to the landscaping of green areas of private buildings. The measure therefore applies to extraordinary works carried out on gardens (including rooftop gardens) and terraces of residential properties.

The incentive is managed directly by the Revenue Agency, which will be involved in all the various phases of both requesting the bonus and its disbursement.

How does the Green Bonus work?

As with other bonuses of this type, the 2022 Green Bonus will also require the property owner to pay the full amount of the intervention in advance. Part of this amount (exactly 36%) will be returned to them through an annual Irpef tax credit to be paid.

The deduction will be divided into ten equal annual installments, calculated on a maximum expense of 5,000 euros for each residential property unit. Therefore, the maximum deduction will be 1,800 euros (36% of 5,000) for each property.

It is important to note that, unlike other incentives (such as the 110% Superbonus or the Ecobonus), for the 2022 Green Bonus it will not be possible to opt for the transfer of the accrued credit neither to banks nor to other companies. Likewise, it will not be possible to request an invoice discount from the company carrying out the work or from the supplier. The only way to benefit from the bonus is therefore through the Irpef tax base relief.

Now that we have defined the general guidelines of the Green Bonus, let's look in more detail at how to understand if you are entitled to it and how to request it correctly.

Who is entitled to the 2022 Green Bonus

The Green Bonus incentive can be requested by taxpayers who own or hold (as tenants, usufructuaries, bare owners or beneficiaries of a loan for use) the property on which the interventions have been carried out, and therefore have borne the related expenses.

The Green Bonus can also be requested in relation to the expenses incurred to carry out interventions on the external common areas of condominium buildings. In this case too, the maximum overall amount is 5,000 euros per residential property unit. The individual condominium owner is entitled to the deduction up to their attributable share, provided that it has actually been paid to the condominium within the deadlines for submitting the tax return.

The 2022 Green Bonus can be requested without specific ISEE requirements. The difference therefore is not the applicant's income bracket, but rather the type of intervention to be carried out.

The Revenue Agency specifies that the Green Bonus is only applicable to works of an extraordinary nature, which include an intervention relating to the entire garden or area concerned. It is therefore possible to deduct all works related to the de novo creation of a green area or the radical renovation of a pre-existing garden thanks to the Green Bonus.

It will not, however, be possible to deduct the expenses incurred for the periodic ordinary maintenance of an already existing garden, unless it is connected to an innovative or highly modifying intervention in the terms we have just discussed.

Likewise, it will not be possible to take advantage of the Green Bonus for economy works, that is, carried out directly by the property owners (i.e., in a "do-it-yourself" manner) or in any case without using a specialized company.

Finally, it should be remembered that the Green Bonus is intended for residential property units. This incentive is therefore not provided for properties that have a different use than residential (such as shops or offices).

What expenses are covered by the 2022 Green Bonus

So we come to the fundamental question: what is covered by the Green Bonus? According to the definition given by the Revenue Agency, the Irpef tax deduction applies to expenses incurred for the following interventions:

• Landscaping of open private areas of existing buildings, property units, outbuildings or fences, irrigation systems and the construction of wells.
• Creation of green roofs and rooftop gardens.

It is also possible to request the incentive for design and maintenance expenses, provided they are directly connected to the execution of the interventions mentioned in the previous categories.

The 2021 Green Bonus also includes the redevelopment of lawns, with the exception of those used for sports purposes (if for profit).

How to take advantage of the 2022 Green Bonus

To be able to request the Green Bonus, it is necessary that the payment of the expenses to be deducted takes place through instruments that allow their traceability (such as a bank transfer, which we will discuss in more detail very soon).

It will also be essential that the intervention is certified through the issuance, by the company carrying out the work, of an invoice or a valid tax receipt for the purposes of any audits. Likewise, it will be mandatory to attach a self-certification indicating the total amount of expenses to be deducted, declaring that they are real works and that they comply with the current regulations.

The documentation we have discussed must be included in the tax return. The expenses must be indicated in line E41 of the 730 form for the year in which they were incurred, with the identification codes 12 (for the landscaping of individual homes) or 13 (for the landscaping of condominium common areas). The tax return submitted will be checked by the Revenue Agency, which will verify the documentation to give the green light for the disbursement of the bonus.

Required documentation and traceable bank transfer to obtain the Green Bonus

Let's summarize the procedure. When filling out the tax return for the year in which the interventions were carried out, to obtain the Green Bonus, you will need to present your accountant, tax consultant or authorized CAF with the following documents:

• invoices or receipts with the tax code of the deduction beneficiary, containing a detailed description of the intervention carried out;
• documentation of the payment of the expenses through traceable means;
• self-certification certifying that the expenses have not exceeded the maximum limit of 5,000 euros provided by the Green Bonus.

As we have seen, to obtain the deduction, it will be necessary that the payments are made in a traceable manner. The best means is undoubtedly the so-called traceable bank transfer, which must include:

• the payment reason, in which the invoice references (number and date) must be entered so that the exact document can be traced;
• the tax code of the deduction beneficiary, which may not correspond to the person making the bank transfer;
• the VAT number or tax code of the party in whose favor the bank transfer is made.

The benefits of the Garden Bonus in the fight against smog and climate change

The Green Bonus, as we have seen, is a measure that came into force back in 2018. In these first three years of implementation, it has had extremely positive consequences for the economy: according to the Revenue Agency, thanks to the Green Bonus, approximately 104 million euros were invested in 2019.

The beneficial effects of the Green Bonus however do not stop here. According to Coldiretti, the three-year extension of the bonus is a measure that will allow Italy to show itself at the forefront in the fight against climate change and smog that often makes the air in our cities unbreathable. It is estimated that in the next three years, thanks to the bonus, over 300,000 new trees will be planted. Since one hectare of wooded land is able to absorb approximately 20,000 kilos of carbon dioxide per year, it is easy to understand how this measure is fundamental to improve the quality of life for all of us.