The difficulties encountered by individual who own buildings with mixed purpose – used both for residential and nonresidential purpose – have been solved in the amendments to the Fiscal Code.
Mixed purpose buildings owned by individuals are of two types:
The main condition: the deduction of the utilities
The second case is the one clarified in the draft:
These buildings are considered residential or non-residential according to the the person who deducts the expenses with the utilities, regardless whether in the building it takes place an economic activity or not. So, the buildings are considered:
What does “utilities” mean?
The draft provides that the expenses with the utilities mean: expenses related to building, electricity, gas, heating, water.
It is very important that the draft states that even if an economic activity takes place in the building, but the utilities are not deducted by the legal entity, the tax is for residential buildings.
The clarification is necessary because the text of the Tax Code does not provide it. That is why the local administration bodies require (at this moment, as the amended rules have not yet been published) documents proving that there are not carried out economic activities in order to consider the building residential.
From this point of view, it is also very important that the draft provides that there are no longer required documents if the individual declares on own responsibility that the legal entity does not deduct the expenses with the utilities.
Note: If you deduct the the expenses with the utilities, the building is considered non-residential and you need to have an evaluation report.
How to declare?
The draft provides that for all buildings with mixed purpose, the individual owner is required to complete the statement and to submit it to the directions of local taxes until 31 March (according to the order no. 4087/2069/2015).
These persons fill in the information in section IV (necessary to establish residential tax) and do not fill in the information in Section V – VII (necessary to establish non-residential tax, for buildings where the surfaces can not be separated).
What documents are required?
The draft provides that the statement does not have to be accompanied by the evaluation report, contract of acquisition etc if:
The statement must be accompanied only by the declaration of the owner or the authorized person, as appropriate, which certifies that none of the utilities costs are not recorded in the person who carries out economic activity.
The draft has not been published, yet, and our recommendation is to wait till it enters into force before you make the statement.
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