Renovation subsidy

How to get a superbonus – Subsidy – Grant to renovate your home in Italy?
non-Italian citizens also eligible

‘RENOVATION IS A WIN-WIN FOR EVERYONE’

This article is only a general introduction, it is not intended to be a guide.
Detailed professional guidance is always recommended with this matter.

Ecobonus: Improving your energy efficiency by at least 2 classes.
Sismabonus: Improving the seismic risk on the building by at least one class.

Why is the super bonus in Italy?

Superbonus: The new tax credit for Italian property improvements

In May 2020 the Italian Government issued urgent legislation to assist with the recovery of the Italian economy, following the unprecedented shock of the covid-19 pandemic.

Among many other measures, legislation called “Relaunch Decree” (Decreto rilancio) introduced new tax credits for improvements to Italian properties. These tax credits, called “Superbonus” are intended to cover 110% of the costs of energy efficiency and structural seismic improvements of Italian properties, help with the recovery of the economy and in the process, ensuring tax compliance in the local building industry.

This tax credit can be set against tax liabilities of the relevant property owner, over five years, in five equal annual instalments. It is of interest also to foreign owners of Italian properties, firstly because it is available for Italian properties` qualifying expenses generally (whatever the country of residence of the owner) and secondly, because it is “transferable” to third parties.

This tax legislation is complex and still evolving. It has been amended by subsequent legislation and its interpretation is progressing with Italian Revenue circulars and regulations. There are still some gaps to be filled and no doubt new issues / gaps will arise in future but is a real opportunity for Italian property owners.

QUALIFYING EXPENSES.
“Superbonus” is granted for strictly defined qualifying building works / expenses.
This legislation refers, separately, to “Leading works” (Interventi trainanti) and “linked secondary works” (Interventi trainati).

Except for seismic structural improvements, you need to carry out at least one qualifying “Leading work” resulting in an improvement of 2 energy performance classes of the rating of the building in question in order to qualify.

Then, any linked secondary works may follow and will be included in the overall tax credit calculation.

In very general terms, leading qualifying works are:

*) Thermal insulation (cladding) of more than 25% of the external surface area of a residential building

*) Replacement of heating / air conditioning equipment of residential buildings and boilers (condensation boilers, heating pumps etc.) plus disposal of the old equipment

*) Seismic structural improvements (Sismabonus) that will increase safety / resistance of buildings to earthquakes.

HOW “SUPERBONUS” WORKS?
Once qualifying works have been carried out, fully or in part (it is possible to claim tax credit for works carried out in stages – “Stati di avanzamento”), following the correct procedure legal entitlement to the tax credit arises for the benefit of the Italian property owner, who will have the following options:

1) “Detrazione”: It will be possible to set the “Superbonus” tax credit against current Italian tax liabilities (Italian income tax – IRPEF), in equal instalments over a period of 5 years, or

2) “Sconto in fattura”: It will be possible to transfer the tax credit to the firm / company / trader that carried out the qualifying works / supplied the equipment and materials, up to the amount of their invoice, in full or partial settlement of the same, or

3) “Cessione del credito”: it will be possible to transfer this “Superbonus” tax credit to banks and financial institutions, against a cash payment and possibly subject to a discount. This “Superbonus” tax credit can then be transferred, further on to other, beneficiaries.

DECEMBER 2020:
The range and extent of Superbonus is substantially increased both by regulations issued by the Italian Revenue (Agenzia delle Entrate) and by the 2021 Budget Law (Legge di Bilancio 2021).

All ordinary tax facilities relating to improvements of buildings (Bonus energetici ordinari) are extended to 31.12.2023.

Superbonus is extended up to 30.06.22. Where the improvements are carried out by “Condomini” and at least 60% of the Superbonus works have been carried out by 30.06.2022, it is now possible to get the Superbonus benefit if works are completed by 31.12.2022.

The 2021 Budget Law extend Superbonus to cover loft insulation, and improvements to group of residential properties (up to 4) registered in the name of the same owner. Sismabonus are extended by up to 50%. Adjustments and modifications to buildings required by disabled owners (Eliminazione delle barriere architettoniche) are also be covered.

This poses as a great opportunity for non-Italian residents to renovate and make houses more efficient from an energy and seismic point of view, with the fiscal aid provided by the Italian Government.

Luxury homes excluded:
You cannot use the Eco Bonus for buildings classed as A1 (Luxury), A8 (Prestigious Villa) or A9 (Castles, etc.). Buildings with these Cadastral Categories are not included in this law.

Three possible solutions to spend the bonus:
1) The safest and most convenient way is to pre-pay the invoices yourself and then get re-imbursed for amount paid. This is the most common method for using the bonus.

The advantages of this method are:
*) No additional out-of-pocket costs for all types of applications, for loans, mortgages, etc.
*) Acting quick and finishing the request without too much bureaucratic administration,
*) Submitting the application quickly and having it approved before the bonus fund is empty, after which it is no longer possible to receive the bonus.
*) Quickly start carrying out the work and being able to quickly inhabit the property,

2) Use the fiscal bonus of 110% of the expenses incurred as a deduction.
However, this option is not valid if you are a non-Italian resident and you do not have to pay income taxes in Italy.

3) Alternatively, it is possible to opt for a contribution as an invoice discount applied directly by the suppliers. The client pays the invoice with a discount (up to 100% of the total amount) and the suppliers “buys” the fiscal credit from its client and then uses it as a deduction.
This is very complicated and there are not many suppliers willing to use this system.

What can we do for you?
It is not straightforward to obtain the bonus on your own, due to the high number of documents and licenses requested and mandated, difficulty of passing the many rules, laws and the communication barriers involved.

Therefore, it is necessary to request the support of an expert to avoid penalties.

We can NOT help you with this and we are not experts in grants, but we can put you in touch with the right people.
Our collaborative office in Arezzo can analyse your specific case and provide you with the best tailor-made solution.

For further details see the official pdf guide issued by the Italian Revenue Agency (in Italian) “Agienzia delle Entrate”.

The information in this brochure and publication and email is compiled with the greatest care, nevertheless no rights may be derived from this information and attachments.