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FINANCE

The building bonuses you could claim in Italy in 2021

The Italian government is stumping up state funds for renovating and improving the safety of property. Here's an overview of what you need to know about accessing the main bonuses currently up for grabs.

The building bonuses you could claim in Italy in 2021
From renovations to furniture, you could claim Italy's house bonuses this year. Photo: Alicia Steels/Unsplash

Homeowners in Italy can benefit from a variety of building bonuses on offer, which have been extended throughout 2021.

There’s even more financial aid you could get your hands on in addition to the widely reported Superbonus scheme, which offers a tax rebate on up to 110 percent of the expenses incurred for certain property restorations.

The Decreto Rilancio (Relaunch Decree), introduced in 2020 in response to the Covid-19 emergency, saw an increase to the state kitty for both the so-called ‘Ecobonus’ and the ‘Sismabonus’ restoration bonuses.

Since almost three-quarters of Italy’s homes are over 50 years’ old, according to the Agenzia delle Entrate (Italian Revenue Agency), there’s an enduring demand for reinvigorating many neglected properties.

But there’s more you could be eligible to claim this year, in conjunction with the above two schemes.

Further to the financial package available for making energy upgrades and reducing seismic risk, there is also a government pot for furniture, refreshing gardens and optimising water consumption.

READ ALSO: Which areas of Italy have the highest risk of earthquakes?

Can anyone with a property in Italy claim these bonuses?

Unlike the ‘Ecobonus’ and the ‘Sismabonus’, most of these bonuses are for people who pay taxes in Italy, as they are mainly tax-deductible schemes.

Therefore, you can offset the taxes on your income if you decide to dip into these government property pots. They’re not all tax deductible, though, and some bonuses are available to residents in Italy and non-residents alike.

Here’s a breakdown of the other major building bonuses, aside from the Superbonus scheme, that you might qualify for.

Note: These are complex and subject to change, so it’s important to get professional advice before buying and renovating.

READ ALSO: How to stay out of trouble when renovating your Italian property

There are different government bonuses you could claim to renovate property. Photo: Henry & Co/Unsplash

The Renovation Bonus

The Bonus Ristrutturazioni was included in the government’s Legge di Bilancio 2021 (Budget Law 2021) once again. Continuing throughout 2021, you can apply for a 50 percent tax reduction on carrying out renovation work in both individual properties and condominiums.

You must be paying Italian income tax, known as ‘IRPEF’, to access this bonus.

There’s a maximum limit on expenses of €96,000 and the 50 percent offset to taxes is divided into annual instalments for 10 years. So that means you can deduct €48,000 over 10 years with this scheme.

There is a raft of allowances for accessing this bonus. These include making repairs on property that has been damaged, building garages or parking spaces, increasing security of the property such as installing gates, security doors and CCTV, removing asbestos and gas detection equipment.

READ ALSO: House prices in Italy rise at fastest rate in a decade

This scheme is available to taxpayers in Italy, including both residents and non-residents. Not only can the owner of the property claim the 50 percent tax deduction, but also tenants, members of cooperatives and people who make an income from partnerships and family businesses.

Condominiums can also take advantage of the bonus for work in common areas.

In a move to increase transparency of tax trails, the government included payment instructions in the Budget Law. Paying for renovation services must be recorded either through bank or postal transfers.

More details on this bonus can be found here.

You could access government funds to spruce up your garden. Photo: Elija Hail/Unsplash

The Green Bonus

The Bonus Verde was also extended in the government’s Budget Law and is available until the end of the year.

You could get state help for landscaping your garden or private outdoor areas of existing property, supplying plants and shrubs, doing work on fences, irrigation systems, building wells, roofs or roof gardens.

There’s a 36 percent tax deduction available for jobs relating to gardens, terraces and green areas in general. Like the renovation bonus, you must be a taxpayer to benefit from this one.

The tax relief applied in the tax return must be divided into 10 annual instalments of equal amounts and must not exceed a maximum expenditure equal to €5,000 for each property.

In other words, the maximum deduction you can claim comes to €1,800, as that’s 36 percent of €5,000.

READ ALSO: How and where to find your dream renovation property in Italy

The bonus can’t be used for shops or offices, but if a residential property is also used for work, you can claim half of the total tax relief available.

People living in condominiums are also eligible to apply for work carried out in communal areas.

You can’t get a cash boost for general upkeep of gardens, though. Excluded from the expenses are routine maintenance, buying gardening tools and any work that isn’t innovative – that means you have to transform a green area rather than just keep it well pruned.

Second-home owners can also claim for this one, as the bonus is available per property, not per homeowner.

More details on the Green Bonus can be found here.

READ ALSO: Italy’s building bonus: Can you really claim back the cost of renovating property?

The Furniture and Appliances Bonus

Believe it or not, there’s even some state aid on hand for buying household appliances – the Bonus Mobili e Elettrodomestici. You could claim a 50 percent tax deduction on expenses of up to a maximum €16,000, as detailed in the Italian Revenue Agency’s updated guide.

The Budget Law 2021 boosted the funds from last year’s €10,000 limit. This scheme applies to household goods of at least A+ class (A for ovens), intended to furnish a property undergoing renovation.

That means this bonus is linked to the Renovation Bonus. To be sure you can access this one, the renovation work must have begun before buying any furniture or appliances – but expenses on restoring the property don’t need to actually be paid beforehand.

Some items covered by the bonus are the following:

  • Ovens
  • Refrigerators
  • Dishwashers
  • Electric hobs
  • Washer-dryers
  • Washing machines

You qualify for this if the items you buy are for a residential property and, like the previous two bonuses mentioned, the deductions must be spread across 10 annual instalments. You must make any purchases by December 31st, 2021 to qualify for the ceiling limit of €16,000 in expenses.

READ ALSO: How will Italy’s property market change in 2021?

The Facades Bonus

Another bonus extended in this year’s Budget Law is the Bonus Facciate. This scheme allows you to deduct 90 percent of the amount incurred for renovating the exterior facades of buildings, with no maximum spending limits.

Everyone can benefit from this bonus. Again, those paying income tax can access it, as well as those holding a partita IVA (VAT number) and even tenants of rented properties. Both Italian residents and non-residents are eligible.

The Facades Bonus is available throughout 2021 and covers a vast amount of work, including restoring external surfaces of existing buildings, balconies and friezes.

You can deduct 90 percent of expenses from gross tax of either personal income tax, ‘IRPEF’ or corporate tax, known as Imposta sul Reddito Sulle Società (IRES).

You can find out more about this bonus here.

The Water Bonus aims to increase water efficiency. Photo: Jos Speetjens/Unsplash

The Water Bonus

The Bonus Idrico was also extended in the Budget Law and provides for a 50 percent discount on €1,000 of works for individuals resident in Italy and up to €5,000 for businesses.

To claim from this national purse, you’ll need to buy water-saving goods, such as toilets, showers, taps and sinks that are water efficient. It’s a bid by the government to promote lower water consumption.

The money is for the supply and installation of ceramic sanitary toilets and related drainage systems, including plumbing and masonry work and the dismantling of pre-existing systems.

How to access the bonus is yet to be defined by a decree of the Minister of the Environment and Protection of Land and Sea. For the latest on this bonus, keep an eye on this site.

READ ALSO:

Next Steps

To check whether you are eligible, speak to a professional and keep checking the Agenzia delle Entrate website before you begin any work on property.

If you’re keen to buy, you may also want to take a look at our guide to the additional costs you might not be expecting, and read up on some of the common mistakes to avoid when buying a house in Italy.

See more in The Local’s Italian property section.

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PROPERTY

‘It’s so frustrating’: My 25-year Italian property renovation nightmare

When US-based Davide Fionda embarked on renovating his mother's Italian property, he couldn't have imagined the obstacles and the timescale in store.

'It's so frustrating': My 25-year Italian property renovation nightmare

Building a home in Italy was almost inevitable for Davide, as he’s been visiting the same area in the Le Marche region, where his Italian-born mother grew up, since he was five years old.

Although he lives in Boston, US, and speaks with a charming East Coast twang, he’s also an Italian citizen and has long dreamed of having his own place to stay for the summer.

He began making this dream a reality back in 1997, when a barn that had been in his mother’s family for generations, in the village of Schito-Case Duca, was damaged by an earthquake.

“My mother, who had both her mother and sister in Italy, decided that it would be really nice for us to build our own new home instead of relying on family to host us each time we visit,” Davide said.

“The goal was simple. I would acquire the barn from my mom, renovate it and move in for the summers, as I’m a college teacher and can spend time in Italy,” he added.

“Simple” the goal may have been, but the project itself proved anything but, as Davide came up against unforeseen bureaucratic problems, legal hiccups and personal disappointments.

READ ALSO: The hidden costs of buying a home in Italy

As a former entrepreneur in his professional life, he said he’s “used to getting things done”, owning five companies and selling three.

But conquering Italian property renovation is his biggest challenge to date: “Never in my life have I had so many complications as I’ve had with this house,” he told us.

The earthquake-damaged barn. Photo: Davide Fionda

“In the beginning, I knew exactly what I needed and the costs to carry out the project. My mother was, and is still, living in the United States: the project started when she was approached by her godson, who is a geometra (civil engineer), to help her rebuild this barn.

“I started with what I could control. I sat down with an architect and we created a design. I did research on furniture and fixtures. But then the problems started,” Davide said.

His mother wanted a simple design: an open plan house with floor-to-ceiling windows facing the mountains, spanning two floors – a ground floor and a first floor for the bedrooms.

When they went to look at the progress in 2004, he said they were “horrified” at what they saw.

Instead of windows across the front as we asked for, with views of the spectacular Gran Sasso mountains, he took the entire view with two hallways for entering the property and for the bathroom. The bedrooms upstairs were unusable,” he added.

Davide describes himself as “not a typical Italian”, at two metres in height ,and says he always looks for suitable showers and beds when visiting Italy.

It was one of the reasons building his own home was so attractive, as he could custom-make it to fit his needs.

READ ALSO: What taxes do you need to pay if you own a second home in Italy?

But when they viewed the build, he discovered the first floor had ceilings of just one metre and 40 centimetres – not liveable for most people, never mind someone with Davide’s towering frame.

The results didn’t match the renovation plans that had been filed with the comune (town hall) – they wouldn’t have been approved otherwise, as Davide discovered Italian regulations deemed this height of ceiling in a bedroom uninhabitable.

He said he grew up with the geometra and knew him well, saying they were “best friends”. However, on raising the problems with him, Davide said the building professional “refused to fix the house”, adding, “he took my mother’s money and built a house with no bedrooms”.

He said his mother decided to stop construction after spending almost $100,000 on a house that they “could not live in”, adding that they “returned many times over the years to see the shell of the building that we thought we were going to call our home”.

READ ALSO: My Italian Home: How one ‘bargain basement’ renovation ended up costing over €300K

Faced with a stalled project and unsure what to do next, Davide tried to sell the property but got nowhere. He said the “market wasn’t right” for selling it, so he considered his options for fixing the botched renovations to date.

His Italian property project has been stalled for over two decades. Photo: Davide Fionda

Then, eventually, in January of this year he decided “he was sick of looking at it and it was time to act”.

He intended to use Italy’s Bonus ristrutturazioni (Renovation bonus), which allows homeowners to apply for a 50 percent tax reduction on carrying out renovation work.

On asking for professional opinions on whether the house qualified for this bonus, he said he asked five different people and got five different answers.

In the end, he discovered it was eligible and so he could, in theory, proceed with his latest plans.

READ ALSO:

The aim is to create his mother’s original vision – an open plan space with huge windows overlooking the mountains and bedrooms on the first floor – but habitable this time.

Since the beginning of this year, however, Davide has been stuck and hasn’t made progress.

Setbacks have included trying to get a permit to renovate the house, which has proved difficult since the first geometra reportedly didn’t update the changes to the building.

This thorny issue goes back to exactly who owned the house, as Davide told us it had been sectioned off and parts of the house were owned by various members of the family.

The building headaches roll on for Davide. Photo by Martin Dalsgaard on Unsplash

“Italian law makes you want to rip your hair out,” he said.

Getting the deed in his name has been a huge obstacle in itself, as his mother wasn’t the sole owner and some parts of the land that belonged to her were never recorded.

It’s meant months of waiting while archives have been searched and deeds have been drawn up and transferred, made all the trickier by coordinating it all from thousands of miles away.

Plus, the house category was never changed to a residential one, listed previously as farmland and therefore illegal to live in.

It’s just more unexpected bureaucracy for a project that seems to have no end.

“It has been months and months of all these twists and turns, it’s so frustrating,” he told us.

“This has been a 25-year nightmare,” he added.

A partly restored, but unliveable barn for Davide now. Photo: Davaide Fionda.

Although Davide had originally planned to sort out the more practical parts of the project by the end of May, with a ticket booked to Italy to choose the windows, he’s still stuck in the paperwork part and can’t move forward.

Nothing has happened since January. Three or four times I said, ‘screw this’. But it’s not in my DNA to give up,” he said.

Although he has a strong will, the house has taken its toll on him.

Every time we go, this house stares us in the face and it’s upsetting. Family always ask us, ‘when are you going to finish the house?’ It’s a real source of heartache,” he told us.

From this point, he hopes the paperwork will be completed by August and then he can meet with the contractors to get the process started.

That in itself was a tall order, due to the construction demand and shortage of building companies Italy is currently experiencing.

READ ALSO:

It’s a problem made even more challenging by the fact that he’s based in the States and had to find a company that would apply for the credit for the bonus on his behalf.

Despite it all, he’s hopeful that he will get the house they dreamed of by next August and says he’s learned a lot about renovating property in Italy.

For other would-be home renovators, he advised people to “adjust their timeframe expectations” and expect “anything to do with land or real estate to take forever”.

So what is his secret for not giving up, despite the rollercoaster of events and emotions?

It seems he’s holding on to his vision of blissful summers in il bel paese.

“The beauty of Italy is to be, sit in a town square and have conversations,” he told us.

“It’s a beautiful thing.”

See more in The Local’s Italian property section.

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