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PROPERTY

Italy’s ‘superbonus’ renovations delayed by builder shortages and bureaucracy

The popularity of Italy's so-called 'superbonus' and the complexity of accessing it has led to setbacks in renovation timescales, leaving some property owners worried about whether they'll actually complete their building jobs in time.

 People at a building site in Catania, Italy.
Complex bureaucracy has meant a long wait for many to start their renovation projects.  Photo: Andreas Solaro/AFP

For months now, people planning to renovate their property using the government’s financial incentives have faced delays.

Bureaucratic procedures and difficulties with authorising work were noted as early as March – and it’s a backlog that keeps building up, with some reporting they’ve abandoned their plans altogether by this point.

Italy introduced the ‘superbonus 110‘ to restart a sluggish economy following the impacts of the pandemic, offering homeowners a tax deduction of up to 110% on expenses related to making energy upgrades and reducing seismic risk.

READ ALSO: From renovating property to buying a new car: 28 tax ‘bonuses’ you can claim from the Italian government

Interest in the scheme has been so high that the government has confirmed it intends to extend the bonus beyond 2022, following surging demand for construction companies.

Economy Minister Daniele Franco put the plans in writing in the Italian government’s latest Economic and Financial Document (DEF) update, which sets economic targets for the future.

“The planned path for the three-year period 2022-2024 will make it possible to cover the needs for unchanged policies and the renewal of several measures of economic and social importance,” he wrote.

Economy Deputy Minister Laura Castelli of the Five Star Movement (M5S) told reporters, “The confirmation of the extension of the 110% Superbonus to 2023 is excellent news. It is a measure that works very well, as well as being one of the main pillars of the ecological transition, which is helping the economy to restart.”

Builders carry out renovations.
Italy’s ‘superbonus’ funds are available, but the scheme’s popularity is causing delays. Photo: Annie Gray on Unsplash

The ‘superbonus’ extension has still not been funded

It’s not all plain sailing for those planning on making renovations just yet.

Despite Italian media reporting that there’s no doubt the bonus will be extended, it’s yet to be included in the next Budget Law (Legge di Bilancio), meaning it can’t completely be taken for granted.

The Budget Law outlines the government’s plans for healthcare, support for businesses and families, and investments in the work sector for the following year.

The government didn’t release the law for 2021 until 31st December 2020, which means those hoping for concrete news about the extended ‘superbonus’ will likely be waiting until the last moment of this year too.

There is a chance that it could be made available more immediately, using the funds in Italy’s National Recovery Plan (Il Piano Nazionale di Ripresa e Resilienza – PNRR), but nothing has been announced so far.

An extension of the bonus is desperately needed by those who have been stuck waiting for their building projects to get off the ground, after months of standstill and as current deadlines to access the funds grow closer.

READ ALSO:

A quarterly report by market research firm Nomisma found that, one year on from the launch of the ‘superbonus’, there have been “obstacles in the path meaning that the number of [renovation] projects increased but not at the expected speed, and there is resignation and discouragement on the part of Italian families.”

As things stand, the deadlines for those hoping to claim the ‘superbonus’ vary depending on the type of building on which the work is being carried out

  1. Single-family buildings: deadline June 30th, 2022
  2. Multi-family buildings with 2 to 4 units: December 31st, 2022
  3. Condominiums: December 31st, 2022
  4. Social housing: December 31st, 2023

For single-family buildings, there is a bit of wiggle room in these timescales, as there is an extension to December 2022 if 60% of the works have been completed by the end of June deadline.

However, many building businesses are unable to start new projects until at least early 2022 as a result of the current demand for carrying out restoration works.

No construction companies available

Luca Gheduzzi, from the Bologna province in Emilia Romagna, wanted to take advantage of the bonus to update his home, but unfortunately, he said he’s put his ideas on hold.

His geometra (civil surveyor) informed him that too many companies don’t have the time to take on new clients, as they haven’t even started on the projects that should have begun months ago.

He claimed that he also “had to be careful” as he learned that many companies don’t have their paperwork in order, which further added to the delays.

Deborah Sacchetti from the same area has bought a house to move into with her husband and son, a property they bought intending to use the bonus to renovate.

She noted that they are behind schedule as they can’t find any companies available to begin works. The only one they managed to find quoted a price that was much too high for their budget – because most people can’t access the full amount of bonus stated too.

READ ALSO: How you could claim Italy’s building bonus multiple times for the same property

A property undergoing renovation works.
Some property owners are making back-up plans in case they cant access the bonuses in time. Photo; Brett Jordan on Unsplash

When asked what they’ll do if they don’t start works in time, she said, “We absolutely have to sell our current house and move by December 2022 because otherwise we would have to pay a duty called registration tax (imposta da registro), which is very high.”

If they can’t pull it off, she said they’d have to sell both their houses and buy a new one, but that is “the worst case scenario”.

Covid, material shortages and demand for builders add to delays

Enrico Fabbri, an Italian citizen, is now over one year into his building project. Along with his wife, they bought an older property last September, planning to use the ‘superbonus’ to carry out renovations.

They contacted their geometra in September and he was already so busy that he wasn’t available to consider their project until January 2021.

They were told that works would begin in April or May, but from there, Enrico said “the buck was passed” from the termotecnico (thermal technician) to the ingegnere strutturale (structural engineer).

READ ALSO:

“And that’s when the problems started,” he told us.

“Everything got delayed further and further. Many people want this economic help, which has added to the wait. Response times have become slower and slower. Perhaps a tecnico would normally take a month to respond – now it’s three to four months before you get an answer,” he added.

A wooden shutter on a yellow house in Italy.
The price of raw materials has also shot up, adding further pressure to renovation projects. Photo: Alissa De Leva on Unsplash

Covid has also played a part in the delays, with the problem of contagion creating another cause of stoppage.

“Our engineer got unlucky, as he caught Covid. So that meant further lags in the process while he was getting back on his feet and back to work,” Enrico continued.

Just like Deborah found, Enrico quickly discovered that there weren’t enough construction companies available to complete all these building projects, as they are “snowed under”.

He said that out of four firms that he called, only two got back to him, which was “unprofessional behaviour”.

The two that did respond took two months to reply with a quote, one disappeared after that and didn’t pick up the phone, leaving just one company that they had to go with.

“That’s the main objective by this point – find a company that has the time to do the building work,” he said.

Another stumbling block is the boom in material prices, another consequence of the popularity of the bonus.

“Material prices have risen, which has altered our budget because everything costs more than we were initially told,” Enrico said.

Shortages of raw materials such as wood and insulation have been reported by Italy’s manufacturing industry, noting price hikes of as much as 200%.

READ ALSO: Why we decided to build our new house in Italy out of wood

That means some original quotes might be way off when building work actually gets underway, causing some to simply not be able to afford the renovations anymore.

As for bureaucracy, Enrico said that their geometra has shielded them from most of the red tape, as the surveyor was the one who submitted plans to the comune (Town Hall) and communicated with the parties involved in getting the project off the ground.

Finally, by the end of September, works were due to begin. The construction firm arrived with the scaffolding and all was set to finally take off, with plenty of time before the bonus is presently due to run out.

When asked how the first stage of restoration is going at last, he said, “They’re nowhere to be seen. The scaffolding is up, but there are no builders and nothing has happened yet.”

See more in The Local’s Italian property section.

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MONEY

What you need to know about opening a bank account in Italy

There are a few things to know before choosing the right place to put your cash in Italy. Here’s our guide to finding the best bank for you.

What you need to know about opening a bank account in Italy

Money makes the world go round, they say, and even in notoriously cash-friendly Italy, your life will be a lot easier if you have somewhere to put it.

But with daunting paperwork, confusing opening hours and array of diverse offerings, interacting with Italian banks can be challenging.

Here’s our guide to opening a bank account in Italy to get you started.

Step one: Know what’s out there

I come from Canada, where you can count the number of big banks on one hand. That means Italy’s banking sector can be a little dizzying in comparison. At the time of writing, Italy has more than 20 banks with assets of more than €10 billion. 

Among the biggest names in Italy are Dutch-based ING, Germany-based Deutsche Bank, Italy’s own Unicredit, and the Banca Nazionale di Lavoro (now owned by France’s BNP Paribas).

READ ALSO: Which are the best Italian banks for foreigners?

Alongside these big national banks, there are regional providers like the Banca Popolare di Puglia e Basilicata or the Banco di Sardegna, which confusingly operate branches far from their respective homelands. As a result, it’s not uncommon to find a Pugliese bank next to a Venetian one in Lombardy, or encounter a local bank that has just a handful of branches throughout the country.

Consider the fees applied to transactions and cash withdrawals when choosing your Italian bank account. (Photo by ANDREAS SOLARO / AFP)

Disrupting the banking world in recent years has also been the emergence of a whole new crop of online banks, like N26 and HYPE, which offer very low fees by operating no physical branches.

And lastly, there’s the post office: Poste Italiane, in an unholy alliance of paper-based bureaucracy, also operates a consumer bank notorious for slowing down postal lines everywhere.

Knowing the lay of the land will help you pick out the best offering for your life and location. Consider your choice carefully. When we arrived, we chose N26 for its low fees and easy sign-up. But soon, we needed a bigger bank that could offer services like a fideiussione (renter’s guarantee).

Choosing the right bank is about more than knowing if it has a branch in your area — as you settle, a bank’s mortgage offerings, insurance, or high-interest savings accounts may become more important to you.

Step two: Decide what account you need

Technically, if you’re over the age of 18, you’re eligible to open an account in Italy — but most account types are only available to residents, which includes foreign nationals who are here because of a valid job offer or degree program.

The most common account type is a conto corrente or current account (a checking account for American readers). These accounts are designed with daily transactions in mind, meaning there are often opportunities to save on fees by maintaining a minimum deposit or balance.

Ask an expert: Which are the best UK banks for Brits living in Italy?

To earn higher interest, you can place your savings in a conto di risparmio or savings account, which offer fewer transfers and transactions in exchange for higher interest. There is also the conto di deposito, a more restrictive but even higher-interest savings account designed for parking your money just to earn.

Lastly, there are conti correnti esteri, foreign accounts, which can offer deals on wire transfers or allow you to use your home currency and save on exchange fees. These accounts don’t require you to be an Italian resident, making them a good choice for people staying for an indeterminate time.

Step three: Review costs

There’s a reason some of Italy’s nicest buildings belong to banks — this country’s banking fees are among the highest in Europe.

Though comparisons are hard to come by, in 2009 the European Commission found that fees in Italy could be four or five times the amount for the same accounts in the Netherlands, Ireland, or Germany.

But choose the right offer, and they don’t have to be — one analysis found these fees could vary by as much as 10 times between banks.

On average, a typical current account cost nearly €95 per year in 2022, with high-interest savings accounts costing even more. But that average dropped to just €25 for online-only accounts like those offered by N26.

A branch of Unicredit bank in Milan. (Photo by FILIPPO MONTEFORTE / AFP)

In exchange for these fees, banks offer a range of different services — everything from higher interest to lower transaction fees.

Most banks won’t charge a setup fee, but may charge to issue you with your first debit or credit card. Other services, like cheques, wire transfers, or even ATM withdrawals above a monthly limit are likely to be met with other fees.

Il Sole 24 Ore, one of Italy’s leading financial newspapers, has an online tool that will help you compare bank offers, automatically deducting your expenses from your anticipated interest to show you exactly how much your account is likely to cost.

Make sure to read the fine print — some “fee-free” accounts are promotional offers and expire after a year or so, leaving you paying hefty fees. Others look expensive, but are free if you maintain a low minimum balance or make monthly deposits of just a few hundred euro.

Step four: Visit a branch or sign up online

Now that you know the account type and bank you’re looking for, you can dive into the paperwork.

For a variety of reasons, it’s generally best to wait until you are in Italy to open your account — even in the case of online accounts or conti esteri. Banks will want to mail you your card and know a fixed address in Italy, and you will need an Italian tax code (codice fiscale) to get started in any case.

For online accounts like N26 and HYPE, paperwork is often minimal and requires filing out a few online forms and uploading your ID. 

In physical banks, by contrast, it can be quite extensive, involving a lot of fine print in Italian. If your language skills are poor, consider bringing a friend who can help you review your contracts, or select a bank that you know offers counter service in English.

To open an account, you’ll need the following documents:

  • ID or a passport;
  • Codice fiscale;
  • Residency permit (or, if you’re a non-resident, proof of address like a bill or piece of certified mail); and
  • Proof of your employment income (i.e., a contract or tax return).

Businesses will also need to provide the company’s registration certificate, a certificate of good standing, and statements of the financial status of all shareholders with more than a 20 percent stake in the company.

Take these to your local branch to get the process started. Make sure to check your local bank’s opening hours first — Italian banks are notorious for taking long lunches and closing early in the afternoon.

Closing an account

If you’ve decided it’s time to say goodbye to your bank, it’s unfortunately not quite as simple as visiting a branch.

In most cases, you will need to send a registered letter or raccomandata to your local branch before you show up in person, including signatures from everyone on the account.

And as usual, make sure to read your contract carefully — some banks will even charge a fee to close your account.

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