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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

How much does it cost to raise a child in Italy?

How big is the financial commitment parents have to make in Italy to pay for their offspring’s needs and expenses until they’re grown up and independent? Here's a look at the predicted costs.

How much does it cost to raise a child in Italy?

Family is the bedrock of Italian society, but it’s also an unbalanced economic crutch, propping up children who leave home much later than most of their European counterparts.

Various factors are at play, from a declining birth rate, youth unemployment, being unable to get on the property ladder to young Italians moving abroad in search of better financial opportunities.

It probably comes as little shock, then, that parents in Italy end up forking out huge sums of cash to support their offspring through childhood and early adulthood (and beyond).

Even just up to the age of 18, raising a child in Italy can cost upwards of €320,000, according to data from Italian consumer research body ONF (Osservatorio Nazionale Federconsumatori).

The average spend of raising a child from 0-18 years is €175,642, but it rises in families with high incomes, classed as over €70,000 per year.

READ ALSO: Italian class sizes set to shrink as population falls further

Researchers noted that the cost of bringing up children has jumped up following the effects of the pandemic too: compared to 2018, child-rearing expenses increased by 1.2 percent by 2020.

The decrease in expenditure related to transport due to spending more time at home, as well as those incurred for sports and leisure activities, was not enough to mitigate the increase in costs for housing and utilities, which increased by 12 percent compared to 2018.

Photo by Suzanne Emily O’Connor on Unsplash

Food prices rose by 8 percent compared to 2018 and education and care jumped by 6 percent for the same timeframe.

In fact, Italy ranks as the third most expensive country in the world for raising children, only coming behind South Korea and China, according to data from investment bank JEF.

The pandemic has contributed to extending an already growing phenomenon: the decrease in annual income of Italian households.

Household income dropped by 2.8 percent from 2019 to 2020, the report found, citing data from national statistics agency Istat. It marks a further squeeze for families, especially low-income and single-parent families.

Depending on earnings, the amount needed to bring up a child until the age of 18 varies considerably.

READ ALSO: ‘Kids are adored here’: What being a parent in Italy is really like

A two-parent family with an annual income of €22,500 spends an average of €118,234.15 to bring up a child until the age of 18; for the same type of family but with an average income of €34,000 per year, the total expenditure to bring up a child increases to €175,642.72.

For high-income families, stated as over €70,000 annually, raising a child costs €321,617.36 on average.

The figures mark an increase of around €5,000 for low- and middle-income families, and a much sharper rise of €50,000 for high-income families, compared to ten years ago.

The money gets spent on housing, food, clothing, health, education and ‘other’ categories. The report revealed that the average spend on a child aged 16 years old is almost €11,500 annually, amounting to €955.78 per month.

Almost €2,000 per year gets spent on food, €1,615 goes on transport and communication, €782 goes on clothing and €1,600 goes on education annually, the report found.

They begin small, yet the costs are anything but. (Photo by LOIC VENANCE / AFP)

For the ONF, “these data highlight how, today more than ever, having a child is becoming a luxury reserved for the few, which fewer and fewer Italians are able to afford.”

READ ALSO:

The numbers on supporting children after their 18th birthday are a little hazier, as when children eventually fly the nest varies – but figures from Eurostat show that Italy ranks third in Europe for the average oldest age at which children move out of the parental home, at 30.2 years old.

Only young people from Croatia and Slovakia wait longer to live independently, while the EU average for flying the nest is 26.4 years old.

Even then after eventually leaving home at over 30 years old, it’s not entirely clear how many Italians are fully independent once they get their own address, or whether their parents continue to bankroll their living costs.

Italy’s president Sergio Mattarella sent a message to Italy’s Birth Foundation (Fondazione per la Natalità) in May stating, “The demographic structure of the country suffers from serious imbalances that significantly affect the development of our society.”

In response to worsening economic circumstances, the Italian government has recently pledged to do more to help people have families and reverse Italy’s continuing declining birth rate.

It has introduced the Single Universal Allowance (L’assegno unico e universale), but along with it has dropped various so-called ‘baby bonuses’ that provided lump sums to new parents.

The new allowance is a monthly means-tested benefit for those who have children, or are about to have a child. It is payable from the seventh month of pregnancy until the child reaches the age of 18 or in some cases, 21. For more information on what it is and how to claim it, see here.

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