SHARE
COPY LINK
For members

PROPERTY

Italian property news roundup: ‘Superbonus’ delays and tax rule changes

From tax changes to the latest news on the 110% 'superbonus', catch all the Italian property-related updates you might have missed in The Local's weekly roundup.

Superbonus bureaucracy causes delays

Italy’s ‘superbonus 110‘ is one of many government measures brought in to mitigate the economic impact of the pandemic, offering tax deductions of up to 110% on certain expenses involved in renovating a property.

While you’re very unlikely to be able to claim the full 110%, there are still significant amounts of money to be saved – and unsurprisingly, interest in the scheme has been massive.

So massive in fact that its popularity, and the complexity of the paperwork involved, has seen building companies dealing with a flood of enquiries and a backlog of work. Many are now booked up well into next year, while also facing labour and material shortages.

With no chance of starting a new project anytime soon, some people have simply given up on their renovation plans.

And others midway through projects are now concerned they may not finish in time, and are tensely awaiting confirmation that the claim period will be extended beyond the current deadline of June 30th, 2022 (for single-family homes).

Read more about the current situation here – and please do contact us and let us know if you’re affected.

Will a change to Italy’s tax rules affect property prices?

You may have seen reports in the Italian media this week about an ongoing government row over changes to the rules on property taxes, with claims from certain politicians that homeowners will be out of pocket. So what exactly is going on?

The government is planning reforms to the property tax and land registry system which it says will increase transparency and help stop tax evasion – a major issue in Italy, where property tax evasion is thought to cost the state some six billion euros every year.

It’s a huge bureaucratic project, aiming to overhaul the system in order to make it easier for authorities to spot the estimated one million unregistered ‘ghost’ properties and other illegal builds in Italy.

The reform includes changes to the way property values are calculated on the catasto (the cadastral record: the property records submitted to the town hall) which, as anyone who has ever looked at one may have noticed, often show values way below market rates.

These rates are used to calculate local taxes (such as IMU), house purchase taxes and other fees –  and the reform means they would in future be changed to reflect actual purchase prices.

The reform comes after the European Commission warned in 2019 that Italy’s “land and property values… which serve as the basis for calculating property tax, are largely outdated”.

The details are yet to be worked out and finalised, but the political argument is based on concerns that this change would push property prices and/or taxes up in future.

But the reform would change nothing before 2026 and even after that, Prime Minister Mario Draghi insisted this week that: “Nobody will pay more and nobody less” due to the reforms.

“Everything will remain as before and the average taxpayer will not notice anything,” he told reporters.

Another part of the reform plan, that would come into effect earlier, in 2022, is to ease the income tax burden on medium earners and potentially also slash tax costs for first-time home buyers.

We’ll bring you further updates on any changes to the tax system once details are confirmed.

Thinking of installing solar panels?

With all the doom and gloom recently about soaring energy prices in Italy and beyond, the idea of switching to solar power may be increasingly appealing to homeowners – especially in a country with no shortage of sunlight.

READ ALSO: Rising energy prices: How to save money on your bills in Italy

More and more Italian households and businesses have been turning to solar energy in recent years – in fact the number of photovoltaic systems in Italy has increased by more than tenfold over the last decade, and the country now ranks top worldwide for electricity consumption covered by solar panels according to new research 

Systems are becoming more affordable and accessible, too – you can now even buy them at Ikea.

With a multitude of options on the market and many combinations of products suitable for a 3 kW photovoltaic system (the standard household power supply in Italy) it can be hard to know where to start, or whether it’s worth the investment.

Find a breakdown of the options, costs and potential savings involved here.

In case you missed it:

Until and unless Italy does slash some of those property taxes mentioned above, purchasing a home here remains an expensive – and extremely bureaucratic – process.

But if you’re going to buy, there may not be a better time than right now.

From falling house prices to record low interest rates, I wrote an overview of why there are some major financial advantages to buying at the moment. (And I’m not just saying it – these are the conditions that persuaded me to buy a property myself this summer.)

If you have any tips, stories or thoughts on what we should include in the next edition of the property roundup, we’d love to hear from you. Email us here.

See more in The Local’s Italian property section.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

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.

SHOW COMMENTS