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EXPLAINED: How you can claim Italy’s auto bonus for a new car

You could get a discount worth thousands of euros if you buy a car under Italy's new auto bonus. Here's how it works.

EXPLAINED: How you can claim Italy's auto bonus for a new car
You could claim thousands of euros towards a new car with Italy's auto bonus. Photo by Obi - @pixel6propix on Unsplash

The Italian government announced on April 6th that it had approved additional funds for the next three years to encourage the purchase of new cars under its ‘auto bonus’ discount scheme.

You can apply for the new bonus to purchase older models of petrol and diesel cars within a certain limit of CO2 emissions, as well as low-emission electric or hybrid vehicles and motorbikes.

READ ALSO: Italian government announces new car discounts of up to €3,000

Between 2022 and 2024, the Italian government has allocated €650 million per year for the scheme, with a maximum of €5,000 allocated for every new car bought.

Full details of the bonus were made available as the Italian government published the decree last Monday (which you can find here, in Italian).

Based on the decree text, here’s how the scheme works and how much you can claim towards the purchase of a new vehicle.

Which cars does the bonus apply to?

The law takes two parameters into account: carbon dioxide (CO2) emissions, which cannot exceed 135 g/km, and the list price.

The maximum limits are broken down as follows:

  • €35,000 for cars in the 0-20 g/km CO2 range
  • €45,000 for the 21-60 g/km range
  • €35,000 for the 61-135 g/km range

To know how much bonus you can claim, you’ll need to be aware of the exhaust emissions – both of the car you’re buying and potentially, a car you may scrap.

The bonus refers to the six classes of vehicle emissions: Euro 1, 2, 3, 4, 5 and 6. Each class gives an emissions standard based on the registration date of the car and how much CO2 the car produces per kilometre.

You can check Italy’s Ministry of Infrastructure and Sustainable Travel website here to find out the environmental class of your vehicle.

The bonus can be used for both purchasing and leasing of cars.

Do I have to scrap a car to get the bonus on a new car?

No. You only need to scrap a car at the same time if you want to buy hybrid and thermal cars (petrol or diesel) with emissions between 61 and 135 g/km.

If you want to buy an electric car (0-20 g/km) or plug-in hybrid (21-60 g/km) scrapping is not mandatory.

READ ALSO: ‘Expect the unexpected’: What you need to know about driving in Italy

In these two situations, however, those who have a car to be scrapped can get an extra €2,000 bonus.

You don’t have to be the owner of the car to be scrapped either – but they must be living with you in the same household.

Overview of funds available

So, how much you can claim depends on the carbon dioxide emissions and whether you scrap a car at the same time.

Here’s a rundown:

  • Without scrapping
    – 0-20 g/km CO2: €3,000
    – 21-60 g/km: €2,000
  • With scrapping
    – 0-20 g/km: €5,000
    – 21-60 g/km: €4,000
    – 61-135 g/km: €2,000

Let’s look further into how that works out for different car types.

Italy’s auto bonus incentivises electric cars. AFP PHOTO / GABRIEL BOUYS

Electric car incentives up to €5,000

You can claim €3,000 for M1 category vehicles with a price of up to 35,000 euros + VAT.

According to the European Commission, M1 means a vehicle designed for the carriage of passengers and has no more than eight seats in addition to the driver’s seat – for private, non-commercial use.

The vehicle must be at least Euro 6 classification in the European exhaust emissions standard.

You can claim the full amount of €5,000 if you scrap a car at the same time as purchasing a new one.

READ ALSO: ‘How we used a government bonus to buy an electric car in Italy’

However, to be eligible for the extra €2,000, the law allows cars below Euro 5 to be scrapped. This means Euro 0, 1, 2, 3 and 4 classes.

As already indicated, it must have been registered in the name of the purchaser of the new car (or a cohabiting family member) for at least 12 months.

Hybrid car incentives up to €4,000

For the purchase of plug-in hybrid cars with a price of up to €45,000 + VAT, you can claim €2,000 if the vehicle is a Euro 6 class.

A further €2,000 may be added if you scrap a car in a class lower than Euro 5 at the same time.

Car scrapping incentives

To encourage drivers to move towards more ecological private transport, the government is incentivising scrapping older cars with poor exhaust emission ratings in favour of newer, lower emission cars.

The scrapped car, again, must be owned for at least 12 months and must be in an emission class lower than Euro 5.

There are higher discounts on offer, the lower emissions your new vehicle produces:

  • Cars 0-20 g/km CO2 (up to €35,000 + VAT): €3,000 without scrapping – €5,000 with scrapping
  • Cars 21-60 g/km CO2 (up to €45,000 + VAT): €2,000 without scrapping – €4,000 with scrapping
  • Cars 61-135 g/km CO2 (up to €35,000 + VAT): €2,000 with scrapping

There are discounts on offer for those buying mopeds and motorbikes in Italy too. Photo by Lachlan Gowen on Unsplash

Motorbikes and moped bonus

There are also funds available for those looking to buy two wheels, rather than four.

The decree provides incentives for the purchase of electric and hybrid mopeds and motorbikes (categories L1e, L2e, L3e, L4e, L5e, L6e, L7) from 2022 to 2024.

Here’s what you can claim:

  • a 30 percent discount on the purchase price of an electric or hybrid motorbike or moped, granted up to a maximum of €3,000. Or 40 percent up to €4,000 if you scrap a motorbike in an emissions class from Euro 0 to 3.
  • For brand new mopeds and motorbikes, on the other hand, you can get a a 5 percent discount from the dealer, a 40 percent discount on the purchase price and up to €2,500 with scrapping of a motorbike up to class Euro 3.

What else do I need to know?

As with all bonuses, there are some conditions you need to be aware of before claiming the auto bonus.

The vehicle purchased with the incentives must be registered within 180 days of claiming. However, this could change following calls to extend the deadline. That’s because the delivery time is not always less than 180 days, especially for cars in the 21-60 g/km emissions range.

You also can’t sell on a vehicle bought with the bonus until you’ve owned it for at least 12 months.

The bonus is in force now following its publication in the new decree. However, be aware that not all computer systems may have caught up yet should you rush to the dealer ready to sign on the dotted line today.

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PROPERTY

PROPERTY: Is this the end of Italy’s building ‘superbonus’?

As state funds for Italy's popular building 'superbonus' have already been exhausted, Italian authorities are reportedly considering halting any further extensions to the discount scheme.

PROPERTY: Is this the end of Italy's building 'superbonus'?

The Italian government is considering yet more changes for Italy’s so-called building ‘superbonus 110‘, as the allocated budget for the building incentive has already been exceeded, while renovation projects continue to wait in a queue.

According to the latest data from ENEA (Italy’s national agency for new technologies, energy and sustainable economic development), the approximately €33.3 billion that was earmarked for the scheme until 2025 has already gone over by some €400 million.

That makes a total of €33.7 million in claims up until May 31st, 2022.

This means that not only have the Superbonus funds run out, they have also been claimed in excess, potentially meaning that the government could ask for the money back.

In the two years since it was introduced, the building discount scheme has given homeowners the chance to claim a tax deduction of up to 110 percent of the cost of renovation work.

READ ALSO: Nine things we’ve learned about claiming Italy’s building ‘superbonus’

Building jobs covered by the bonus are related to making energy-efficiency upgrades and reducing seismic risk, with the aim of kickstarting Italy’s post-pandemic economic recovery and its construction sector.

The credit transfer system is hampering accessing Italy’s ‘superbonus 110’. Photo by Guilherme Cunha on Unsplash

But the scheme has been beset with delays due to a raft of reasons, including its popularity creating soaring demand, supply chain issues, fraudulent claims, multiple changes to its rules and regulations and a blocking to the credit transfer system – that is, the way people access the government funds to pay for the building work.

These setbacks have caused some homeowners to abandon their plans altogether, or have left many in the middle of works concerned about whether they’ll able to finish their renovation projects in time.

Despite the changes and blockages, however, the bonus has in some way been heralded as a success, considering the vast amount of claims already made.

But what does that mean for those still stuck in the process with works waiting to start or not yet completed?

Property owners who have benefited in part from the subsidies for building renovation work could see their construction site stopped and their funding demanded back, as construction companies are unable to collect the credit.

READ ALSO: Italy’s building superbonus: What’s the problem with credit transfers?

Although no official government statement has yet been made, Italian media reports indicate that, after its latest extension, the authorities don’t intend to roll on the scheme any further beyond 2022 for owners of single family homes.

There have been multiple deadline extensions for this category of property in response to ongoing delays, but the government has ruled out any further lengthening to the current timeframe, reported Il Sole 24 Ore.

As things stand, single unit home owners have until September 30th to complete 30 percent of the overall works, with a final deadline of December 31st, 2022 for all renovations to be completed.

Without further financing and an unblocking of the credit system, those carrying out renovation jobs could find themselves with stalled construction sites, half-finished homes or having to give any claimed money back.

Claiming Italy’s superbonus has been mired by delays and bureaucracy. Photo by Laughing Cynic on Unsplash

The risk to both companies and individuals has prompted criticism from various sectors, as jobs, futures and a continuing stock of energy inefficient houses hang in the balance.

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

“If the government wants the death of the superbonus, it should come and say so… knowing that it is telling companies to go bankrupt,” stated the president of the Productive Businesses Commission, Martina Nardi.

Earlier this month, the CNA (Confederazione Nazionale dell’Artigianato e della Piccola e Media Impresa), which represents Italian small business owners, said some 33,000 businesses are at risk of bankruptcy due to blockages.

Calls to unblock the credit transfer system and overcome the stalemate continue as impending deadlines cause increasing alarm and frustration.

Opening up the credit transfer system would allow construction companies to convert their credit into liquidity, that is, actual money, and thereby complete works already started.

The National Confederation of Craftsmen and Small and Medium Enterprises has spoken of difficulties on the part of “thousands of companies in the construction sector that are unable to transfer tax credits linked to bonuses for the redevelopment of buildings due to the freezing of the market”.

In other words, projects continue to face blockages until building companies can be sure that they’ll receive the money they were granted.

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

In an open letter to Italy’s prime minister Mario Draghi, one architect described the situation as an “almost unprecedented liquidity crisis” that is pushing the country to “the brink of the deepest economic and social crisis ever seen and managed”.

“It has been two years of tribulation, this we can say today, that have turned genius into monstrosity due to the constant changes, corrections and adjustments that keep everyone in suspense,” wrote Daniele Menichini.

The government has been criticised for doing the opposite of what they stated with the superbonus, instead causing further economic downturn. Photo by Damien MEYER / AFP

“The situation that is looming at this time is of uncertainty and insecurity, in which society will hit a wall because of the blocked credits and the blocking of all those projects that were about to start,” he added.

While the government has expressed no intention to refinance the scheme beyond 2022 for single family homes, a glimmer of hope remains via an opening up of credit in a further expected amendment to the superbonus.

READ ALSO:

Easing the bottleneck would ensure that at least the projects that will meet the 2022 deadlines can be financed and completed.

To do this, the government is reportedly considering extending the ability to obtain credit to other parties besides banks, such as construction companies themselves. In doing so, it removes one extra bureaucratic hurdle and would unlock the current standstill due to many banks no longer buying credit.

The question of how the authorities will foot the bill for the already overrun budget still remains, with some reports suggesting an extra financial boost from the government will be needed until the end of 2022.

Other possibilities point towards allowing firms to carry over their credit surpluses until next year, to overcome the obligation to offset the credit this year.

Meanwhile, some categories of building have until 2025 to claim state funds with declining amounts available each year, but the future financing of which still isn’t clear.

The Local will continue to provide updates on this.

See more in our Italian property section.

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