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PROPERTY

Italy extends building ‘superbonus’ for home renovations

The Italian authorities have rolled on the deadline once again to access Italy's popular 'superbonus' discount scheme, giving homebuilders further opportunity to complete delayed renovations.

Italy extends building 'superbonus' for home renovations
Home renovators have more time to access Italy's building superbonus 110, following the government's announcement to extend the deadline again. (Photo by ALBERTO PIZZOLI / AFP)

Owners of single family homes will get a three-month extension to carry out building works using Italy’s ‘superbonus 110‘, the Italian government announced on Monday.

It means that those using Italy’s popular building bonus to renovate their homes will now have until September 30th to complete 30 percent of the overall works.

The extension replaces the previous completion date of 30 percent of renovations by June 30th, which presented a risk to those caught up in delays and unable to meet the deadline in time.

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

The final overall date to claim the superbonus for this category of property is still December 31st, 2022.

It’s the latest extension to come for this in-demand building incentive – the last budget law had provided for the extension of the superbonus to the end of the year, extending the previous final deadline of June 30th 2022 for detached houses.

More opportunity to access the building bonus was already anticipated in the government’s latest Economic and Financial Document (Il documento di economia e finanza or ‘DEF’), which outlines the government’s economic policy and sets fiscal targets for the year.

More time for homebuilders to complete their renovation projects is aimed to ease the pressure on the building backlog. Photo: Sensei Minimal on Unsplash

The now confirmed extension to the bonus forms part of a new €14 billion decree – more than double the amount originally budgeted.

Rolling on Italy’s superbonus is one measure in the government’s new energy and investment decree (decreto energia e investimenti), including continuing cuts to excise duties on fuel, providing aid to companies hardest hit by the war in Ukraine and introducing national energy policies to reduce gas and electricity bills.

This building bonus has attracted plenty of international attention since it was first introduced in May 2020 to help restart Italy’s Covid-hit economy.

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It offers homeowners a tax deduction of up to 110 percent the cost of renovation work related to making energy-efficiency upgrades and reducing seismic risk.

But the popular scheme has been marred by bureaucracy, fraudulent claims and resulting delays, leaving many property owners trying to use it concerned about whether they’ll able to finish their renovation projects in time.

This latest extension to the June deadline goes some way to easing the pressure on those caught up in the middle of works – if 30 percent of the overall renovations hadn’t been completed by the end of June, homebuilders couldn’t continue to claim the bonus until the final deadline of December 31st, 2022.

That would mean property owners would have had to either foot the bill themselves or be left with unfinished projects.

Other types of buildings have different deadlines, however.

For work carried out on condominiums and by individuals on buildings consisting of two to four separate building units (even if owned by a single owner or co-owned by several individuals), the deadline to access the superbonus is December 31st, 2025.

However, the amount you can claim drops each year – after 110 percent this year, the bonus is reduced to 70 percent for the whole of 2024 and 65 percent for the year after until December 31st 2025.

See more in The Local’s Italian property section.

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MONEY

Italy ranked among worst in Europe for tax burden on families

Working parents in Italy face some of the highest rates of taxation among developed countries, according to a new international report.

Italy ranked among worst in Europe for tax burden on families

Italian employees pay one of the highest rates of tax relative to income of all countries included in a new study by the OECD (Organisation for Economic Co-operation and Development), coming only behind Belgium, Germany, Austria and France.

The OECD report measured the ‘tax wedge’ or tax burden faced by both the employee and the employer in each country last year.

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

The figure includes income tax paid by workers, and social security contributions, which in Italy are paid by both the employee and employer.

According to the findings, Italy’s tax wedge is especially high for families with children, compared to a single worker with no dependents, ranking fourth-highest in this case among the 38 OECD member countries.

Only France, Finland and Turkey came higher.

In most of the countries studied, there are tax benefits for families with children. That’s because “most OECD countries provide benefits to families with children through cash transfers and preferential tax provisions,” reads the report.

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But Italy recorded lower than average reductions, with a decrease of just 8.6 percentage points for family benefits – less than the OECD average of 10 percentage points.

That meant Italy ranked as having the fourth-highest tax wedge for an average married worker with two children, amounting to 37.9 percent in 2021, while the OECD average is 24.6 percent.

The Italian government has recently pledged to do more to help families with the cost of living, including by introducing the Single Universal Allowance (L’assegno unico e universale).

However, this payment replaces various so-called ‘baby bonuses’, meaning the government is scrapping lump sums of hundreds of euros previously paid to help new parents cover the cost of starting a family.

Looking solely at the net tax that a worker pays on income, the same category of employee paid an average tax rate of 18.3 percent in 2021, compared with the 13.1 percent OECD average.

In other words, the take-home pay of an average married worker with two children in Italy, after tax and family benefits, is 81.7 percent of their gross wage, compared to 86.9 percent for the OECD average.

The discouraging figures come after a recent report estimated the total cost of raising a child in Italy up to the age of 18 at €321,617.

For a single employed person with no children, Italy had the fifth-highest tax wedge, slipping slightly from fourth place in 2020.

The tax wedge came to 46.5 percent in 2021 for single workers, while the OECD average tax wedge was 34.6 percent.

READ ALSO: How much parental leave do you get in Italy?

The OECD also reports that, in Italy, contributions and income tax account for 84 percent of the tax wedge, compared to 77 percent on average.

Employment taxation has bounced back for most countries in 2021 following the Covid-19 pandemic, the findings showed.

“Increases to the tax wedge in 2021 have more than offset the sharp declines recorded in 2020 and have seen the tax wedge rebound to higher levels than in 2019, before the pandemic,” the report stated.

Taxation rates for Italian workers remain relatively high despite employment taxation reforms in 2021 that included cutting income tax for lower earners.

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