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

There's concern that people trying to claim Italy's 'superbonus 110' now face further delays due to problems getting credit lines. Here's what's happening and why.

Italy's building superbonus: What's the problem with credit transfers?
The credit transfer system is hampering access to Italy's 'superbonus 110'. Photo by Guilherme Cunha on Unsplash

There have been numerous changes made to the superbonus scheme in the two years since it was introduced, offering generous discounts to homeowners planning renovation work.

With a potential rebate of up to 110 percent of the cost of works which increase a property’s energy efficiency or reduce the risk of earthquake damage, the bonus has been unsurprisingly popular.

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

But this popularity has led to widespread delays and left many unsure whether they can start or complete building projects in time to meet the deadlines.

Most delays so far have been due to high demand creating backlogs for construction companies, which are also facing a shortage of builders and materials.

All this has meant some projects took months to get started – while others still haven’t begun at all, and some homeowners have now abandoned their plans altogether as a result.

In recent weeks, a new issue has been reported that looks set to cause further issues for some of those hoping to access the scheme.

READ ALSO: Is it too late to claim Italy’s building ‘superbonus’?

More bureaucratic bottlenecks continue to slow down accessing Italy’s superbonus. Photo by Gianluca Carenza on Unsplash

Homeowners have reported problems with the credit transfer system, or the way people access the government funds to pay for the building work.

Some readers of The Local have told us their projects have been put on hold as they’ve been informed by their surveyor or building contractor that financing for the bonus is frozen.

But this issue doesn’t seem to affect all projects or homeowners hoping to access the funds. So what exactly is going on?

One issue is that some banks have stopped buying credit – and therefore lending – in recent months, due to increasingly complex bureaucracy and confusion over the procedure for accessing the bonus.

Meanwhile, billions of euros’ worth of fraudulent claims led the government to introduce stricter rules on accessing the fund, which has in many cases blocked access to credit for months, stalling renovation projects.

The increasing difficulty of obtaining credit has caused ever-worsening supply chain issues.

READ ALSO: How Italy’s building bonuses are delaying the restyle of one-euro homes

In fact, 33,000 businesses are said to be at risk of bankruptcy due to blockages caused by the anti-fraud measures, according to the CNA (Confederazione Nazionale dell’Artigianato e della Piccola e Media Impresa), which represents Italian small business owners.

This equates to some €2.6 billion in credit accrued by suppliers that is yet to be reimbursed, blocked by the halt on lending from the banks.

According to CNA data, more than 60,000 companies have gained credit but no liquidity: that is, no actual money has been received.

The knock-on effect of this is that the superbonus, after having contributed to last year’s increase in GDP, now reportedly risks causing the bankruptcy of many companies and the loss of 150,000 jobs in the construction sector.

Along with almost half (48.6 percent) of the companies the CNA surveyed facing bankruptcy, more than two-thirds (68.4 percent) predict a blockage to their building jobs, leaving construction sites empty and unfinished, while one in five building companies is unable to pay employees.

For homeowners this means there’s a chance renovation projects could be further delayed, or abandoned.

However, according to Italian media reports, it looks likely that the state will need to provide funding to cover the costs and avert a serious economic and social crisis.

How did this happen?

Since it was introduced, the superbonus has undergone some 14 changes and it has been blocked six times, according to Gabriele Buia, president of ANCE, National Association of Building Contractors, (Associazione nazionale costruttori edili).

In response, companies tried to find ways around the credit blocks by finding other banks willing to pay the credit.

Some companies are still in this process, and without payment, works remain on hold.

This bottleneck is causing “very serious problems” in an “anarchic and unregulated” market, according to Buia, with many firms already having done the work but unable to get the credit back, leading to further supply chain issues.

“Two years ago, it was the Wild West. Anyone could get credit to use the bonus – a person, company or business. Due to that, the authorities lost track of sales and plenty of fraudulent claims slipped through the net,” tax expert Nicolò Bolla of Accounting Bolla told us.

“Everything stopped. Then they regulated too much, creating more bureaucracy and delays. So now, they’ve deregulated a little to reopen the transfer of credit,” he added.

The credit transfer system is complex and keeps causing delays to accessing the bonus. Photo: Annie Gray on Unsplash

Along with the reasons above, banks also faced rising inflation, which in part caused them to stop lending.

“Somebody needs to offset the tax at some point. Many banks wanted to buy the credit and resell it to larger banks, but any credit that couldn’t be offset in their taxes got wasted.

“It made the banks less willing to buy credit, which in turn slowed down companies’ and individuals’ ability to access it,” he added.

Now, to keep better track of projects, Italy’s tax office (Agenzia delle Entrate) has introduced new tracking systems in its latest ruling.

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

What continues to cause concern is the timeframe for accessing the superbonus.

Single family homes only have just under four months to complete 30 percent of overall works, with a final deadline of total completion by December 31st, 2022.

As delays roll on and home renovators have already waited for months and months, is there the danger of being left with a half renovated home with the bills to pay?

Worryingly, “absolutely” is the response from Buia.

“Without liquidity, construction sites will either come to a standstill or not start. And they will remain at a standstill until they are certain that their credit will be granted,” he stated.

Are there other ways to access credit for the superbonus?

There are a few routes to obtaining Italy’s superbonus.

The option of offsetting tax from income is likely only financially viable for very high earners (in the highest tax bracket), as any unused tax discount gets lost.

Let’s say your renovation costs come to €100,000, which are tax deductible at 110 percent for five years.

You would then be eligible for a tax break of €22,000 every year for five years, but it all depends on how much income tax (‘Irpef’) you pay to begin with.

If your yearly tax bill comes to less than the tax break, you lose the deduction and will end up footing the rest of the renovation bill.

READ ALSO: Do you have to be Italian to claim Italy’s building bonuses?

Note the latest changes specify tax deductions for the superbonus will be spread over four years, not five as previously.

Little surprise, then, that the other two options to access the funds – transferring the credit (cessione del credito) or discount on the invoice (sconto in fattura) – have been more popular.

It effectively means you either trade the tax credit for cash to an Italian financial institution, such as a bank, for the credit transfer, or directly to your contractor or supplier for the discount on the invoice.

Using the credit transfer system means you’ll get cash back that you paid, directly in your bank account.

It’s a slightly riskier route than a discount on the invoice, as the latter means the the supplier recovers the bonus on your behalf, taking a slice of it as a fee.

So, you get less of the bonus but you don’t have to deal with the paperwork and the contractor takes the burden of getting the credit.

“The easiest option is the discount on the invoice,” according to Bolla.

“It takes care of the credit transfer. If you deal with the bank yourself, it takes some expertise and requires a little knowledge of technology and the system, such as downloading and uploading invoices.

“Contractors have multiple sales, so they are more trained to do that,” he added.

However, as noted, since suppliers have also struggled to get the credit, building projects may be queued until these companies can get reimbursed.

See more in our Italian property section.

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Why towns in Italy’s Salento are offering new residents up to €30,000

As if the sunny south-eastern tip of Italy wasn’t enticing enough, towns in Salento have now announced big cash incentives for people moving in. Why is this needed, and what’s the catch?

Why towns in Italy’s Salento are offering new residents up to €30,000

Another town in southern Italy has joined a long list of depopulated areas which are trying to offload old, unwanted houses at bargain prices and offering cash incentives to new residents.

The municipality of Presicce-Acquarica, which is made up of two adjoining villages, has announced it will soon offer grants worth up to €30,000 to those willing to relocate there.

READ ALSO: The cheap Italian properties buyers are choosing instead of one-euro homes

No doubt the offer will be tempting to anyone who has visited the sunny Salento area, in Italy’s south-eastern Puglia region.

Salento sits right at the bottom of the peninsula that forms the heel of the Italian ‘boot’. It’s a highly popular summer tourist destination known for scorching temperatures, sprawling olive groves, whitewashed houses and long coastlines dotted with wild, pristine beaches.

With its famously abundant local produce, warm climate and authentic, traditional feel, Puglia (and Salento in particular) is an increasingly popular destination for foreign second-home buyers as well as holidaymakers.

The Italian region of Puglia is known for its unspoilt landscapes and agricultural traditions. Photo by Mathilde Ro on Unsplash

But the newly-announced incentives are aimed more at those who would become full-time residents, as the council hopes to attract young families and people planning to start a business.

Those moving to the villages of Presicce or Acquarica must be willing to invest in an older property in the area, and the council says it will subsidise 50 percent of the cost of a property purchase and any renovation work up to a maximum of €30,000.

READ ALSO: Why Italians aren’t snatching up their country’s one-euro homes

Houses for sale as part of the deal are reportedly priced from around 500 euros per square metre, meaning you could buy a 50-square-metre property at around €25,000.

Like other cheap or one-euro homes on sale across Italy, the eligible properties have long been abandoned and are likely to need significant renovation work.

The location of Presicce-Acquarica at the southern tip of the Puglia region. Image: Google Maps

To be eligible for the grant, the council says individuals or families must move their official residency to the town – which would require being a full-time resident in Italy, to begin with, something which could prove problematic for those who would need a visa, or who only want to spend part of the year in Italy.

And buyers would have to be sure about their decision, as the town hall is expecting them to stick around.

“The maximum sum of 30,000 euros is envisaged only if the buyer decides to move their residence for at least 10 years after the purchase,” Mayor Paolo Rizzo said, according to newspaper Corriere della Sera

The municipal council has already launched several incentives to attract new residents, including tax breaks for business start-ups and ‘baby bonuses’ for families with children.

After just 60 births compared to 150 deaths last year, the town hall says it will also grant new resident families €1,000 for every baby born there.


The municipality now has around 9,000 residents, around half of whom live in the old town, where the properties for sale are located.

But attracting new families to this sleepy area may prove a considerable challenge: like many other parts of Italy trying to reverse population decline with generous-sounding incentives, Puglia’s villages often have little public transport infrastructure, scarce public services, and limited employment opportunities.

Many villages in rural Puglia have an older population and are struggling to retain younger residents. Photo: Rich Martello/Unsplash

Perhaps the council is relying on the area’s outstanding beauty to tempt new residents: Presicce-Acquarica is designated as one of Italy’s ‘most beautiful’ villages, with a historic centre filled with ornate churches and Baroque palazzi.

The town is nicknamed the “city of green gold” due to the high quality of the oil from the surrounding olive groves, and it’s only a short drive from the Ionian Sea and the popular tourist destinations of Gallipoli and Santa Maria di Leuca.

The full details of the scheme and application process have however not been finalised yet, and will be published on the town hall’s website in the coming weeks, according to Italian media reports.