EXPLAINED: How Italy has changed its building superbonus - again
The Italian government on Thursday brought in more changes to the popular ‘superbonus’ scheme. Here’s what this means for property renovations in 2023.
Italy’s building superbonus, a scheme offering generous discounts to homeowners carrying out renovation works, has been extraordinarily popular in the two and a half years since its introduction.
But the bonus’s history has been complex, to say the least, as multiple amendments, delays and controversies have made claiming the incentive a difficult experience for many.
READ ALSO: Reader question: Has Italy’s ‘superbonus 110’ been scrapped?
The superbonus saga continues into 2023, after major changes in early January slashed the maximum rebate from 110 percent of the total cost of works to 90 percent, and cut down the number of people eligible to claim.
The Italian government has now made further changes to the scheme, under a ministerial decree issued on Thursday, February 16th, which will affect homeowners planning to use the bonus for renovation work starting in 2023.
The latest changes include a radical overhaul of the claiming system, as two of the three original routes to access the discount have now been permanently scrapped.
The latest changes to the superbonus include a radical overhaul of the claiming system. Photo by Valentine CHAPUIS / AFP
Notably, homeowners applying for the bonus after February 17th will no longer be able to sell tax credit to a bank in exchange for cash (known as cessione del credito) nor to sell credit directly to their construction company to receive a discount on their final invoice (sconto in fattura).
This will essentially leave homeowners with just one option left: claiming the bonus in the form of tax deductions spread over four years (detrazione fiscale).
What are the reasons behind the change?
This change is the government’s last-ditch attempt to resolve a long-running credit transfer impasse that has been hindering the bonus claiming process for over a year now.
As previously reported by The Local, billions of euros’ worth of fraudulent claims led the government to introduce stricter rules on accessing the fund early last year.
READ ALSO: Italy’s building superbonus: What’s the problem with credit transfers?
Tougher regulation quickly blocked the exchange of tax credit, stalling countless renovation projects and pushing tens of thousands of construction companies to the brink of bankruptcy.
By outlawing credit exchanges, the government hopes to unlock currently ‘stranded’ credit, which amounts to around 19 billion euros.
What does it all mean for homeowners?
Trading tax credit or choosing to receive a discount on the invoice were by far the most convenient options for homeowners, since the tax deduction route is only available to high earners.
The most convenient routes to claim the superbonus funds have now been scrapped. Photo by Pau BARRENA / AFP
The funds can only be accessed through tax deductions if one's yearly income tax (Irpef) bill is higher than the yearly bonus-related tax break.
For instance, if a claimant’s yearly tax break is 25,000 euros, but their yearly income tax bill is lower than that figure, they won’t be able to access the bonus funds through tax deductions.
The tax deduction avenue is not available to non-residents as only residents pay income tax (Irpef) in Italy.
All in all, the government’s decision to scrap the sale of tax credit and invoice discounts is going to further reduce the bonus eligibility pool, making funds all but inaccessible to non-residents and low-income residents.
It’s worth stressing that the latest change will not apply retroactively, meaning that homeowners who started relevant renovation work prior to February 17th will still have access to all three ‘claiming routes’.
Please note that The Local cannot advise on individual cases. For more information on claiming Italy’s building bonuses, homeowners are advised to consult a qualified Italian building surveyor or independent financial advisor.
See more in our Italian property section.
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Italy’s building superbonus, a scheme offering generous discounts to homeowners carrying out renovation works, has been extraordinarily popular in the two and a half years since its introduction.
But the bonus’s history has been complex, to say the least, as multiple amendments, delays and controversies have made claiming the incentive a difficult experience for many.
READ ALSO: Reader question: Has Italy’s ‘superbonus 110’ been scrapped?
The superbonus saga continues into 2023, after major changes in early January slashed the maximum rebate from 110 percent of the total cost of works to 90 percent, and cut down the number of people eligible to claim.
The Italian government has now made further changes to the scheme, under a ministerial decree issued on Thursday, February 16th, which will affect homeowners planning to use the bonus for renovation work starting in 2023.
The latest changes include a radical overhaul of the claiming system, as two of the three original routes to access the discount have now been permanently scrapped.
Notably, homeowners applying for the bonus after February 17th will no longer be able to sell tax credit to a bank in exchange for cash (known as cessione del credito) nor to sell credit directly to their construction company to receive a discount on their final invoice (sconto in fattura).
This will essentially leave homeowners with just one option left: claiming the bonus in the form of tax deductions spread over four years (detrazione fiscale).
What are the reasons behind the change?
This change is the government’s last-ditch attempt to resolve a long-running credit transfer impasse that has been hindering the bonus claiming process for over a year now.
As previously reported by The Local, billions of euros’ worth of fraudulent claims led the government to introduce stricter rules on accessing the fund early last year.
READ ALSO: Italy’s building superbonus: What’s the problem with credit transfers?
Tougher regulation quickly blocked the exchange of tax credit, stalling countless renovation projects and pushing tens of thousands of construction companies to the brink of bankruptcy.
By outlawing credit exchanges, the government hopes to unlock currently ‘stranded’ credit, which amounts to around 19 billion euros.
What does it all mean for homeowners?
Trading tax credit or choosing to receive a discount on the invoice were by far the most convenient options for homeowners, since the tax deduction route is only available to high earners.
The funds can only be accessed through tax deductions if one's yearly income tax (Irpef) bill is higher than the yearly bonus-related tax break.
For instance, if a claimant’s yearly tax break is 25,000 euros, but their yearly income tax bill is lower than that figure, they won’t be able to access the bonus funds through tax deductions.
The tax deduction avenue is not available to non-residents as only residents pay income tax (Irpef) in Italy.
All in all, the government’s decision to scrap the sale of tax credit and invoice discounts is going to further reduce the bonus eligibility pool, making funds all but inaccessible to non-residents and low-income residents.
It’s worth stressing that the latest change will not apply retroactively, meaning that homeowners who started relevant renovation work prior to February 17th will still have access to all three ‘claiming routes’.
Please note that The Local cannot advise on individual cases. For more information on claiming Italy’s building bonuses, homeowners are advised to consult a qualified Italian building surveyor or independent financial advisor.
See more in our Italian property section.
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