Read news from:
Austria
SHARE
COPY LINK
For members

FINANCE

The building bonuses you could claim in Italy in 2021

The Italian government is stumping up state funds for renovating and improving the safety of property. Here's an overview of what you need to know about accessing the main bonuses currently up for grabs.

Published: 3 April 2021 16:43 CEST
Updated: 7 April 2021 09:01 CEST
The building bonuses you could claim in Italy in 2021
From renovations to furniture, you could claim Italy's house bonuses this year. Photo: Alicia Steels/Unsplash

Homeowners in Italy can benefit from a variety of building bonuses on offer, which have been extended throughout 2021.

There’s even more financial aid you could get your hands on in addition to the widely reported Superbonus scheme, which offers a tax rebate on up to 110 percent of the expenses incurred for certain property restorations.

The Decreto Rilancio (Relaunch Decree), introduced in 2020 in response to the Covid-19 emergency, saw an increase to the state kitty for both the so-called ‘Ecobonus’ and the ‘Sismabonus’ restoration bonuses.

Since almost three-quarters of Italy’s homes are over 50 years’ old, according to the Agenzia delle Entrate (Italian Revenue Agency), there’s an enduring demand for reinvigorating many neglected properties.

But there’s more you could be eligible to claim this year, in conjunction with the above two schemes.

Further to the financial package available for making energy upgrades and reducing seismic risk, there is also a government pot for furniture, refreshing gardens and optimising water consumption.

READ ALSO: Which areas of Italy have the highest risk of earthquakes?

Can anyone with a property in Italy claim these bonuses?

Unlike the ‘Ecobonus’ and the ‘Sismabonus’, most of these bonuses are for people who pay taxes in Italy, as they are mainly tax-deductible schemes.

Therefore, you can offset the taxes on your income if you decide to dip into these government property pots. They’re not all tax deductible, though, and some bonuses are available to residents in Italy and non-residents alike.

Here’s a breakdown of the other major building bonuses, aside from the Superbonus scheme, that you might qualify for.

Note: These are complex and subject to change, so it’s important to get professional advice before buying and renovating.

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

There are different government bonuses you could claim to renovate property. Photo: Henry & Co/Unsplash

The Renovation Bonus

The Bonus Ristrutturazioni was included in the government’s Legge di Bilancio 2021 (Budget Law 2021) once again. Continuing throughout 2021, you can apply for a 50 percent tax reduction on carrying out renovation work in both individual properties and condominiums.

You must be paying Italian income tax, known as ‘IRPEF’, to access this bonus.

There’s a maximum limit on expenses of €96,000 and the 50 percent offset to taxes is divided into annual instalments for 10 years. So that means you can deduct €48,000 over 10 years with this scheme.

There is a raft of allowances for accessing this bonus. These include making repairs on property that has been damaged, building garages or parking spaces, increasing security of the property such as installing gates, security doors and CCTV, removing asbestos and gas detection equipment.

READ ALSO: House prices in Italy rise at fastest rate in a decade

This scheme is available to taxpayers in Italy, including both residents and non-residents. Not only can the owner of the property claim the 50 percent tax deduction, but also tenants, members of cooperatives and people who make an income from partnerships and family businesses.

Condominiums can also take advantage of the bonus for work in common areas.

In a move to increase transparency of tax trails, the government included payment instructions in the Budget Law. Paying for renovation services must be recorded either through bank or postal transfers.

More details on this bonus can be found here.

You could access government funds to spruce up your garden. Photo: Elija Hail/Unsplash

The Green Bonus

The Bonus Verde was also extended in the government’s Budget Law and is available until the end of the year.

You could get state help for landscaping your garden or private outdoor areas of existing property, supplying plants and shrubs, doing work on fences, irrigation systems, building wells, roofs or roof gardens.

There’s a 36 percent tax deduction available for jobs relating to gardens, terraces and green areas in general. Like the renovation bonus, you must be a taxpayer to benefit from this one.

The tax relief applied in the tax return must be divided into 10 annual instalments of equal amounts and must not exceed a maximum expenditure equal to €5,000 for each property.

In other words, the maximum deduction you can claim comes to €1,800, as that’s 36 percent of €5,000.

READ ALSO: How and where to find your dream renovation property in Italy

The bonus can’t be used for shops or offices, but if a residential property is also used for work, you can claim half of the total tax relief available.

People living in condominiums are also eligible to apply for work carried out in communal areas.

You can’t get a cash boost for general upkeep of gardens, though. Excluded from the expenses are routine maintenance, buying gardening tools and any work that isn’t innovative – that means you have to transform a green area rather than just keep it well pruned.

Second-home owners can also claim for this one, as the bonus is available per property, not per homeowner.

More details on the Green Bonus can be found here.

READ ALSO: Italy’s building bonus: Can you really claim back the cost of renovating property?

The Furniture and Appliances Bonus

Believe it or not, there’s even some state aid on hand for buying household appliances – the Bonus Mobili e Elettrodomestici. You could claim a 50 percent tax deduction on expenses of up to a maximum €16,000, as detailed in the Italian Revenue Agency’s updated guide.

The Budget Law 2021 boosted the funds from last year’s €10,000 limit. This scheme applies to household goods of at least A+ class (A for ovens), intended to furnish a property undergoing renovation.

That means this bonus is linked to the Renovation Bonus. To be sure you can access this one, the renovation work must have begun before buying any furniture or appliances – but expenses on restoring the property don’t need to actually be paid beforehand.

Some items covered by the bonus are the following:

  • Ovens
  • Refrigerators
  • Dishwashers
  • Electric hobs
  • Washer-dryers
  • Washing machines

You qualify for this if the items you buy are for a residential property and, like the previous two bonuses mentioned, the deductions must be spread across 10 annual instalments. You must make any purchases by December 31st, 2021 to qualify for the ceiling limit of €16,000 in expenses.

READ ALSO: How will Italy’s property market change in 2021?

The Facades Bonus

Another bonus extended in this year’s Budget Law is the Bonus Facciate. This scheme allows you to deduct 90 percent of the amount incurred for renovating the exterior facades of buildings, with no maximum spending limits.

Everyone can benefit from this bonus. Again, those paying income tax can access it, as well as those holding a partita IVA (VAT number) and even tenants of rented properties. Both Italian residents and non-residents are eligible.

The Facades Bonus is available throughout 2021 and covers a vast amount of work, including restoring external surfaces of existing buildings, balconies and friezes.

You can deduct 90 percent of expenses from gross tax of either personal income tax, ‘IRPEF’ or corporate tax, known as Imposta sul Reddito Sulle Società (IRES).

You can find out more about this bonus here.

The Water Bonus aims to increase water efficiency. Photo: Jos Speetjens/Unsplash

The Water Bonus

The Bonus Idrico was also extended in the Budget Law and provides for a 50 percent discount on €1,000 of works for individuals resident in Italy and up to €5,000 for businesses.

To claim from this national purse, you’ll need to buy water-saving goods, such as toilets, showers, taps and sinks that are water efficient. It’s a bid by the government to promote lower water consumption.

The money is for the supply and installation of ceramic sanitary toilets and related drainage systems, including plumbing and masonry work and the dismantling of pre-existing systems.

How to access the bonus is yet to be defined by a decree of the Minister of the Environment and Protection of Land and Sea. For the latest on this bonus, keep an eye on this site.

READ ALSO:

Next Steps

To check whether you are eligible, speak to a professional and keep checking the Agenzia delle Entrate website before you begin any work on property.

If you’re keen to buy, you may also want to take a look at our guide to the additional costs you might not be expecting, and read up on some of the common mistakes to avoid when buying a house in Italy.

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

Five expensive mistakes to avoid when buying a house in Italy

Italy may be known for property bargains, but the purchase process itself isn't cheap - and certain mistakes can make it far more costly for buyers.

Published: 27 June 2024 11:05 CEST
Five expensive mistakes to avoid when buying a house in Italy

There’s always a lot to keep in mind when buying property, but the Italian purchase process may be quite different to what you’re used to in your home country.

As well as involving high taxes and fees, it’s likely to be more complex and formal in some ways – and this can lead to potentially costly pitfalls.

The Local spoke to three Italian property law experts at legal firm Mazzeschi to find out what foreign buyers should be aware of before they sign anything. 

1) Check your estate agent’s contract

If you use a real estate agency in your Italian home search, normally you’ll need to sign a contract with them. That contract should stipulate their fees, their duties, and their tax information.

There is one other thing in the contract which potential buyers must look out for: an exclusivity clause, meaning the potential buyer may use only that estate agent in their property search for a set period of time.

“Usually in Italy estate agents like using this exclusivity clause. It is normally the same for sellers as it is for buyers. It means you cannot have another estate agent and usually contracts say this, “says Caterina De Carolis, Lawyer at Mazzeschi.

READ ALSO: How to avoid hidden traps when buying old property in Italy

“If the time frame is not yet up, and the potential buyer uses another agency, they may still be liable to pay the agency fee for the initial estate agent they entered their contract with,” she adds.

Some contracts might not have an exclusivity clause. It’s always worth double-checking.

“If you use another agency to find a house, you’ll be liable to pay the agency with the exclusivity clause in the contract around 2-5 percent of the house’s sale price,” says De Carolis.

“The exact percentage is always in the contract.”

2) Make sure to agree on a price beforehand

This rule is universal, and may sound obvious. But there are costly consequences in Italy if the price is not formally agreed and written down.

Lawyers at consultancy firm Mazzeschi urge their clients to make sure the full price of the property is declared in the transfer deed (l’atto di trasferimento).

This is because if you resell at a market price higher than your purchase price, you are subject to pay a capital gains tax called plusvalenza. Plusvalenza is the difference between purchase and sale price.

Checking the price of the property beforehand will save you in the long run. Photo by Kirill KUDRYAVTSEV / AFP.

3) Don’t change your mind – it will cost you

If the potential buyer has signed a binding proposal (proposta vincolante) – the process before a preliminary contract is drawn up – it becomes less straightforward to withdraw from the purchase.

“This is because the binding proposal in Italy is a lot more formal,” says Mario Mazzeschi, Head of and Attorney at Law of Mazzeschi Consultancy. 

The binding proposal works similarly to an offer. When the potential buyer puts forth their offer, the potential seller decides whether or not to accept. The period of time for this part depends on the proposal drawn up.

READ MORE: Five things non-residents need to know about buying property in Italy

If, before the time is up, the potential buyer decides to withdraw their offer for any reason, they will likely lose their deposit.

“This deposit is usually around 5-10 percent in most cases, so the buyer will have to pay that,” says De Carolis.

“If the buyer decides to withdraw, they are usually liable to pay the seller twice the amount of the deposit.”

If the proposal is not accepted by the potential seller, the potential buyer pays nothing.

4) Don’t pay anything before the preliminary contract is signed

With the exception of the above, buyers are advised not to pay anything until the preliminary contract is signed. The preliminary contract allows both parties to set out clear guidelines.

“The buyer should check with a lawyer before signing the preliminary contract as it will save them in the long run,” says Mazzeschi.

A notary should be present at this signing, adds Giuditta De Ricco, Lawyer at Mazzeschi Consultancy.

“Notaries are public functionaries. They are never on the side of the buyer or the seller, but for sure a notary is needed.”

“They are completely neutral and often it is wiser and safer for the potential buyer to put their deposit into the notary’s escrow account so the notary can transfer the money to the potential buyer.” 

5) Have the property checked beforehand

While the notary will normally check the paperwork before the sale goes through, you’ll need a different professional to check the property itself.

It may then be in the buyer’s best interest to hire a contractor themselves (this will normally be a qualified geometra, or surveyor) to get the structure of the building checked out and detail any faults or repair work needed.

This should be done before the negotiation stage, as unless there is something specific in the preliminary contract you may lose anything you have paid by pulling out of the purchase at this stage.

“The only way out of this after signing a contract is if you can prove the seller acted maliciously,” says Mazzeschi.

Key vocabulary

Transfer deed – l’atto di trasferimento

Binding proposal – proposta vincolante

Notary – notaio

Preliminary contract – contratto preliminare di vendita

Final contract – atto di vendita or rogito notarile

Deposit – caparra

Surveyor – geometra

Estate agent – agente immobiliare 

Please note that The Local cannot advise on individual cases. For more information about how you can buy property in Italy, contact a qualified professional. 

SHOW COMMENTS