17 Sep 4 renovation tax bonuses in Italy right now
We’ve received many enquiries lately about the Italy government bonuses or tax rebates (also known as the eco bonus or super eco bonus schemes) available in Italy today, to encourage renovations of Italian property. There is some confusion about what benefits are available, how you can use them to save on home renovations costs, and for how long they are available.
This post aims to introduce the current major schemes and how they work.
Purpose
The purpose of these schemes is (mainly) to encourage investment into upgrading and improving the energy-efficiency and sustainability of Italian property, by providing significant tax deductions for those who renovate.
These are the 4 schemes and below, a brief summary about each scheme today :
- Refurbishment Bonus 50%
- Eco Bonus 65%
- Façade Bonus 90%
- Eco Superbonus 110%
REFURBISHMENT BONUS 50%
This scheme is available for all types of refurbishment costs and the government provides for tax deductions of 50% of costs.
There is a maximum spend of €96,000 including VAT, however you can potentially divide your works into separate stages (or “interventi”) and apply for a 50% bonus more than once for several different renovation stages.
ECO BONUS 65%
Where your renovations reduce the energy requirements for heating the house, including replacement of heating systems and insulation; installing solar screens and panels, or new systems utilizing biomass fuels or installing micro cogenerators to replace existing plant and replacing winter airconditioning systems with hybrid appliances and new heat pumps (for example)
The available deductions normally vary from 50% to 85% and are also available for commercial purpose buildings. There is a spending limit depending on the works category, with a maximum applicable spend of €153,000 including VAT.
FACADE BONUS 90%
A tax deduction for cleaning or repairing building facades. The Italian government could reimburse 90% of relevant costs, if the building is located in the “Centro Storico” (Zone A in the Comune map) or “residenziale di completamento” (Zone B).
There is no maximum limit to this claim.
ECO SUPERBONUS 110%
Available from 2020, this bonus could be considered an expansion of the Eco bonus scheme with specific additional incentives for certain kinds of energy improvement works.
This bonus applies if your property is not classified Category A1, A8 or A9p and conforms with all Planning and Building Permissions.
Your home’s energy performance rating must also improve by at least 2 energy classes and this is required to be demonstrated (via the APE certificate). Qualifying works include thermal insulations and geothermal and photovoltaic systems, utilizing central heating and cooling and water supply appliances, and heat pump and condensing system installations as well (not an exhaustive list) – for which the expenditure attracts a deduction for 110% of such costs.
How you can claim
The scheme operates to allow tax deductions against Italian taxable income over a 10 year or 5 yr timeframe (for super ecobonus) after the expenditure is completed.
However the schemes allow owners to pass on the long term tax credit to specific intermediaries like qualified building consultants and banks, and in exchange these intermediaries can provide you with an upfront significant reduction in the cost of your associated renovations.
Time limits: These generous incentives do have time limits. For example, with respect to the 110% super bonus used for single-family homes, the expiry of the bonus is scheduled for 2022, with an extension of time allowed if your renovation works are 60% completed by June 2022. There is talk the government will extend the bonus period however at time of writing an extension has not been confirmed.
If you want to discuss more, please reach out.
Explain your project on our contact form, or email Daniel.
Daniel Shillito d.shillito@dandgpropertyadvice.com