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PROPERTY

House prices in Italy rise at fastest rate in a decade

Italian house prices rose by more in 2020 than they have in at least ten years, according to the latest official data, with some of the fastest growth in the south of Italy.

House prices in Italy rise at fastest rate in a decade
Could Italy's falling property prices finally be reversing? Photo: Tiziana Fabi/AFP

Italy’s house price index, which measures changes in the market price of residential properties, increased by 1.9 percent in 2020 compared to the year before, provisional figures from national statistics office Istat show.

That’s the most the index has grown since Istat began tracking it in 2010. Since then, Italian house prices have fallen in seven years out of ten.

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Growth was fastest in the south of Italy and its islands, where prices rose by 3 percent in the last three months of 2020 compared to the same period a year earlier. 

That seems to confirm reports that searches for property in the more rural south were booming amid the pandemic, as the rise of remote working drives more people to consider looking for more space in a cheaper area, or returning to southern hometowns after moving north for work.

Yet buyers don’t seem to be fleeing the cities altogether: in Milan, Italy’s densely populated economic capital, house prices grew by another 7.4 percent in the final quarter of 2020.

More broadly prices saw a smaller increase in the north-west (+1.7 percent) and north-east (+1.8 percent), but barely changed in the centre of Italy (+0.2 percent).

READ ALSO: ‘Reversed trend’: Property in southern Italy is now in demand due to the pandemic

Homes in Sicily. Photo: Giuseppe Cacace/AFP

After several years of decline, the latest growth takes Italy’s house price index roughly back to 2016 levels. Prices still remain 15 percent lower than when records began in 2010, soon after which house prices fell into a slump from which they have yet to recover.

Prices for newly built housing, which have remained far more stable over the past decade, grew by 2.1 percent over 2020 compared to the year before, its highest increase in at least eight years. 

But prices for existing homes, which have plummeted by more than 20 percent since 2010, saw the most dramatic reverse. They rose by 1.9 percent last year, the first time in at least a decade that they’ve grown by more than half a percent.

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

After an initial slump as Covid-19 first hit, sales of homes in Italy seem to have picked up sharply towards the end of 2020 as people reevaluated their living situation or looked to property as a solid investment.

As well as trends towards larger homes with outdoor spaces, forecasters have been predicting more interest in properties in need of extensive renovation after Italy introduced generous tax deductions on work to make buildings more energy efficient and earthquake resistant.

Buyers are also expected to seek out more modern, open-plan homes and broaden their search to city outskirts or rural areas, housing market experts say.

Member comments

  1. The Local has been an invaluable asset during our first 18 months as home owners in Sicily. Thanks to all who work on it.

    1. Thank you on behalf of the whole team, that’s great to hear.

      ~ Jessica at The Local

  2. Joining the chorus of thanks to all at The Local who work so hard to keep us informed. Having recently bought on an Aeolian island and having a rudimentary – at best – understanding of Italian, you guys rock! 👊🏻 THANK YOU!

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MONEY

How to get a discount on the cost of solar panels for your Italian property

Solar panels are an understandably popular choice in Italy, and if you're thinking of installing them on your own home there's funding available to help lower the cost. Here's what you need to know.

How to get a discount on the cost of solar panels for your Italian property

As utility bills rise, more home and business owners in Italy are looking at installing solar panels as a possible way to reduce costs in the long term.

Solar panels are already hugely popular in Italy, with the nation ranking top worldwide for solar-powered electricity consumption.

READ ALSO: Who can claim a discount on energy bills in Italy?

And no wonder: it’s a solid bet in a country where there is sunshine in abundance. But what about the costs of installation?

The good news is that there’s financial help available from Italy’s national government aimed at encouraging uptake of solar energy, as well as other incentives from regional authorities in many parts of the country.

It’s in the government’s interest to incentivise solar power, as Italy has vowed to transition to greener energy with its National Integrated Plan for Energy and Climate (Piano Nazionale Integrato per l’Energia e il Clima 2030 or PNIEC).

So how could this benefit you? Here’s a look at what you can claim at both a national and a regional level.

Regional funding for installing solar panels

As well as the national government subsidies available for covering the cost of solar panel installation, some regions have introduced their own bonuses or discount schemes.

The sunny southern region of Puglia and the wealthy northern region of Lombardy have seen the highest number of residential photovoltaic systems installed, according to market research.

it’s not surprising, then, that these two regions’ governments are offering cash incentives to help cover the cost of installing solar panels.

Depending on the type of system you opt for, you could expect to pay between around €5,000 and €13,000 for installation, design, labour and paperwork.

To contribute to this initial outlay, the local authority in Puglia has created a pot to help homeowners on lower incomes move towards renewable energy.

READ ALSO: What you need to know about installing solar panels on your home in Italy

Newly introduced in 2022, the so-called Reddito energetico (energy income) offers households with an annual income below €20,000 a bonus of up to €8,500 for installing photovoltaic, solar thermal or micro-wind systems in their homes.

The bonus is intended for residents who have citizenship of an EU country or, if you are a citizen of a non-EU country, you can still claim the bonus if you have been resident for at least one year in a municipality in Puglia.

The €20,000 annual income refers to a household’s ISEE – an indicator of household wealth calculated based on earnings and other factors.

A worker fixes solar panels. (Photo by Ina FASSBENDER / AFP)

For this particular scheme, if you claim this bonus from the authorities in Puglia, it precludes you from also claiming funds at national level concurrently – such as through the popular superbonus 110 home renovation fund (see below for more on this).

Although there are other government bonuses, such as the renovation bonus (bonus ristrutturazione) that offers a much higher maximum total expenditure of €96,000, it can only be claimed as a 50 percent tax deduction spread over 10 years in your tax return.

For lower income families in Puglia, this may not be as cost effective as the grant from the regional authorities, which may equate to more money towards the cost and supply of solar panels.

For more information and to apply for Puglia’s renewable energy bonus, see here.

Lombardy is also stumping up funds to continue the solar power momentum experienced in the region.

While the coffers for private properties are currently closed, the region has made funds available for those with small and medium-sized businesses – again, in a move designed to lessen the impact of rising energy costs.

Business owners can claim a 30 percent grant for the installation of solar panels. There are more funds available to cover the cost of consultancy during the process too.

For more details on applying for this energy bonus in Lombardy, see here.

Other regions have also taken the initiative with encouraging more homes and businesses to change to solar-powered energy.

The region of Tuscany is offering an incentive on installing solar panels to residents in the form of tax deductions spread out over several years.

Works permitted include installing winter and summer air conditioning and hot water systems using renewable sources. This covers heat pumps, solar panels or high-efficiency biomass boilers.

For further details and information on how to apply, see here.

Each region may have its own solar panel bonus, either in the form of grants or tax deductions, available to private residents and/or businesses.

Check your regional government’s website to find out what may be currently on offer.

Solar panels are an increasingly popular option for those renovating homes in Italy. Photo by Jeremy Bezanger on Unsplash

National subsidies for installing solar panels

If your region isn’t offering any cash incentive to install solar panels on your property, there are government funds available, which cover all 20 regions.

The authorities introduced and extended a package of building bonuses in order to galvanise the construction industry following the economic downturn caused by the pandemic.

While there is no single, separate package of incentives for installing solar panels in 2022, you can take advantage of other government bonuses that include the cost of solar panel installation and supply.

As noted, you could use the renovation bonus (bonus ristrutturazione), which amounts to a 50 percent tax deduction spread over 10 years in your tax return – or through the superbonus 110, a scheme that promises homeowners a tax deduction of up to 110% on expenses related to property renovation and making energy efficiency measures.

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The property must make at least a double jump in energy class or reach the highest efficiency rating when accessing these bonuses.

There’s a substantial amount of funds on offer to install your solar panels.

Using the renovation bonus, there is a maximum total expenditure of €96,000 (per single housing, including condominiums). Remember this amounts to a 50 percent tax deduction, so the maximum saving you would make is €48,000.

The renovation bonus has been extended until 2024 and, where solar panel installation is concerned, you can claim for the costs of labour, design, surveys and inspections, as well as VAT and stamp duty.

You must tell Italy’s energy and technology authority, ENEA, that you’ve done the works within 90 days in order to access the state aid for solar panel installation.

If you choose to use the superbonus route to claim funds for your solar panels, however, you can spread out the tax deduction costs over five years. Alternatively, you can apply for it as a discount on the invoice (sconto in fattura) or through the transfer of credit (cessione del credito).

The limit when using this bonus is €48,000, which can now be accessed for a while longer as the government extended the deadline for single family homes.

See HERE for details on how to claim it.

See more in The Local’s Italian property section.

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