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PROPERTY

How Italy’s building bonus uncertainty is causing headaches for homeowners

Homeowners face being left with unfinished properties or high construction bills if Italy's building 'superbonus' isn't extended in the new budget as hoped.

Published: 9 November 2021 17:36 CET
Italy's superbonus is facing delays and deadlines, leaving many homeowners worried about their building projects.
Italy's superbonus is facing delays and deadlines, leaving many homeowners worried about their building projects. Photo by Anastasiia Krutota on Unsplash

After Italian authorities gave the green light to next year’s Budget Law at the end of last month, many homeowners carrying out renovations didn’t get the news they were hoping for.

The plans aren’t favourable for those with single family homes, as Italy decided to extend the superbonus only for condominiums until 2023, meaning there isn’t as much time to move through construction projects.

EXPLAINED: How Italy’s proposed new budget could affect you

As things stand, based on the manovra – or financial measures – set out by the government, there are just eight months left to access the superbonus for those with a single family home.

It spells a timeframe potentially too short for many waiting for their building project to get off the ground or those stuck in a backlog caused by high demand for construction companies.

‘No house and all the bills’

Many homeowners have already successfully accessed the bonus, with the government approving over 9 billion euros of investments.

But we count among those waiting tensely for news. Solely on the basis of the superbonus, my husband and I bought a wreck in the northern region of Emilia Romagna in May.

After months of searching and waiting for the sale to go through, once we finally had the deed in our hands we thought we’d be able to move through the process and start on the demolition and build of our new home.

House renovation in Italy using the superbonus.
Photo by Avel Chuklanov on Unsplash

Yet, seven months later, the original and unliveable old farmhouse is still standing in its crumbling glory while we grow ever more anxious for works to start – and potentially finish – in time.

For us, this would be our primary residence, our only home. We have both borrowed money and also sunk every penny we’ve ever had to our names and saved up over the years to afford it.

READ ALSO:

The superbonus was an opportunity too good to miss, as we would never have been able to undertake a project like this without it.

But if we are left stranded halfway through, we will be left with an old building not fit to live in and nowhere else to call home as we have sold our current apartment – at a loss too.

Soon enough, we’ll be living in a trailer on site and all we can do is cross our fingers that we’ll have a real roof over our heads soon.

Italian property.
Photo: Mattia Bericchia on Unsplash

We’re not the only ones fast in the superbonus quagmire. Paul Bains who lives in Sicily almost embarked on the same idea – a full demolition and rebuild – on the house where he resides, but he was worried that it would be “a disaster” and scrapped the plan.

Echoing our fears, he said, “We would have run out of time and I would have ended up with no house and all the bills.”

A shortage of building professionals

Paul still wanted to access the government coffers to upgrade his property without knocking it down in any case. After initially discussing ideas in September and October 2020, an architect eventually came to visit his home in January 2021 to make assessments.

Months passed and on asking for progress, Paul was told that they’ll need another architect after being unable to reach the first one.

READ ALSO: Italy’s ‘superbonus’ renovations delayed by builder shortages and bureaucracy

By July, the builder he had been liaising with also “disappeared”.

He said that he feels like he has lost a year by waiting and asking around for other contacts, but so far is stuck and unable to move forward.

“In some ways I’m just resigned to it,” he said, nodding to the culture of bureaucracy which he described as slow in rural Sicily.

“In some ways I just accept it as perhaps a good thing and move on,” he added.

Bureaucracy is causing delays to accessing Italy's superbonus.
Photo by Julia Solonina on Unsplash

Using the superbonus on a second home

Not everyone is experiencing the same frustration and worry.

Roger Hampton is a British citizen living in Norway and his renovation project is underway on a second home in Italy.

He and his family found the holiday home of their dreams in Ancona, in the Marche region.

Despite breaking one of the biggest rules of house buying in Italy – buying the property unseen – they are successfully progressing through their building plans, blogging the developments as they go.

READ ALSO:

“I first read about the superbonus when it came out and then changed my property search, as I realised there was more we could do than we could initially afford,” he said.

“Without the superbonus we couldn’t have done this,” he added.

Due to the various lockdowns, he couldn’t travel from Norway to view properties, so his engineer did it on his behalf and just sent photos and videos. It worked out and now they are embarking on a full demolition and rebuild in the end, as the foundations were too weak to stay in place.

Despite only having visited Italy twice this year, his second home project is moving at a pace.

As an architect by trade, Roger admitted he found the process less stressful than most as he understood a lot of the jargon and the protocol. Regardless, accessing the bonus and progressing through construction from a distance is an achievement.

He met a technician last September who used his contacts to get the appropriate contractors for construction.

READ ALSO:

For us, this is currently the greatest stumbling block as there’s high demand for thermal technicians (termotecnici) and we cannot move forward without this key contact.

In fact, we have found a construction company to knock down the wreck and build our new home, but without the final approval from technicians, we are at an impasse.

Other home renovators I spoke to said they are having the same issues with appointing these particular professionals.

Soberingly, one told me that it took a year to start works after buying the property. In our case, that would definitely be too late to claim the superbonus under the current rules.

One reader of The Local contacted us to say that they also had this experience, saying, “Getting knowledgeable professionals has been a real struggle.”

In their case, they are moving within the same comune (municipality) and it will be their primary residence. They actually didn’t intend to use the superbonus initially, as they began their project before it was introduced.

However, due to the difficulties of finding the right professionals, time has rolled on and they can now benefit from more government aid than they originally thought.

“The whole thing has been hard but we stand to gain so much if it works out for us, it’s well worth it,” they said.

It’s a positive sentiment that Roger expressed too. “It’s a case of having the patience and it’ll work out,” he said.

For those who are jittery and restless, they might not be far off the mark with such optimism.

The budget proposals indicated a change in the superbonus to cover only those single family homeowners with an ISEE (the social-economic indicator of household wealth) of 25,000 euros maximum for the whole of 2022.

If you don’t fall into this category, the deadline of June 30th 2022 applies.

READ ALSO: Building superbonus: Italy’s draft budget leaves homeowners in limbo

However, some respite is still possible as the Budget Law has not yet been examined by parliament and has so far not been made into law.

At this point, amendments are being made and pressure is mounting to remove the income ceiling and to scrap the shorter deadline for single family homes.

“We are fine-tuning amendments to remove references to ISEE ceilings as a requirement for continuing to benefit from the superbonus on single- and multi-family houses,” Agostino Santillo, vice-president of the Five Star Movement party is reported to have said in a Senate meeting.

He criticised the measure as “discrimination”, saying his party have “put an alternative option on the table that does not create obstacles”.

The government launched the so-called ‘superbonus 110‘ back in May 2020, one of a raft of measures aimed at boosting the Covid-hit economy. It offers homeowners large tax deductions on expenses related to energy upgrades and reducing seismic risk.

Property owners have been petitioning to extend the bonus for the same amount as planned for condominiums, with some arguing that those with single or multi family homes shouldn’t be excluded or labelled “houses of the rich”.

Reports suggest that news on who can access the superbonus and for how long are expected this week.

All proposed measures and extensions to come into force from next year are yet to be converted into law and are still subject to change.

See more in The Local’s Italian property section.

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PROPERTY

Five pitfalls to watch out for when buying an old house in Italy

Tempted to snap up a little slice of Italy at a bargain price? The older the house, the more potential issues you'll need to be aware of.

Published: 29 March 2024 10:17 CET
Updated: 29 March 2024 12:03 CET
Five pitfalls to watch out for when buying an old house in Italy

Italians themselves may have very little interest in buying or fixing up Italy’s many unwanted old houses, but international visitors are often swept away by the charm of these rustic buildings in romantic settings.

It’s easy to see why. The quirky structures, period details, and picturesque surroundings – not to mention low asking prices – inspire countless people worldwide every year to investigate buying an Italian home of their own, often as an investment or retirement property.

MAP: Where in Italy can you buy homes for one euro?

International interest in cheap Italian property has only intensified in recent years, with dozens of idyllic villages advertising ‘one euro’ homes and other low-cost property offers aimed specifically at foreigners.

Savvy buyers are aware that non è tutto oro quel che luccica (all that glitters is not gold), and quickly realise that these long-neglected buildings really cost somewhat more than one euro to buy and renovate. Still, some of The Local’s readers tell us these offers are worth taking advantage of.

But whether you’re looking at spending a couple of thousand euros or much more on your dream Italian property, there’s always a lot to consider – including some issues that you’re unlikely to experience when buying a home in your home country.

These unexpected issues can turn the Italian dream into a bit of a nightmare, and sometimes lead to buyers having to abandon a purchase, losing money in the process.

But if you’re aware of potential pitfalls in advance, you’re far more likely to be able to complete the purchase process with no major problems at all.

Property taxes and fees

Of course you’ll be expecting tax as part of the property purchase process, but Italian property taxes are particularly steep.

Experts say the total cost of buying in Italy will add approximately ten percent to the purchase price, and advise prospective buyers to budget accordingly.

There’s stamp duty, which is between two and nine percent of the cadastral value (valore catastale) of the property, with a minimum threshold of €1,000 even on the cheapest homes. Plus VAT at four or ten percent, land registry tax, and, if applicable, mortgage tax.

You can also expect to pay between one and five percent of the purchase price as a fee to the estate agent. In Italy agents work for both the buyer and seller – and collect compensation from both parties once the deal is done.

Then you’ll likely need a couple of thousand euros for the notary, plus a similar fee for any other agents you use, such as a mortgage broker, plus legal fees if a lawyer is involved.

See more about the ‘hidden’ costs of buying property as a foreigner in Italy.

Bickering relatives

It may sound unbelievable to non-Italians, but it’s not unusual to find that even the smallest old properties, or parts of them, are legally divided up between dozens of family members due to Italy’s inheritance rules.

One buyer The Local spoke to found herself having to deal with 22 people, all relatives, who each turned out to own a share of a small property she was buying in Mussomeli, Sicily; one of the first places in the country to sell off old properties for a euro.

Toti Nigrelli, the mayor of Mussomeli, said “having to negotiate the sale with multiple owners” was normal.

While this buyer impressively managed to negotiate the deal with all 22 parties, in many cases similar sales fall through because relatives – distant cousins, great-aunts, long-lost nephews – are often not on good terms, disagree over the sale, or can’t be traced.

At the very least, you will need to check the property’s records carefully to make sure there are no surprises in store – such as long-lost relatives who might turn up to claim the property back after you’ve bought it.

A trullo house before renovation in Cisternino, Puglia. AFP PHOTO / GIUSEPPE CACACE

Illegal builds

Another thing that often astounds foreigners who buy property in Italy is the enormous number of illegal builds – homes that were built entirely without permits – on the market as well as the even greater number of houses featuring modifications which were never officially approved or recorded.

Illegal housebuilding in Italy is often thought of as a decades-old issue, but recent data shows that, in 2021, 15 houses were built illegally for ever 100 authorised. Illegal building is twice as common in the south of the country as in the north, and thousands of cases are detected every year – though few people are ever prosecuted.

If you buy a house with undeclared modifications, the buyer is usually held responsible for paying to regularise the paperwork with the town hall. If you catch this issue early enough – and not all sellers or estate agents will inform you about them – you may be able to negotiate for the seller to cover these costs before you make an agreement.

If however you end up unknowingly buying a house built without the correct permissions, or if you never regularise any unauthorised changes, the property will likely prove very difficult to sell on.

This is one of many reasons why buyers need to carefully check the catasto (land registry or cadastral records) of a property themselves, and have a notary check everything is in order.

Conservation rules

When you initially view and fall in love with that charming stone house in the historic centre of a gorgeous Italian hilltop town, rules and regulations are probably not the first thing on your mind.

But it pays to know that old homes featuring frescoes, loggias or ancient stone cellars, as appealing as they are, are often protected by Italy’s cultural heritage authority – meaning more red tape for their owners.

One reader was forced to give up her dream of buying a portion of a two-floor 1700s building in the village of Civita Castellana, Lazio, because it needed renovation work to make it livable – but the frescoed walls, decorated fireplaces and elegant stonework entrance were vincolati (under restrictions) due to Italy’s historic conservation rules.

READ ALSO: Tuscany or Basilicata? How Italy’s international property market is changing

In many cases, this means renovation work can’t be carried out at all, or will be subject to reams of paperwork and close monitoring from authorities known as the sovraintendenza belle arti. To make things trickier, rules can also vary by local authority.

If you think a property you’re interested in might be subject to these rules, it’s always wise to consult the local sovraintendenza at an early stage. And of course, you’ll want to get hold of the records of the property from the catasto (land registry).

Resale prices

The high taxes and costs involved in buying and selling a property in Italy are often said to be one reason why, for most Italians, the concept of climbing the property ladder doesn’t really exist in the way it does in some countries.

Italy’s property market is unusual in Europe in that house prices on average are relatively stagnant. With the exception of some types of property – such as new-build apartments and luxury homes – overall prices have risen little over the past decade.

This is partly because the Italian market is weighed down by a large volume of old, neglected properties in need of major work – hence schemes like the one-euro sales and the (formerly popular but now-unavailable) 110 percent ‘superbonus’ for renovations.

But overall, if your main motivation for buying an old Italian home and renovating it is profit, you’ll need to consider that the resale potential may not be what you’d hope. The exceptions to this are at the pricier end of the market, in most major city centres, and in tourist hotspots.

See more in The Local’s Italian property section.

Do you have any more tips on buying a property in Italy? We’d love to hear from you in the comments section below.

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