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QUALITY OF LIFE

Cost of living: How does Italy compare to the rest of the world in 2022?

Italy has recorded lower costs of living than the UK and US so far for 2022 after outstripping both last year. Here's a closer look at how everyday outgoings compare.

How Italy stacks up for cost of living compared to the rest of the world.
How Italy stacks up for cost of living compared to the rest of the world. Photo by MARCO BERTORELLO / AFP

It’s a common belief that the cost of living in Italy is generally cheap and cheerful, and this is often thought to explain the nation’s comparatively low wages.

However, Italy in fact outpaced both the UK and the US for living expenses last year, ranking as the 26th most expensive country in the world.

Good news for those living in or travelling to Italy this year, though – the latest figures for 2022 show that Italy has now slid down the scale, behind the UK and US, coming 32nd in the global ranking, according to Numbeo’s Cost of Living Index for 2022.

It is classified as being cheaper than France (19th), the UK (26th), the US (27th), and the famously expensive Switzerland – which was ranked second most expensive in the world for the second year running. And once again, Bermuda placed first.

The survey was compiled using the notoriously expensive city of New York City as a benchmark. New York was given an index score of 100. So a country with a score higher than 100 is more expensive than New York, while below signals that it is cheaper.

READ ALSO: The parts of Italy where house prices keep rising despite the pandemic

Italy scored 66.47 overall. It has got cheaper for groceries, dropping four places in the global scale and is now around 12 percentage points cheaper than the US, but is still more expensive than the UK.

While people in Italy have seen energy prices surge in January, with a knock-on effect on food prices and other costs, the same has also happened in many other countries.

Italy ranks 34th for a food shop compared to 36th place for the Brits. But it is cheaper than the US (19th), Canada (20th) and Australia (9th).

Compared to its European neighbours, you’ll pay more at the till for your weekly groceries in France (16th), Denmark (22nd) and Austria (26th). On the other hand, Italy is more expensive than Germany (41st) and Spain (54th) for supplies to stock your fridge.

In a separate recent survey specifically focussed on this aspect of living costs, Italy was in fact much higher up the scale for the cost and affordability of a grocery shop.

The findings from Net Credit are based on not just supermarket prices, but they also consider income. Researchers calculated the affordability of a basket of goods in each country as a percentage of the average daily wage.

Italy’s groceries can be expensive when you factor in the average salary. Photo by Axel Heimken / AFP

The shopping basket they surveyed focused on ten staples including breakfast cereal, eggs, cheese, milk and bread.

Factoring this in, Italy ranked 15th most expensive worldwide for the cost of groceries, calculated as being 33 percent of a daily salary.

Common expenditure prices in Italy

  • Milk – €1,15
  • Loaf of fresh white bread – €1,56
  • Local cheese (1kg) – €12,24
  • Beef (1kg) – €14,68
  • Bottle of wine (mid-range) – €5,00
  • Domestic Beer (0.5 litre draught) – €4,50
  • Meal per person at low-cost restaurant – €15,00
  • Three-course meal for 2, mid-range restaurant – €55,00
  • Monthly pass on public transport – €35,00
  • Petrol (per litre) – €1,62
  • Basic utilities (Electricity, gas, water, rubbish) for 85m2 Apartment – €162,79
  • Apartment rent (1 bedroom) in city centre – €588,95
  • Apartment rent (1 bedroom) outside of centre – €449,53
  • Price per square metre to buy an apartment in city centre – €3,092.74

Numbeo’s Cost of Living index, weighs up average estimates for expenses for a four-person family, ranging from clothing, groceries and dining out to transportation, recreational activities and utilities.

And its rent index is based on the costs of renting one- and three-bedroom apartments in and outside of city centres.

For this category, Italy ranked 44th out of 139 entries in total worldwide, compared to 37th last year. It again comes behind Spain, the UK, the US and Canada.

READ ALSO: The ten positives you’ll notice after moving to Italy from the US

Italy was found to be eleven points cheaper than the UK on average compared to eight points last year, and over 20 points cheaper than the US when it comes to rental accommodation.

Photo: Jürgen Scheeff on Unsplash

Restaurant bills – which were found to be higher on average in Italy than France, Germany, the US and the UK last year – have become relatively cheaper in 2022. Italy recorded around six percentage points lower than the UK for dining out, whereas it’s now about the same compared to the US.

It is still much more expensive than Spain, coming in at around 17 points more costly for eating out.

According to Numbeo’s country profile, the average Italian monthly salary after tax is €1,443.39 compared to $3,596.78 (€3,176.10) in the United States and £2,011.40 (€2,400) in the UK.

While salaries are lower in Italy and many living costs don’t differ greatly between Italy, the UK and the US, you can at least bank on a cheaper cappuccino in Italy.

On average, it will set you back €1.40 in Italy, compared to €3.87 in the US and €3.34 in the UK.

These three countries don’t differ that much for a three-course meal for two in a mid-range restaurant, costing between €53 and €59.

Certain produce is more expensive in Italy such as local cheese and meat, but it costs less to use public transport overall.

Monthly utility bills were recorded as being higher in Italy than the US, but not the UK.

READ ALSO: Rising energy prices: How to save money on your bills in Italy

Meanwhile, average private monthly childcare costs in Italy are cheaper compared to the UK and US, based on one child attending full-time.

In its Cost of Living City index for 2022, Milan has ranked the highest for Italian cities coming in at 117th place out of 578 cities worldwide. It’s followed by Parma (148th) and Genoa (149th). Rome came 177th.

Parma recently came first in the country in a survey on the best and worst places to live in Italy. It took the title for its healthcare, work and business opportunities, level of environmental protection, life satisfaction levels and how it managed the Covid-19 pandemic.

READ ALSO: The very best Italian towns to move to – according to people who live in them

Previous European studies have shown the cost of groceries, eating out, internet and communications to be relatively high in Italy.

Within Italy itself, there can be huge regional differences. Broadly speaking, the north of Italy tends to be more expensive than the south, and cities pricier than rural areas.

Milan is notorious for high rents, as are tourist hotspots including central Florence and Venice – and generally speaking people living in these areas will face higher costs for most goods and services.

But average recorded prices are brought down by the fact that it is relatively cheap to rent in small towns and villages, while the cost of services can also be markedly lower outside the major Italian cities.

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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.

READ ALSO:

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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