Read news from:
Austria
SHARE
COPY LINK

ECONOMY

Italy’s building firms warn of bankruptcy risk after superbonus changes

Construction companies on Monday raised fears of widespread bankruptcies and job losses after the government unexpectedly curbed Italy's popular building superbonus scheme.

Published: 20 February 2023 17:20 CET
Italy's building firms warn of bankruptcy risk after superbonus changes
Italy's government abruptly curbed the use of the building superbonus leaving building companies unsure of what the future holds. (Photo by CHRISTOF STACHE / AFP)

Prime Minister Giorgia Meloni’s government held talks on Monday with business associations representing the construction sector over fears that sudden changes made to the building ‘superbonus’ scheme would close businesses and put thousands of people out of work.

The Italian government on Thursday pushed through a hastily-approved amendment to the superbonus scheme which closed off two of the three routes to claiming the funds, making it inaccessible to most people.

READ ALSO: How Italy has changed its building superbonus – again

The government said the change was needed due to a long-running credit transfer impasse that has been blocking the bonus claims process for over a year.

It also said the superbonus, which was introduced by a previous government more than two years ago, was too costly, susceptible to fraud, and had inflated the cost of building work.

But construction industry representatives said the sudden changes had been made with no warning and no indication of how ongoing projects would now be funded in order to keep businesses afloat. 

“Nobody warned us. Yet we had been in daily contact with the Economy Ministry for some time to find a solution to the blocked credit issue,” Federica Brancaccio, president of national builders’ association Ance, told newspaper Il Messaggero.

“These impromptu changes to building bonuses, one every forty-five days, are useless. We need a structural, long-term proposal that the government deems sustainable,” she said.

Some 25,000 construction companies are now in danger of running out of liquidity and going bankrupt, she said.

Ministers said on Monday they’re now considering various options including using the government bank, Cassa Depositi e Prestiti, to fill gaps in financing that could see many construction firms facing bankruptcy, reported news agency Ansa.

READ ALSO: EXPLAINED: Has Italy’s ‘superbonus 110’ been scrapped?

Under the new rules, as of February 17th it’s no longer possible for homeowners to claim the rebate via a construction company and receive a discount on the final invoice (known as sconto in fattura), nor to sell tax credit to a bank in exchange for cash (cessione del credito) in order to access superbonus funds.

This leaves just one option: claiming the bonus in the form of tax deductions spread over four years (detrazione fiscale), an option which is only available to those who pay higher rates of income tax (Irpef). 

This effectively means the superbonus is now only open to the highest-earning Italian taxpayers.

The latest move came after changes brought in at the end of 2022 drastically reduced the number of people who would be eligible to claim, and slashed the maximum rebate from 110 percent of the total cost of works to 90 percent.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

TAXES

IMU: Who has to pay Italy’s property tax?

The first instalment of Italy’s main property tax IMU is due by Monday, June 17th, this year – but not all homeowners in the country have to pay it.

Published: 14 June 2024 12:24 CEST
IMU: Who has to pay Italy’s property tax?

Italy’s main property tax, IMU (Imposta Municipale Unica, or Unified Municipal Tax) was introduced in 2012 to replace the local ICI levy.

It applies to both private and commercial property, building areas and agricultural land, and its exact amount varies by the type, value and location of the property.

IMU must be paid in two yearly instalments, with the first payment normally due by June 16th (the deadline was moved to June 17th this year as June 16th is a Sunday) and the second one due by December 16th. 

But the tax is a frequent source of confusion for homeowners in Italy as the rules on exactly which types of property it applies to have changed multiple times over the years.

Taxpayers are fully responsible for calculating and paying the amount of IMU they owe, meaning you won’t get a bill from local authorities specifying how much you need to pay for the relevant year.

Who does IMU apply to?

IMU is generally owed by owners of the following types of property:

  • Agricultural land (or terreno agricolo in Italian)
  • Building land (area fabbricabile)
  • Private houses other than the owner’s main residence (or prima casa), meaning second, third, fourth homes etc.
  • Luxury dwellings (case di lusso) falling under Italy’s cadastral categories A1 (stately homes), A8 (villas) or A9 (castles), regardless of whether they are the owner’s main residence or not.

Essentially, besides agricultural and building land owners, IMU is owed by all second-home owners in the country and owners of properties categorised as ‘luxury’ under Italy’s cadastral system.

READ ALSO: The Italian tax calendar for 2024: Which taxes are due when?

The tax doesn’t apply to main residences (prime case) but owners must be Italian residents and be registered as such under Italy’s national registry (Anagrafe) in order to qualify for this.

If you’re a foreign resident owning property in the country, you’ll have to pay IMU on it.

There are a number of IMU exemptions and discounts available to some categories of homeowners. 

These include for instance a 50-percent discount for retirees residing abroad and claiming a ‘totalised pension’ (pensione totalizzata), meaning a hybrid ‘Italian-foreign’ pension merging contributions made in Italy and those made in the foreign nation they reside in (as long as this country has pension totalisation agreements in place with Italy).

How do I calculate IMU?

Much like most other Italian taxes, calculating IMU is by no means an easy process, especially if you have little to no experience with paying it. 

That’s why it’s generally advisable to consult a chartered accountant (commercialista) who can ensure that the correct amount is paid and even arrange the transaction for you.

READ ALSO: What is an Italian commercialista and do you really need one?

That said, as a rough guide, you’ll need to take the cadastral value, or valore catastale, of your property (this is generally reported in the public deed of purchase but you can also request it at your local land registry).

Once you know the cadastral value, you must increase it by 5 percent and then multiply that number by a coefficient, which varies by the type of property you own. For instance, private residential buildings and flats have a coefficient of 160. 

Doing this will give you your property’s taxable base and from there you’ll be charged anything from 0.5 to 1.06 percent of that figure, depending on the rate (aliquota) applied by the municipality (comune) where your property is located.

How do I pay?

IMU can be paid via Italy’s standard tax form F24, which is used when paying most types of taxes in Italy, including Irpef income tax instalments.

The form can generally be found and submitted at most bank branches and post offices in the country. Some Italian banks even offer customers the option to complete and submit an F24 form directly online.

Alternatively, you can ask an Italian accountant to complete and submit the form on your behalf.

What happens if I don’t pay?

The Italian taxman shows little in the way of leniency when it comes to late filing or failure to pay IMU. 

Late filing can be punished with a fine of up to 30 percent of the IMU owed, whereas failure to pay can lead to enforced credit recovery procedures (recupero coattivo del credito) from local authorities. 

The good news here is that Italy has a procedure known as ravvedimento operoso (literally ‘active amendment’) which allows taxpayers to self-report and quickly rectify the delay in their IMU payments in exchange for significantly reduced fines.

For example, under this system, fines for late payment are reduced to 0.1 percent of the sum owed per day if the payment is made within the first 14 days from the relevant deadline.

Please note that The Local is unable to advise on individual cases. Find more information on the Italian tax office’s website or seek independent advice from a qualified tax professional.

For more information on property in Italy, check The Local’s property section.

SHOW COMMENTS