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PROPERTY

EXPLAINED: Are any of Italy’s building ‘bonuses’ still available?

The Italian government has abruptly restricted access to its popular 'superbonus' fund. But what does this mean for Italy's many other tax rebate schemes for homeowners?

Published: 27 February 2023 17:10 CET
Updated: 4 March 2023 08:43 CET
A view shows urban construction works on the outskirts of Rome in the Corviale-Portuense district, on February 21, 2023.
A view shows urban construction works on the outskirts of Rome in the Corviale-Portuense district, on February 21, 2023. Photo by Andreas SOLARO / AFP.

If you own – or have your eye on – property in Italy, you’ll likely have seen the recent headlines about the Italian government curtailing its popular superbonus.

Introduced in May 2020 in an effort to revitalise Italy’s pandemic-hit economy, the superbonus allowed homeowners to claim back up to 110 percent of the cost of home renovations.

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

But the Italian government curbed the popular scheme with sweeping changes as of February 17th which have made it effectively unavailable to most new claimants.

Until this point, there were three ways homeowners could access the building superbonus funds: by selling tax credit to a bank (cessione del credito), getting a discount on their invoice from the construction company (sconto in fattura), or claiming a tax rebate (detrazione fiscale) spread out over four years.

As the Italian government has now ended the buying and selling of tax credits, the first two options are no longer available.

This leaves only the tax rebate option – which is only open to Italian taxpayers in the highest income tax brackets.

READ ALSO: ‘Out of control’: Why has Italy curbed its building superbonus?

A building site in Rome’s Corviale-Portuense district on February 21st. – Italy’s building superbonus has led to fraud and spiralling costs, the government said after it curbed the scheme on February 17th. (Photo by Andreas SOLARO / AFP)

While most media reports have focused on the superbonus as the highest-value scheme, it’s far from being the only one of Italy’s building ‘bonuses’ affected by this rule change.

According to the government’s decree dated February 16th, all the tax breaks mentioned in Article 121 of the original May 19th decree are affected, namely:

  • The ecobonus, that offers savings of 50 percent or 65 percent to make changes to your home that make it more energy efficient.
  • The earthquake bonus or sisma bonus, that allows property owners to claim between 50 and 80 percent of up to 96,000 euros on improvements to make buildings more earthquake-safe.
  • The renovations bonus (bonus ristrutturazione, sometimes also known as bonus casa), that allows owners to apply for a 50 percent tax reduction on renovating your property on expenses of up to 96,000 euros.
  • The solar panels bonus, which in reality isn’t its own form of tax relief but can be claimed as part of either the bonus ristrutturazione or the superbonus, and provides up to 48,000 euros in savings.

According to the financial news outlet Investire Oggi, two bonuses remain unaffected – but only because homeowners could never access the cessione del credito or sconto in fattura for these in the first place. These are:

  • The green bonus or bonus verde, which allows people to claim a 36 percent tax deduction on up to 5,000 euros to renovate their gardens and outdoor spaces.
  • The furniture and appliances bonus (bonus mobili e grandi elettrodomestici), through which owners can apply for a 50 percent reduction on up to 8,000 euros of new furniture and energy-efficient appliances in recently renovated homes.

In both these cases, the relief comes in the form of a tax rebate paid in installments over a ten-year period.

Please note that The Local cannot advise on individual cases. For more information on claiming Italy’s building bonuses, homeowners are advised to consult a qualified Italian building surveyor or independent financial advisor.

See more in our Italian property section.

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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.

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