Under the Italian government’s bonuses scheme (“Bonus Ristrutturazioni” and “Ecobonus”) homeowners could benefit from a tax deduction of up to 50% on the expenses related to extraordinary maintenance (i.e bathroom makeover, replacement of windows, internal refurbishment including demolition and reconstruction of partitions and replacing plumbing and electrics) and up to 65% on expenses related to energy upgrades (i.e. reduction of energy needs for heating, thermal improvement of the building, installation of solar panels, replacement of winter air conditioning systems) with the obligation of improving the property’s energy efficiency by two ratings, for example from G to E.
The scheme covers apartments, detached houses, social housing and single-family homes, even within multi-family buildings. Prestigious villas and castles are excluded from the financial aid.
There is a maximum expenditure limit of Euro 96.000 for each property.
All bonuses are provided as a discount in the amount of payable income tax.
You pay for the works and you could use the tax deduction method over five or ten years, which works well if you want to offset high taxes from your income. To do this you must be an Italian resident paying income tax, known as ‘IRPEF’.
If you own a property in Italy but you don’t pay enough taxes in Italy to cover the whole contribution or you don’t have Italian residency, you can still access the Bonus.
There are two other possibilities, which are both available to non-residents:
1) In return for a commission, you can transfer the tax credit to another party, such as tax credit institutes or banks (“Cessione del Credito”).
2) You can apply for a discount on the invoice, effectively trading your tax credit to the contractors, if agreed. This means that the supplier recovers the bonus on your behalf, taking a slice of it as a fee. (“Sconto in fattura”). In this scenario, the homeowner has no dealings with the government payment.
If you do meet the criteria, though, the Bonus potentially offers huge savings and should leave you with cheaper energy bills in the long run.
Please note that the schemes are complex and subject to change, so it is important to get professional advice before buying and renovating.