Italy’s 110% super bonus system sparks wave of green renovations | Italy


For years, residents of Castelnuovo di Porto, a medieval village near Rome, had been putting off maintenance work on their home, from repairing the roof to cracks in the walls caused by earthquakes. land, because they couldn’t afford it. So when the Italian government said it would foot the full bill for a series of renovations, on the sole condition of making the buildings energy-efficient and earthquake-proof, they couldn’t believe their luck.

“When I first heard the government was getting all this money from the EU, I didn’t think it would affect me in the least,” said Chris Warde-Jones, a British photographer born in Italy. . “But when the people in the village started talking about renovating the houses – and there’s a lot to do here, many are showing their age – our ears perked up and we thought: wait, can we do that too? ”

Thousands of Italian and foreign owners have flocked to access Italy’s generous 110% superbonus scheme, which has so far cost the government around €21billion (£17.5billion) since its launch in July 2020 as part of the country’s post-pandemic recovery strategy.

As the name suggests, homeowners are eligible for a tax deduction of up to 110% on home improvement costs, such as the installation of insulation systems, heat pumps and panels. solar panels or the replacement of an old boiler, or the carrying out of works which reduce the risk of fire. damage caused by seismic activity.

Individuals can apply for the grant by deducting the cost of the work from their tax return over a five-year period, or defer the cost to the building contractor, who deducts it from their taxes or resells the credit to a bank. , which in turn is reimbursed by the government. The additional 10% covers bank interest.

The scheme applies to work on individual houses or buildings that contain more than one house, although in these cases permission from the other owners is required.

Warde-Jones teamed up with four co-owners to carry out several works on their 18th century tufa stone house for a total of more than €200,000, including the replacement of the roof.

“It’s been a bit of a nightmare from the perspective of organizing four different families, but we’re getting there,” Warde-Jones said. “The work hasn’t started yet, but the bureaucratic side is well under way.”

Several other EU countries have grant programs for home improvements as they work towards carbon reduction targets, but none are as generous as Italy’s. Some say the grants, the vast majority of the money from the EU’s post-Covid recovery fund, are too generous, describing the move as a ‘shock tactic’ to kick start the system in a country with a huge stock of old or poorly constructed buildings.

He certainly succeeded. As of March 1, more than 122,000 applications have been approved.

“The EU has declared that we must become a zero-emissions society by 2050, and to do this, the whole building stock, private or public, must be restructured,” said Riccardo Fraccaro, MP and senior member of the Five Star Movement. who first offered the superbonus. “It was a way to get people and businesses to do it.”

Fraccaro points to the program’s success so far, as an immediate boost to the construction sector, GDP and the creation of over 150,000 new jobs.

However, soaring demand has also pushed up the cost of construction services, although Fraccaro said the government has now capped commodity prices and left the limited supply of contractors able to carry out the work reserved to completion for at least one year. And even though the initiative prevents illegal activities because the credit can only be claimed via tax returns, the Italian tax agency has uncovered 950 million euros in fraud linked to the superbonus and other home improvement programs. at the end of last year.

“As with everything, there are always those who try to be tricky, but fraud within the superbonus was minimal, things like people creating fake yards,” Fraccaro said. “We are making the system more rigid, although it is very difficult to cheat the superbonus because there are so many requirements and technical checks before the grant is approved.”

Another problem is the time constraint – the initiative will be gradually reduced in size before it ends in 2025. However, the main question is whether the superbonus has the desired effects.

Michele Governatori, of climate and energy think tank Ecco, said the scheme was laudable and badly needed, especially with buildings in Italy consuming a huge amount of energy. “It will definitely lead to improvements, although it’s too early to tell,” he said.

His main criticism is that the subsidy allows new gas boilers, ultimately continuing to use fossil fuels. “If you replace your old boiler, adding certain efficiency parameters, with a gas boiler, you can also benefit from a tax reduction. But this is a mistake that must be corrected immediately, we must use electric heat pumps and detaching us from gas.

Fraccaro said many households have already moved away from gas and that in the long term the initiative will significantly reduce fuel dependence, especially in light of Russia’s invasion of Ukraine.

Italy is heavily dependent on gas imports from Russia and, like other European countries, is now scrambling to find alternatives.

In Castelnuovo di Porto, Sergio Iaquinta, co-founder of Aiku Srl, an alliance of architects, is working on 13 super bonus renovation projects, including the house of Warde-Jones and his neighbors. Iaquinta also benefits from the program on her own property. He said it was executed chaotically, more so at first, but thinks the chaos will be worth it.

“We’ve seen the results of insulation work before, with customers calling to say they noticed the difference right away,” he said. “And it helps raise awareness of the climate crisis and environmental needs, which is one of the most important things.”

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