Bonus fiscale or Superbonus: The new tax credit for Italian property improvements owned by internationals too.
Last year the Italian Government issued urgent legislation to assist with the recovery of the Italian economy, following the shock of the covid-19 situation.
This law named Relaunch Decree ” Decreto rilancio ” introduced new tax credits for works to improve Italian properties. We have now “Superbonus” intended to cover 110% of the costs of energy efficiency and structural sismic improvements of Italian properties, help with the recovery of the economy and in the process, ensuring tax compliance in the local building industry.
Please be aware that this few lines are not an article but just some ideas…something that you should certainly check with your techinian or realtor and professional guidance is always recommended with this issue.
“Superbonus” is an unprecedented tax break as it covers 110% of qualifying expenditures incurred between 1st July 2020 and 31st December 2021.
This tax credit can be set against tax liabilities of the relevant property owner, over five years, in five equal annual instalments. It is of interest also to foreign owners of Italian properties, firstly because it is available for Italian properties` qualifying expenses generally (whatever the country of residence of the owner) and secondly, because it is “transferable” to third parties.
“Superbonus” can be traded (Cessione del credito) by entitled property owners , effectively by selling it to third parties, or setting it against their own suppliers` invoices (Sconto in fattura) thus effectively getting the costs of the property improvements paid by the Italian Revenue. It is a substantial improvement on similar, earlier legislation.
The reason why this tax break is up to 110% of qualifying expenses is that a further 10% is added to the total qualifying expenses (100%) actually incurred, to cover the rate of discount likely to be applied if this tax credit (Superbonus) – which is split in 5 equal yearly instalments – is negotiated, sold at a discount, to a bank or other financial institution. Effectively, 2% discount for each of the 5 years of this tax credit.
Subsequent amendments to this legislation have already extended the transferability facility (both “Cessione del credito” and “Sconto in fattura”), to earlier energy efficiency and structural improvements tax credits which originally could only be set against the property owner`s personal tax liabilities.
This tax legislation is complex and still evolving. It has been amended by subsequent legislation and its interpretation is progressing with Italian Revenue circulars and regulations. There are still some gaps to be filled and no doubt new issues / gaps will arise in future, but is a real opportunity for Italian property owners.