Italy Reopens to Travel – Options for Immigration

Here’s How to Renovate Your Home in Italy for Free

Italy’s government is offering a 110% tax credit on certain renovation projects, which essentially means getting to improve your home for free. The so-called “Super Bonus” is available until the end of the year with a chance of it being extended.

Renovations projects eligible for the Italian tax Super Bonus include:

  • Home insulation
  • Centralized heating systems in a condominium
  • Single home heating systems
  • Seismic improvements

The credit can also be extended to the following projects if linked to the above projects:

  • Solar panels
  • Electric car charging points
  • Other energy efficiency project

Who is eligible for the Super Bonus

Anyone is eligible for the Super Bonus provided they are Italian taxpayers and the amount of tax they pay exceeds the credit they are seeking to obtain. It is not only individuals that are eligible, but also condominiums and amateur sports associations. For seismic improvements, the property must be located in a qualifying municipality.

Super Bonus Limits

According to Nicolò Bolla, our Italian tax adviser based in Parma, Italy, the maximum credit depends upon the type of work involved. In a post, he details some of these caps.

  • Insulation (external coating, floor insulation) cap is  € 50,000 per house or € 40,000 per unit inside a condominium.
  • Centralized heating systems in a condominium attracts a tax credit capped at € 20,000 per house unit as long as the condominium has eight units or fewer or € 15,000 in apartment buildings with more than eight units.
  • In home heating systems (a single unit) the tax credit is capped at € 30,000.
  • The cap on seismic structural improvements is € 96.000 per house unit underscoring both the expense and importance of such a renovation.

How is the Credit Applied

The credit is applied at 110% of the value of the expenditure up to the caps listed above. The credit can be used to offset the tax payable over the next five years.

So if you spend €30,000 upgrading your home heating system, the 100% tax credit amounts to €33,000. Spread that over five years is €6,600 per year credited against your tax.

Trading your Tax Credit

You are permitted to trade the tax credit with a third party resident in Italy. You can also trade the credit with your contractor provided the amount is credited against the payment for the work itself. The credit can be traded partially or in full.

Sworn Statement

You must obtain a sworn statement to be able to utilize the Super Bonus from both a certified accountant and a certified engineer. We advise you to speak with our Italian tax specialist. Any expenses related to obtaining the expenses can also be deducted as part of the Super Bonus (provided you have not already exceeded the cap).

Italian Tax & Property Services

Italy is an attractive place to establish your residence. The Italian government offers various tax credits to attract Retirees, Self-employed Workers, and High-Net-Worth Individuals to establish their tax residency in Italy. Read all about these tax benefits here. Our firm also works with the One Euro Home Project. Watch our expert webinar on One Euro Homes below.

Visit our Italy Practice Group Home Page for all your information about immigration to and from Italy.

This article is published for clients, friends and other interested visitors for information purposes only. The contents of the article do not constitute legal advice and do not necessarily reflect the opinions of Davies & Associates or any of its attorneys, staff or clients. External links are not an endorsement of the content.


Tax Incentives for Investing and Renting Residential Properties in Italy

By Matteo Tisato

The lure of Italy is undeniable. Stunning landscapes, historic cities, culture, design, culinary tradition. Before Covid-19 hit Italy so badly in early 2020, Rome was the country’s most popular destination with almost 27 million of visitors every year, or 6.4 percent of the total, followed by Milan and Venice (both 2.8 percent), and Florence (2.4 percent).

However, in the recent years, Italy has become an excellent place attracting not only tourists but international investors as well, who are finding always more opportunities and great deals even on tax regimes.

Today we dig into the international real estate business and want to share something that most potential investors in the real estate market do not know: A 10% flat rate for incomes coming from renting out residential properties. 

A 10% flat rate for incomes coming from renting out residential properties. 

If in most cases a rate of 21% is applied to these incomes, for lease contracts that meet certain requirements it is possible to qualify for a 10% flat fee, which is certainly more convenient for the investors/owners. Here are the main criteria to qualify for this special taxation regime:

  • Firstly, the residential lease must be in the form of 3 plus 2 years, or Interim contracts (up to 18 months) or student contracts (up to 36 months).
  • Secondly, the 10% flat rate applies only to leases for which the maximum amount is not freely established by the parties but is determined in accordance with agreements made by the local authorities and the most representative tenant organizations.
  • Thirdly, the 10% flat rate applies exclusively to homes located in specific areas, including the biggest cities such as Bari, Bologna, Catania, Florence, Genova, Milan, Naples, Palermo, Rome, Turin, and Venice. Buying a property in these cities may also include further reductions on IMU, which is the Italian property tax.

International investors are always more interested in investing in the Italian real estate by taking advantage of the above tax regime. In addition, house expenses are usually paid by the tenant, and these include water-sewer taxes, condominium taxes, gas, electricity, Internet/Wifi, and Tv/cable tax.

In addition to reduced rental taxes, Italy offers a range of tax benefits to attract foreign workers and retirees. This includes a generous time-limited reduction on income tax for workers who move their tax residency to Italy. As well as a 7% flat tax on overseas pensions for retirees who switch their tax residency to Italy. Conditions apply.

Italy also attracts high-net-worth-individuals (HNWIs) through a €100,000 flat tax for up to 15 years. This has proved popular with 784 people taking up this offer over the past three years. The majority of HNWI applicants (10%) are from the United Kingdom, where Brexit uncertainty coupled with Italy’s generous tax provisions, have spurred people to act.

For anyone interested in moving to Italy, there are a range of options available. Including the investor visa – for which the Italian government has just reduced the investment amounts; the elective residency visa – for which you need to prove annual stable income in excess of €32,000; the European Blue Card – for highly-skilled individuals; and naturalization by proving Italian ancestry.

Learn more in our podcast.

Contact Us to discuss your case.

This article is published for clients, friends and other interested visitors for information purposes only. The contents of the article do not constitute legal advice and do not necessarily reflect the opinions of Davies & Associates or any of its attorneys, staff or clients. External links are not an endorsement of the content.