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PROPERTY

Italian property roundup: Best time for Americans to buy and a private island on sale

Fancy owning your very own slice of Sicilian paradise? From a private Italian island on sale to why now might be the best time for Americans to buy property in Italy, catch all the Italian property news you may have missed in The Local's weekly roundup.

Like the idea of owning your very own island in Italy? One just happens to be on sale now.
Like the idea of owning your very own island in Italy? One just happens to be on sale now. Photo by Samuel Ferrara on Unsplash

Why now might be the best time for Americans to buy property in Italy

American dollars are buying more euros than around a year ago, meaning increased Italian property purchasing power with US dollars.

Throughout 2021, the euro has steadily decreased in value against the US dollar, as can be seen in this graph. The current strength of the dollar means that you’ll need less cash to buy a property in euros than you would a year ago.

Based on today’s rate, a property in Italy selling for €100,000 would require $113,478 dollars.

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A year ago the same cost in euros would have required around $123,000 dollars. 

Even on a relatively low house price, that’s a saving of around $10,000. The margin of course gets bigger if you’re dealing with higher value properties. Going up to a property worth €300,000 would mean an extra $27,000 in your pocket in 2022, compared to last year.

If the dollar holds strong and the European Central Bank don’t raise their interest rates, now could be a real opportunity to harness the strong dollar.

A Sicilian island is on sale for €10 million

Imagine the difference in US dollars for a ticket item this big. Isola Lunga (also known as Isola Grande), the largest island in the Stagnone – the largest lagoon area in Sicily – is on the market for €10 million. (That’s around $100,000 cheaper this year compared to a year ago in dollars).

The island stretches 10km and the portion of the island for sale is 88 hectares, which is also home to some disused buildings that can be renovated.

Sicily’s blue sea. A part of that could be yours surrounding your own island. Photo by Antonio Sessa on Unsplash

The Isola Lunga Nature Reserve is a wellness paradise, full of awe-inspiring landscapes and is home to biodiverse flora and fauna.

A dirt road runs through the island, meandering through coastal forests and on one side there’s a white sand beach called ‘Tahiti’ for the beauty and transparency of its sea.

For those interested in purchasing their very own piece of Italian island paradise, the listing and photos can be seen on real estate agent Sotheby’s website.

More help for those under 36 to buy their first home

In the government’s approved Budget Law for this year, tax incentives for the ‘first home bonus’ for young people – in this instance categorised as under 36 – have been extended for the whole of 2022.

The scheme is aimed at young people hoping to get on the property ladder, which offers tax cuts and help with mortgages.

READ ALSO: Under 36? Here’s how Italy plans to help you buy a house

The idea behind the bonus is to eliminate VAT on taxes relating to deeds transfers and the mortgage on the purchase of a home, thereby helping young homebuyers secure a mortgage.

It’s worked well so far with a boom in mortgage applications from young people under 36, according to data from MutuiOnline.

First home mortgages are up 44 percent compared to 2020, with the under 36 incentive scheme reported as a driving factor in the increase.

The report found that 80.6 percent of mortgages requested by this age group in 2021 were for the purchase of their first home. In the last quarter of 2021, nine out of ten mortgages requested by young people were for first homes.

The most popular terms were those of over 25 years, increasing from 46.3 percent in 2020 to 56.6 percent in 2021.

The average amount requested by young people reached an all-time high last year, at €141,800 – as well as for mortgages with a Loan-to-Value of over 80 percent. That’s 44 percent more than in 2020.

READ ALSO: Do you have to be Italian to claim Italy’s building bonuses?

Italy has seen a boom in mortgage applications from those under 36. Photo: Jens Neumann / Pixabay

According to the figures, a young person under 36 applying for a mortgage is on average 30 years old, wants a mortgage term of around 27 years and earns €1,758.

In case you missed it

After renovation plans hung in the balance for homeowners hoping to take advantage of the government’s hugely popular superbonus 110 at the end of 2021, the Italian government has provided some relief by extending the measure into 2022.

The superbonus on single family homes has been approved for the whole of this year, as published in the Budget Law 2022 on December 30th, 2021.

Italy introduced the ‘superbonus 110‘ in May 2020 to kick-start a sluggish economy following the impacts of the pandemic and to breathe new life into the nation’s many neglected properties. It offers homeowners a tax deduction of up to 110 percent on expenses related to making energy upgrades and reducing seismic risk.

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Even though the deadlines are different depending on the property type, single unit homes can benefit from the superbonus throughout the whole of 2022.

30 percent of works must be completed by June 30th 2022 to be able to claim for the whole year, however.

If less than this amount of construction work is carried out by then, no more superbonus will be made available for that property from June until December 2022.

The news gives more time to those who’ve been stuck in queues due to builder shortages and bureaucratic delays and who potentially faced the possibility of this bonus not being continued for this category past 2021.

Other types of buildings have even more opportunity to claim the bonus. Condominiums, owners of buildings consisting of two to four units and third sector organisations will be able to take advantage of the benefit until 2025, with a sliding scale: 110 percent remains valid until 31 December 2023, dropping to 70 percent in 2024 and 65 percent in 2025.

For more information on how the superbonus applies from 2022 onwards and the new deadlines, check HERE.

And there’s a raft of other building bonuses included in the Budget Law 2022. See HERE for how else you can get help with the costs of renovating and upgrading your property.

If you have any tips, stories or thoughts on what we should include in the next edition of the property roundup, we’d love to hear from you. Email us here.

See more in The Local’s Italian property section.

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MONEY

How to get a discount on the cost of solar panels for your Italian property

Solar panels are an understandably popular choice in Italy, and if you're thinking of installing them on your own home there's funding available to help lower the cost. Here's what you need to know.

How to get a discount on the cost of solar panels for your Italian property

As utility bills rise, more home and business owners in Italy are looking at installing solar panels as a possible way to reduce costs in the long term.

Solar panels are already hugely popular in Italy, with the nation ranking top worldwide for solar-powered electricity consumption.

READ ALSO: Who can claim a discount on energy bills in Italy?

And no wonder: it’s a solid bet in a country where there is sunshine in abundance. But what about the costs of installation?

The good news is that there’s financial help available from Italy’s national government aimed at encouraging uptake of solar energy, as well as other incentives from regional authorities in many parts of the country.

It’s in the government’s interest to incentivise solar power, as Italy has vowed to transition to greener energy with its National Integrated Plan for Energy and Climate (Piano Nazionale Integrato per l’Energia e il Clima 2030 or PNIEC).

So how could this benefit you? Here’s a look at what you can claim at both a national and a regional level.

Regional funding for installing solar panels

As well as the national government subsidies available for covering the cost of solar panel installation, some regions have introduced their own bonuses or discount schemes.

The sunny southern region of Puglia and the wealthy northern region of Lombardy have seen the highest number of residential photovoltaic systems installed, according to market research.

it’s not surprising, then, that these two regions’ governments are offering cash incentives to help cover the cost of installing solar panels.

Depending on the type of system you opt for, you could expect to pay between around €5,000 and €13,000 for installation, design, labour and paperwork.

To contribute to this initial outlay, the local authority in Puglia has created a pot to help homeowners on lower incomes move towards renewable energy.

READ ALSO: What you need to know about installing solar panels on your home in Italy

Newly introduced in 2022, the so-called Reddito energetico (energy income) offers households with an annual income below €20,000 a bonus of up to €8,500 for installing photovoltaic, solar thermal or micro-wind systems in their homes.

The bonus is intended for residents who have citizenship of an EU country or, if you are a citizen of a non-EU country, you can still claim the bonus if you have been resident for at least one year in a municipality in Puglia.

The €20,000 annual income refers to a household’s ISEE – an indicator of household wealth calculated based on earnings and other factors.

A worker fixes solar panels. (Photo by Ina FASSBENDER / AFP)

For this particular scheme, if you claim this bonus from the authorities in Puglia, it precludes you from also claiming funds at national level concurrently – such as through the popular superbonus 110 home renovation fund (see below for more on this).

Although there are other government bonuses, such as the renovation bonus (bonus ristrutturazione) that offers a much higher maximum total expenditure of €96,000, it can only be claimed as a 50 percent tax deduction spread over 10 years in your tax return.

For lower income families in Puglia, this may not be as cost effective as the grant from the regional authorities, which may equate to more money towards the cost and supply of solar panels.

For more information and to apply for Puglia’s renewable energy bonus, see here.

Lombardy is also stumping up funds to continue the solar power momentum experienced in the region.

While the coffers for private properties are currently closed, the region has made funds available for those with small and medium-sized businesses – again, in a move designed to lessen the impact of rising energy costs.

Business owners can claim a 30 percent grant for the installation of solar panels. There are more funds available to cover the cost of consultancy during the process too.

For more details on applying for this energy bonus in Lombardy, see here.

Other regions have also taken the initiative with encouraging more homes and businesses to change to solar-powered energy.

The region of Tuscany is offering an incentive on installing solar panels to residents in the form of tax deductions spread out over several years.

Works permitted include installing winter and summer air conditioning and hot water systems using renewable sources. This covers heat pumps, solar panels or high-efficiency biomass boilers.

For further details and information on how to apply, see here.

Each region may have its own solar panel bonus, either in the form of grants or tax deductions, available to private residents and/or businesses.

Check your regional government’s website to find out what may be currently on offer.

Solar panels are an increasingly popular option for those renovating homes in Italy. Photo by Jeremy Bezanger on Unsplash

National subsidies for installing solar panels

If your region isn’t offering any cash incentive to install solar panels on your property, there are government funds available, which cover all 20 regions.

The authorities introduced and extended a package of building bonuses in order to galvanise the construction industry following the economic downturn caused by the pandemic.

While there is no single, separate package of incentives for installing solar panels in 2022, you can take advantage of other government bonuses that include the cost of solar panel installation and supply.

As noted, you could use the renovation bonus (bonus ristrutturazione), which amounts to a 50 percent tax deduction spread over 10 years in your tax return – or through the superbonus 110, a scheme that promises homeowners a tax deduction of up to 110% on expenses related to property renovation and making energy efficiency measures.

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The property must make at least a double jump in energy class or reach the highest efficiency rating when accessing these bonuses.

There’s a substantial amount of funds on offer to install your solar panels.

Using the renovation bonus, there is a maximum total expenditure of €96,000 (per single housing, including condominiums). Remember this amounts to a 50 percent tax deduction, so the maximum saving you would make is €48,000.

The renovation bonus has been extended until 2024 and, where solar panel installation is concerned, you can claim for the costs of labour, design, surveys and inspections, as well as VAT and stamp duty.

You must tell Italy’s energy and technology authority, ENEA, that you’ve done the works within 90 days in order to access the state aid for solar panel installation.

If you choose to use the superbonus route to claim funds for your solar panels, however, you can spread out the tax deduction costs over five years. Alternatively, you can apply for it as a discount on the invoice (sconto in fattura) or through the transfer of credit (cessione del credito).

The limit when using this bonus is €48,000, which can now be accessed for a while longer as the government extended the deadline for single family homes.

See HERE for details on how to claim it.

See more in The Local’s Italian property section.

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