Four tons. This is how much it cost to renovate the 16th-century tuff farmhouse on a hill in Capranica, fifty kilometers north of Rome. The holiday home with eighteen beds will include four electric heating boilers, 48 solar panels, new window frames and roof insulation.
Architect Antonio Zanca (49) climbs the scaffolding to the roof to show owner Alessandro Giampietro (30) the new insulation layer. Giampietro, who works for the green branch of Italy’s largest energy company Enel, inherited the house between the rolling orchards together with his sister from their grandparents.
His grandfather survived the Allied bombing raids on the adjacent railway viaduct during World War II, Giampietro says before following Zanca over the narrow scaffolding steps. He himself celebrated many a family celebration in the garden and oversees the hazelnut production in the orchard.
‘This insulation material is almost impossible to find anymore’, Zanca says when he arrives on the roof, pointing to a yellow layer under the historic weathered roof tiles. He saw the prices of building materials skyrocket since the introduction of the ‘super bonus 110’. “Even scaffolding is absurdly expensive.”
Room for fraud
Thanks to the policy, a large part of the bill for green renovations, which must yield at least two energy labels, will lie with the government. The previous Italian government introduced the scheme after the first lockdown, to restart the stalled construction sector.
Since then, according to daily newspaper figures, the government has Corriere della Sera 16.2 billion euros spent. The Draghi government decided to continue the policy in 2022 and is partly refinancing the construction bonus with approximately 14 billion euros from the European corona support fund.
The bonus gives homeowners the chance to deduct 110 percent of the renovation costs from their taxes. But a different route is often even cheaper. Instead of deductions, owners can also transfer the tax benefit to construction companies, who in return give large discounts (up to 100 percent) on their work. The companies can then deduct the tax credit themselves, or in turn sell it on to banks.
The scheme offers a lot of room for fraud, the Italian tax police Guardia di Finanza sees time and again. It is relatively easy to write too high invoices and get extra tax credits, although stricter controls are now being applied after many scandals.
For example, last week the tax authorities seized 110 million euros of suspicious credit in Naples. The director of the Italian tax authorities stated until November that he had discovered fraud worth 950 million in super bonus and similar construction subsidies. Critics also say that the ability to resell credit makes the super bonus a popular tool for money launderers.
Crippling bureaucracy
But in addition to abuse and high prices on the materials market, architect Zanca sees that the policy has an undesirable effect in practice: ‘Because the work is almost free and the government pays, people are now also letting people do things they would never have done otherwise. Replacing windows that are two years old, for example; waste of money and not sustainable.’
Zanca gets more and more requests from ‘super bonus customers’, but for that reason also rejects a lot. Moreover, the red tape makes the work unattractive for him: this project took him over a year to prepare, much longer than the renovation itself. It started in September and should be completed before the summer season.
And then it is still relatively simple, with one owner. In apartment buildings, the owners’ association has to meet on every decision and the bonus scheme often gets bogged down in an impasse. For Zanca, it’s reason not to renovate apartments with the bonus and not even start on it in his own house in Rome.
The government implemented a major reform last year to simplify construction bonuses, but an anti-fraud decree was also introduced in December, which in turn entails additional control steps. As in other areas in Italy, the choice here also seems to be between a paralyzing bureaucracy or a lawless jungle in which you have to accept large-scale abuse.
Energy labels
Zanca and many of his colleagues are not as enthusiastic as Vice-President Frans Timmermans of the European Commission spoke in December about the Italian construction bonus, which should contribute to the EU having no houses with an energy label G by 2030.
Don’t get him wrong: Italy is lagging behind in the field of green energy and therefore needed to catch up, Zanca agrees, while he enthusiastically shows the four electric heating boilers and points out the field where solar panels will soon be installed.
‘The idea of the super bonus is sympathetic, but the state pays too much’, says the architect, who sees fewer problems with other schemes with lower tax benefits. He is not the only one who thinks this way, because the bonus will be gradually phased out in the coming years.
Also, the fixation on energy labels does not always provide the right incentive. Take this old farm, for example, whose walls cannot be insulated due to welfare requirements. Insulation of the roof makes little sense for energy efficiency, the architect casually says, because only the uninhabited storage attic loses less heat in this way. ‘We do it so that the house rises an extra energy class according to the software.’