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Compliance and precautions: key factors for Superbonus

Alessandro Dragonetti
Bonus 110%
The tax allowance provided for energy and aseismic improvements can benefit private individuals, companies, and banks, but provided that some specific conditions and criteria be met, including the following.

First of all, the urbanistic compliance of buildings, as well as an attention to contractual details. Private individuals, companies, and banks can all benefit from the “110% Superbonus” provided under art. 119 under Law Decree no. 34/2020 (turned into Law no. 77/2020). However, in order to access the benefit, it is important that the parties involved correctly follow some important steps.

In fact, the regulation has introduced some tax allowances by specifically providing a tax deduction of costs incurred for specific energy and aseismic interventions up to 110%.


Interests of private individuals, companies, and banks

The provision, known as “110% Superbonus”, has been drawing the attention of private individuals, including residential buildings administrations, of construction companies, and of banks. In fact, in this very critical phase of the economy, private individuals are attracted by the idea of modernizing, at a minimal cost, their own property (a fundamental asset for most Italian households). This would counterbalance the decreased real estate prices over the last period.

Companies are attracted by the possibility to win contract works given the difficult moment that we are currently going through. The particular mechanism provided by the regulation allows companies to consider these contracts as low credit risk works.
Lastly, banks are interested in Superbonus for two reasons: firstly, the purchase of credit that has generated due to the effect of the superbonus and, secondly, for the issue of loans necessary to complete the relevant construction works.

Critical aspects

In light of the above, there are still some aspects that need to be carefully evaluated and managed by each of the three parties mentioned above. In fact, private individuals need to be careful both to the urbanistic features of property which the bonus will be applied for, and to the aspects concerning the relevant taxation consequences for them.

With reference to the first aspect, the non-compliance of property with the urbanistic requirements could have a devastating impact on the process, since – in some cases – it would determine the lapse of the right to benefit from the tax allowance. Moreover, an incorrect management of the urbanistic aspect could prejudice the right to access the bonus due to failure to meet one of the fundamental required conditions (e.g. failure improve and increase the building’s energy efficiency classification as required in case of interventions for insulating cladding).

As concerns taxation issues, it is important for private individuals to assess their own income capacity to absorb (in terms of generated tax) receivables deriving from the utilization of the Superbonus. In fact, there are several variables that impact on this condition (first of all, the forecast on future income). Moreover, it is necessary to adopt proper contractual precautions when defining the agreements with a contractor in case works are not only aimed at qualifying interventions pursuant to the regulation (e.g. if interventions that are primarily required to benefit from the Superbonus are carried out in combination with “secondary” interventions).

Quite common are actually the cases in which, together with the realisation of qualifying interventions pursuant to the regulation on the 110% Superbonus, the principal (private individual and/or condominium) also decides to carry out other works not falling within the scope of the norm. In this case, it is necessary to make a clear distinction, also upon invoicing and paying the relevant considerations, among the single works (possibly included, for contractual and/or administrative reasons, in a sole building contract).

This distinction should also be made as concerns the precise allocation of ancillary expenses referred to the two categories of works (included and excluded from the bonus), so as to allow a specific identification in case of a subsequent assessment, avoiding the risk of future challenges. Thus the need to pay the maximum attention to managing (contractual) relationships with professionals providing technical assistance to the client.

For businesses, the most critical aspect is the financing of works, in case the client opts for the assignment of the credit deriving from the obtainment of the Superbonus. Actually, as contractors cannot obtain compensation from their suppliers, they have two choices: either refuse the engagement or raise finance. In this latter case, although the banks are supporting businesses, these would have to manage a particularly complex situation, both as concerns its scale and objective difficulty.

As a final note, banks are also facing difficult situations as concerns those phases of the process in which they are involved. Besides issuing loans (a consolidated, core activity), should they decide to purchase credits originating from the invoicing of eligible works, they would have to monitor the various fulfilments required by the regulation for all the duration of the works (such as the authorisation process, the works progress report, the payment of the considerations, the termination of works and the subsequent attainment of the energy improvements qualifying for the obtainment of the bonus, etc.).

These activities require an ongoing and specific monitoring of the fulfilments related to each engagement, which should therefore be examined beforehand to identify the existence of the theoretical prerequisites for the granting of the bonus.

Besides being cumbersome from an administrative point of view, the above also requires an adequate IT support, sometimes further complicated by the need to deal with the platforms of the various service providers involved in the project.

by Alessandro Dragonetti - Managing Partner and Head of Tax of Bernoni Grant Thornton