Introduction of tax credits and impacts
The Facade Bonus was introduced with the 2020 Budget Law, offering a 90% tax deduction of the expenses incurred for the recovery or restoration of the external facades of buildings located in zones A or B, according to the urban classification. The 110% Superbonus, introduced with the Relaunch Decree (DL 34/2020), allowed a 110% deduction of expenses for energy efficiency interventions and seismic risk reduction, including the installation of photovoltaic systems and infrastructures for charging electric vehicles.
An analysis of the economic impact of these incentives revealed that, between 2021 and 2023, incentivized housing investments were exceeding 170 billion eurosequal to approximately 3% of annual GDP. Using the synthetic control method, it was estimated that approx 45 billion euros represent a “deadweight loss”so long as a quarter of the subsidized investments would have been carried out even without incentives.
Construction sector and impact on other sectors
The document reports that the incentives represented approximately three-quarters of the growth of value added in the construction sector between 2020 and 2023, but they had a limited role in other sectors. Growth in investment in housing was estimated to be 67% higher in Italy compared to other countries that have adopted similar policies, at the end of 2023.
While tax credits have boosted the construction industry, their impact on other industries has been relatively modest. The sectors most affected were those closely linked to construction, such as non-metallic minerals, metals, engineering and architectural services and waste management.
Future perspectives
The analysis shows that although the Facade Bonus and the 110% Superbonus achieved their objective of stimulating investments in building renovations, their multiplier effect on aggregate demand was lower than expected. Furthermore, the net cost of the program was significant, suggesting that the surgery was unable to fully pay for itself through the increase in tax revenues generated by induced economic activity.
The experience of the “Facade Bonus” and the “110% Superbonus” highlights the need for careful planning of fiscal incentive policies, aimed at maximizing economic efficiency and minimizing losses.
Looking to the future, it may be useful to consider a more thoughtful incentive structurewhich offers greater benefits to low-income population groups and which promotes energy efficiency and environmental sustainability interventions more effectively.
These findings suggest that, while tax credits have generated a significant boost to investment, they should be refined improve their overall effectiveness and long-term financial sustainability.
