On March 14, the European Parliament approved the text that provides for the renovation of European buildings with the aim of making them more sustainable and less energy-consuming. In Italy we can assume that the Directive will become operational from 2025. It is therefore possible to assume, and is widely confirmed by the inquiries of possible buyers that are coming to our agency, that many properties in view of the implementation of the EU Directive, may lose their current market value if not properly renovated because they are less attractive on the market. Rising renovation costs also make properties to be renovated less sought after and thus, by the law of the market, their prices are bound to fall.
Currently in our country 74% of homes (nearly 11 million) fall within an energy class E, F or G, thus below the parameters imposed by the new Directive.
The main goal of the legislation is to reduce greenhouse gas emissions and energy consumption in the building sector by 2030, bringing emissions to zero by 2050 through a series of measures for the residential sector:
- Achieve at least energy class E by 2030;
- Achieve Class D status by 2033;
- Buildings in energy class G shall not exceed 15% of the entire territory's building stock;
- The energy efficiency scale should range from A to G, with parameters yet to be established and different from the Italian classification (less stringent).
- For nonresidential and public buildings, energy classes must be achieved by 2027 (for class E) and 2030 (for class D).
- As for all new buildings "for which it will be technically and economically feasible" they must be equipped with solar technologies by 2028, while for residential buildings undergoing major renovations the deadline is 2032.
But which properties are excluded from the directive?
The new EU Directive provides some exceptions. Among the properties that may be excluded from renovations are:
- Buildings with special historical and architectural value
- Churches and other places of worship
- Temporary use buildings
- Second homes used for less than four months of the year
- Single-family dwellings with an area of less than 50 square meters
No ban on selling or renting
Retrofitting a building that is energy class F or G has created justified concerns about both the eventual costs involved and the feasibility in terms of time. However, the initial rumor that one could not rent or sell a building that was not energy class E by 2030 and D by 2033 was disproved.
Actually, this obligation would be there only for those properties that are undergoing a major renovation and therefore will have to comply with the new energy class limit. In the event that no renovation is done or until it is planned, it will suffice to have the APE energy certification certificate attesting to the state of affairs, either to sell a property or to rent it.
Certainly, in the next few years, an energy-intensive property will be less attractive on the market than class A or B properties, but this is part of normal business dynamics. It is obvious that a new, efficient house in excellent condition is worth more than an old, energy-consuming house in need of renovation.
You can sell a class G property
It should be made clear that there is no prohibition against selling a Class G property. It is plausible that if the property in question does not have other elements that enhance its prestige such as location, outdoor space, and proximity to services, the selling price may not be very attractive.
One possible problem could be the difficulty of obtaining a mortgage for the purchase of such a property, as the ABI has denounced in recent days. However, this is a topic that deserves further study and clarification at a later date, as the situation could vary depending on different factors in the housing market and whether or not the directive is operational.
For example, in some cases, buying a house to renovate could be an opportunity for the buyer especially if he or she is eligible for tax incentives or energy upgrading benefits.
Energy upgrading of real estate can be seen as a positive boost for the largely aging Italian real estate market. We await more precise guidelines from the European Community and the state in order to better interpret the market and keep you updated on future developments.
In the meantime, we invite you to view all our proposals on our website and contact us at 0583 402198 for all information.