Italy to scrap short-term rental tax hike

Italy’s authorities has reportedly reversed course on plans to lift the flat-rate tax on all earnings from short-term leases to 26 p.c beginning in 2026.

Under the present two-tier system launched final 12 months, house owners pay 21 p.c tax on their first rental property and 26 p.c on extra ones. 

Prime Minister Giorgia Meloni’s administration had proposed putting off the decrease tier in its 2026 draft funds, requiring everybody to pay the upper fee on all properties.

READ ALSO: Six measures within the 2026 funds that have an effect on foreigners in Italy

But the plans proved unpopular even inside her personal coalition authorities, with Deputy Prime Minister Antonio Tajani saying his Forza Italia social gathering would “by no means vote for it”.

A raft of amendments offered to the Senate Budget Committee on Thursday night included scrapping the speed improve, in keeping with nationwide newspaper Corriere della Sera.

So nothing’s altering?

The funds invoice continues to be working its approach via parliament and is predicted to bear additional revisions earlier than its last approval by the top of the 12 months – however at this level it seems as if the 21 p.c fee will possible stay in place.

The information will come as a aid to house owners of short-term lets, as trade teams had estimated that the hike would price the house owners of a median semi-suburban property an additional €1,300 in taxes per 12 months.

There is one important change that the federal government is now proposing as a substitute: the variety of properties an proprietor can lease out earlier than they’re required to register as a enterprise is about to halve.

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Currently, folks with as much as 4 short-term rental properties (outlined in Italy as these rented out for intervals of lower than 30 days) can go for the cedolare secca flat-tax regime as a personal particular person.

Beyond that threshold, the exercise counts as a enterprise and requires a VAT quantity.

If the federal government’s newest plans are accredited, this requirement will kick in from the third property onwards.

Those affected are suggested to contact their accountant or one other certified monetary advisor for steerage.