The landscape of short-term rental taxation is poised for significant changes with the introduction of new regulations in the 2026 Budget Law. This development has ignited considerable discussion among property owners and rental managers. The government has reached a consensus on a simplified tax regime known
as cedolare secca, which will introduce tiered tax rates based on the number of properties rented out.
These measures aim to clarify the distinctions between casual renting and professional rental businesses, impacting how landlords manage their properties. The new tax structure may also encourage a shift towards more formalized rental practices, transforming the short-term rental market.
New tax brackets for rental properties
Under the
revised regulations, landlords renting out a single property will continue to enjoy a tax rate of 21%. This rate supports individual landlords who may be renting out a spare apartment or home. However, for those managing a second property, the tax rate increases to 26%, reflecting a more structured approach to property management.
Importantly, landlords can designate which property will be taxed at the lower rate of 21%, while the subsequent property will incur the higher tax
rate. This approach aims to provide relief for those renting out multiple properties while addressing the need for tax equity.
Implications for property managers
For operators managing three or more rental units, the situation changes significantly. These landlords must register for a VAT number, indicating that their rental activity is now classified as a business rather than an occasional rental. This shift imposes additional tax responsibilities and necessitates adherence to business regulations and accounting practices.
Landlords opting for this business model will find their tax obligations influenced by the accounting regime they choose. Many may favor the flat-rate regime, which offers a substitute tax rate of 15%, reduced to 5% for the initial five years of operation. This regime applies only to part of their revenue, effectively lowering the tax burden during early stages.
Potential benefits of entrepreneurial rentals
Interestingly, even those managing just one or two properties might consider transitioning to a more formalized rental business. This could prove beneficial from a fiscal standpoint, especially if the tax rate for the second property rises to 26%. By registering as a business, landlords can take advantage of more favorable tax conditions that may become available.
The forthcoming regulations are expected to profoundly affect the short-term rental market. Landlords will need to reassess their management strategies as the classification of their operations hinges on the number of rental units they oversee. This could lead to a greater emphasis on professionalism within the sector, prompting property managers to adopt standardized practices to ensure compliance.
Balancing interests and addressing social concerns
A recurring theme in the political discourse surrounding these changes has been the need to balance property owners’ rights with pressing social issues, such as the housing crisis in urban areas. Industry associations advocate for equitable tax treatment between short-term rentals and traditional hospitality services. Conversely, many individual landlords express concerns that tighter regulations may adversely affect their rental income.
The modifications introduced in the 2026 Budget Law represent a strategic effort to reshape Italy’s short-term rental landscape. As these new tax rules take effect, their influence on property owners and the tourism sector will become increasingly clear. It remains to be seen how these changes will affect landlords’ decision-making processes and the overall dynamics of the rental market.