As property owners engage in short-term rentals, they must prepare for significant changes in flat tax regulations. These adjustments will affect the number of properties that can be rented and the corresponding tax rates. Understanding these changes is crucial to avoiding complications.
The forthcoming regulations represent
a substantial shift in the taxation of rental income. It is essential for landlords to familiarize themselves with these provisions to ensure compliance and optimize their tax benefits.
New tax rates and rental limits
Beginning in 2026, the flat tax will only apply to a maximum of two rented properties. If a landlord chooses to rent a third property, their activity will be classified as a business. Consequently, they will be required to obtain a VAT registration and enroll with the
National Social Security Institute (INPS). This marks a departure from the previous framework.
Tax implications for multiple properties
The revised tax rates for the flat tax in 2026 are as follows: the first rental property will benefit from a reduced tax rate of 21%, while the second will incur a higher rate of 26%. Notably, landlords can choose which property will benefit from the lower rate when filing their
income tax returns.
Owner responsibilities and administrative requirements
With the onset of these new regulations, landlords will face additional administrative and safety requirements. Short-term rental agreements, defined as leases lasting no more than 30 days, will now entail further obligations. For instance, landlords must register their contracts with the Revenue Agency and comply with safety regulations.
Penalties for non-compliance
Starting September 1, 2026, specific penalties will be enforced for violations related to the flat tax. For example, failing to declare rental income could result in a fine of up to 120% of the owed taxes. Furthermore, penalties can double for not reporting income subject to the flat tax.
Identification and transparency in short-term rentals
Another crucial change is the introduction of the National Identification Code (CIN), which will be mandatory for all short-term rental operators from January 1, 2026. This unique identifier must be clearly displayed on the property and included in all advertisements, whether online or offline. The goal is to enhance transparency and combat tax evasion.
Consequences of failing to display the CIN
Failure to display the CIN may incur fines ranging from €800 to €8,000, depending on the severity of the violation. Additionally, short-term rental operators that do not meet the required safety standards may face penalties ranging from €600 to €6,000.
It is essential for property owners to understand the new regulations and adapt accordingly. While the flat tax offers significant benefits in terms of administrative simplification and tax savings, compliance with the new rules is necessary to avoid penalties and legal issues in the future. Staying informed is vital for effectively managing short-term rental activities.