The idea of turning a spare apartment or seaside villa into extra income is appealing, but the fiscal side determines how much of that revenue really stays in your pocket. This guide explains the practical choices that affect the bottom line: from a simple flat-rate option
to full business taxation, and when VAT recovery or broader expense deductions become available. Understanding these options early prevents surprises and helps you plan investments, maintenance and service offerings with tax efficiency in mind.
One legal benchmark you must keep in mind is the threshold introduced by the 2026 budget law: managing up to two units on an occasional basis generally keeps you in the realm of the private taxpayer, while operating
more properties or providing extra paid services typically triggers the obligation to register for a VAT number (partita IVA). This distinction changes your choices dramatically, so align your business plan with this rule before scaling up.
Choose a fiscal regime: simplicity or the ability to deduct
Owners can usually pick between a simplified flat tax, taxation under personal income rules, or a full business regime with a VAT number.
The flat-rate option (often referred to by its Italian name, cedolare secca) applies a fixed percentage to rent without allowing expense offsets, and is attractive when outgoings are limited. By contrast, ordinary IRPEF taxation or operating under a registered business lets you subtract documented costs from taxable income and, in the case of the business regime, potentially recover VAT on purchases. The best path depends on anticipated expenses and your growth plans.
Private owners: when IRPEF outperforms the flat tax
If you manage one or two homes and expect significant recurring costs—like utilities, professional cleaning, furnishings or advertising—opting for ordinary IRPEF treatment may reduce overall tax. The key technical difference is between a deduction (which lowers taxable income) and a tax credit (which reduces the tax owed). With ordinary taxation you can document and claim many real expenses as deductible expenses, directly shrinking the base used to calculate taxes. For owners with heavy maintenance, renovation or service costs, this analytic approach often yields a better net result than a flat-rate scheme.
When to open a VAT number and which business regime to choose
How the forfettario regime works (illustrative example)
Once activity is entrepreneurial—usually when more than two units are managed or additional services are offered—you must consider a partita IVA. The simplified business option, the forfettario regime, calculates taxable income by applying a fixed profitability coefficient to turnover rather than tracking every single bill. For example, a €20,000 turnover with an 80% coefficient produces a taxable base of €16,000; social contributions are subtracted and a flat tax (commonly 15%, or a reduced 5% for eligible start-ups in early years) is applied. Note that the forfettario caps turnover eligibility (currently with an upper limit near €85,000) and does not allow analytic expense deduction or VAT recovery.
Regime ordinario: when it pays to be detailed
The ordinary VAT-registered regime suits operators who incur substantial costs or invest in the business: it permits the analytic deduction of operating expenses and the deduction of input VAT when purchases are directly linked to the taxable activity. Taxes are then computed on the net result according to progressive IRPEF rates or corporate rules, depending on the legal form. This setup demands stricter bookkeeping but can significantly improve net margins when purchases, renovations or outsourced services are large.
Which expenses can be deducted or allow VAT recovery
Under a deductible regime or a VAT-registered business you can typically account for a wide range of items: utilities (electricity, gas, water, internet) if borne by the owner; cleaning and linens; platform commissions to OTAs like Airbnb and Booking; advertising and booking software; furniture and equipment purchases; breakfast supplies if offered; repair and ordinary maintenance; and professional fees such as an accountant. Crucially, proper invoices and consistent classification of the property as a commercial asset are required to claim deductions or recover VAT. If you remain under cedolare secca, these offsets are not available, so weigh the simplicity of the flat rate against the value of the expenses you actually incur.
In practice, good planning and tidy documentation make the difference between a profitable short-term rental and one eroded by taxes. Keep all receipts, define your business model in line with the 2026 budget law, and consult a qualified professional to select between cedolare secca, IRPEF, forfettario or ordinary VAT regimes—each path carries trade-offs that affect cash flow, compliance and long-term returns.