The recent tax reforms for short-term rentals in Italy have sparked significant concern among property owners. These new regulations are expected to substantially increase taxes, which will directly impact the profitability of their rental operations.
As a result, the short-term rental market in Italy
is experiencing a notable shift. The government’s aim with these regulations is to address rising rental costs and the challenges posed by mass tourism. However, property owners have responded with widespread discontent.
The shift in taxation rates
The government initially proposed raising the flat tax rate—known as cedolare secca—from 21% to 26% for all property owners. This proposal intended to apply universally, affecting both private landlords and management companies, thereby
creating uncertainty within the sector.
Following protests, particularly from political groups like Forza Italia, the proposal underwent significant revision. The final decision stipulates that the 21% rate will remain for the first property rented out, while the 26% rate will apply to owners of a second property. Those owning three or more properties will be classified as businesses and will face the full range of fiscal obligations associated with
commercial enterprises.
Concerns from property managers
Lorenzo Fagnoni, president of Property Managers Italia, expressed grave concerns about these new rules, describing them as a substantial financial burden for small-scale landlords. He pointed out that many individuals with two properties are not wealthy investors but ordinary people trying to supplement their income.
Fagnoni cautioned that the increased tax could yield unintended consequences. Many landlords, particularly in less tourist-frequented regions, may opt to withdraw their properties from the rental market, worsening the decline of already vulnerable communities. If property owners are required to register for a tax ID to manage short-term rentals, this could deter future investments in the real estate market.
Potential effects on the housing market
The implications of these changes extend beyond individual landlords, affecting the broader housing market. Fagnoni noted that in many urban areas, property owners typically lease their apartments to students during the academic year, using short-term rentals to fill vacancy periods. The new tax structure may require that a minimal number of rental nights categorize these owners as commercial operators.
This situation could lead many landlords to rethink their rental strategies. Confronted with the choice of complying with stringent regulations and high taxes, many may decide to cease renting altogether, thereby reducing available housing stock instead of increasing it.
A call for balanced regulations
Fagnoni’s appeal to the government emphasizes the necessity for more balanced fiscal measures. It is crucial to distinguish between those managing multiple properties as a business and those who simply wish to avoid leaving their homes vacant. Targeting small property owners will not help alleviate the current housing crisis; rather, it risks further diminishing the availability of rental units.
The government must engage in constructive discussions with property owners to ensure that new regulations support not only the market but also the families that contribute to maintaining the housing supply in Italy. A meaningful dialogue is essential for developing solutions that do not impose excessive burdens on landlords while fostering a sustainable short-term rental market.