If you are a property owner in Italy and you decide to rent out your home or part of your property, the rental income is an income which is produced in Italy, even if you are resident abroad. That means that this income is subject to the payment of income tax.
Let's have a look at rental income tax in Italy and other obligations related to renting out a property.
Long term rentals
Long term rental contracts are subject to registration and a fixed tax percentage of 21%, if you opt for the so called taxation system of cedolare secca. It is recommended that you be assisted by a real estate agent for long term contracts and by a bookkeeper for rental related tax matters.
Long term rental contracts are subject to registration and a fixed tax percentage of 21%, if you opt for the so called taxation system of cedolare secca. It is recommended that you be assisted by a real estate agent for long term contracts and by a bookkeeper for rental related tax matters.
Private short term rentals
On this page we will focus on private short term rentals or touristic rentals (locazioni brevi). First of all, you have to know that legislation and rules regarding tourism, requirements for private persons to rent out, or professional touristic activities, are a regional matter. This means that you will have to familiarize yourself with the regional tourist laws that apply in the region where your property is situated. Be aware that in a lot of Italian regions, before you start renting out, it is required to send a one-time communication to the municipality (comune), in which you declare which unit(s) you may rent out in the future, and what the specifications of these units are (number of beds, bathrooms, etc).
Tax matters are a national competence and the rules are the same for all regions, except for the autonomous regions. The applicable law for private short term rentals is new since 2017. This is how it works.
Your rental income is subject to the payment of the "cedolare secca", a tax percentage of 21%. (From 2024 this will be 26% if you rent out more than one home for short periods.) On the 16th day of each month you are supposed to pay the 21% or 26% taxes on your rental income of the previous month. If the payment for the reservation was cashed by a real estate agent or other intermediary, this intermediary has to act as a tax substitute. He has to deduct the taxes from your rental income and pay the taxes for you. In March of the next calendar year, your tax substitute has to send you a declaration (CU or Comunicazione Unica) with the actual rental income and the amount of taxes that were paid. You need this CU for your tax declaration. For years, Airbnb did not recognize the new Italian law that obliged the intermediaries to act as a tax substitute and always refused to deduct these taxes from the rental amounts. However, after a long legal battle, as of 2024 Airbnb will now also respect the Italian law and deduct the taxes and pay them to the tax authorities.
With the taxation by cedolare secca, rental income is considered separately from your regular/other income.
If, according to the ordinary income tax system, the tax percentage of 21% is too high for your personal situation (that is, if you have little income to declare in Italy), you may choose to declare the rental income as a normal income. In that case, in your yearly tax declaration, you can opt to declare the rental income as a regular income, and the tax amounts of 21% which were paid by your tax substitutes are then considered as tax accounts.
Other obligations related to short term rental
Besides the obligation to pay tax each month after the month in which you collected the rental income (the day of arrival of your guests determines the month of the income), you also have an obligation to communicate the personal data of your guests to the State Police for national security reasons. This has to be done online, on a dedicated website, commonly referred to as Alloggiatiweb. This must be done within 24 hours after the day of arrival. You have to apply with the State Police in their local headquarters, called Questura, to be registered for using this website.
Finally, in your municipality your guests may have to pay a local tourist tax. For this matter, every comune has its own regulation, which outlines how much the tourist tax is, if children have to pay it and, if so, until which age, for maximum how many days per year the tax is due by each guest, when you are supposed to remit the tax to the Municipality and when and how you have to communicate everything. There are periodic communications, and one yearly communication. This yearly communication is the so called conto gestione which is done in January with a form called modello 21.
Other obligations related to short term rental
Besides the obligation to pay tax each month after the month in which you collected the rental income (the day of arrival of your guests determines the month of the income), you also have an obligation to communicate the personal data of your guests to the State Police for national security reasons. This has to be done online, on a dedicated website, commonly referred to as Alloggiatiweb. This must be done within 24 hours after the day of arrival. You have to apply with the State Police in their local headquarters, called Questura, to be registered for using this website.
Finally, in your municipality your guests may have to pay a local tourist tax. For this matter, every comune has its own regulation, which outlines how much the tourist tax is, if children have to pay it and, if so, until which age, for maximum how many days per year the tax is due by each guest, when you are supposed to remit the tax to the Municipality and when and how you have to communicate everything. There are periodic communications, and one yearly communication. This yearly communication is the so called conto gestione which is done in January with a form called modello 21.
Here you can read more about ⇨ property taxes in Italy ⇦ (IMU and TASI) and ⇨ Waste disposal tax in Italy ⇦ (TARI).
