Tourist rentals: new rules for declaring tourist rentals in Italy

Once again a lightning move by the Italian government, this time in the field of short-term tourist rentals. The new Draft Law 50/2017 was published in the Official Gazette on 24th April and came into effect the following day. Its proposals are revolutionary: income from all short-term tourist rentals (defined as stays of under 30 days), whether organised directly or through agencies, AirBnB or similar online portals is to be taxed at a flat rate of 21% through the scheme known as cedolare secca. Under this scheme all contracts have to be registered with the Agenzia – and the Government’s suggestion is that the agencies will be responsible for doing this, with fines for late or omitted registration.

As regards the property owners, under the cedolare secca no costs are deductible, so what you receive is what you declare.

In addition, agencies and portals which receive rental income on behalf of the property owners will be obliged to act as tax collector: they will need to deduct the 21% tax from the payments before passing on the proceeds to the client.

Not surprisingly AirBnB and the online portals are not at all happy about this proposal and it is very much a subject for on-going discussion. The law is stated to apply as of 1st June 2017 so they will need to discuss this quickly! It will be interesting to see if anything comes of it or if the law is repealed.

For now the new law represents a dramatic change for all those renting out Italian properties to tourists – although 21% is a better rate than the lowest income tax bracket (23%) the inability to deduct any costs whatsoever will be extremely punitive and will doubtless encourage many to give up the idea altogether.