Italy's government has reportedly reversed course on plans to raise the flat-rate tax on all income from short-term rentals to 26 percent starting in 2026.
Under the current two-tier system introduced last year, owners pay 21 percent tax on their first rental property and 26 percent on additional ones.
Prime Minister Giorgia Meloni's administration had proposed doing away with the lower tier in its 2026 draft budget, requiring everyone to pay the higher rate on all properties.
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But the plans proved unpopular even within her own coalition government, with Deputy Prime Minister Antonio Tajani saying his Forza Italia party would "never vote for it".
A raft of amendments presented to the Senate Budget Committee on Thursday evening included scrapping the rate increase, according to national newspaper Corriere della Sera.
So nothing's changing?
The budget bill is still working its way through parliament and is expected to undergo further revisions before its final approval by the end of the year – but at this point it looks as though the 21 percent rate will likely remain in place.
The news will come as a relief to owners of short-term lets, as industry groups had estimated that the hike would cost the owners of an average semi-suburban property an extra €1,300 in taxes per year.
There is one significant change that the government is now proposing instead: the number of properties an owner can rent out before they're required to register as a business is set to halve.
Currently, people with up to four short-term rental properties (defined in Italy as those rented out for periods of less than 30 days) can opt for the cedolare secca flat-tax regime as a private individual.
Beyond that threshold, the activity counts as a business and requires a VAT number.
If the government's latest plans are approved, this requirement will kick in from the third property onwards.
Those affected are advised to contact their accountant or another qualified financial advisor for guidance.
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