Italy’s government has backed away from a blanket tax hike on short‑term rentals. The latest amendments to the 2026–2028 Budget Law keep the 21% flat tax on income from one short‑term rental property, while lowering the threshold at which hosting activity must be treated as a business.
The headline change and who it hits
The revised budget deal softens the impact on small, occasional hosts but raises the stakes for larger operators. City tourist taxes remain separate and still apply on top of any host income tax.
- Single‑property hosts: income from one short‑term rental will continue to benefit from the 21% flat tax instead of the standard 26% rate.
- Multi‑property owners: the government plans to lower the threshold at which short‑term rental activity must be registered as a business, reportedly from “more than four properties” to more than two.
- Scope: short lets of less than 30 consecutive days, whether booked on platforms like Rentalia, Airbnb and Booking or via direct reservations, remain covered by the flat‑tax system where applicable.
- Compliance signals: Italy’s national registration code for short lets remains central to enforcement, supported by tighter platform reporting to tax authorities.
Timeline and what could still change
Italy’s 2026–2028 Budget Law was presented in October and is now moving through parliamentary scrutiny. The Budget Law is expected to be approved around the end of December 2025, with the new rules generally taking effect from 1st January 2026.
- For income up to 2025, the existing system continues.
- From 2026, the key structural change is the likely shift of the business threshold downwards, from hosts managing more than four properties to those managing more than two.
- Parliament can still refine wording and technical details in the final stages of the budget process, so hosts and property managers should check the definitive text once approved.
An earlier draft that would have standardised the flat tax at 26% for all short‑term rental income and scrapped the concession on the first property has been shelved after resistance within the governing coalition and pushback from host associations.
What it could mean for prices and availability
The impact is likely to be most visible in markets where a large share of listings is controlled by multi‑property hosts and professional managers who may now be treated as businesses.
- Expect upward pressure on nightly rates, especially where a big slice of the market is run by multi‑property hosts who may be pushed into the business regime, and during high‑season dates.
- Possible fewer whole‑home listings in historic centres if some professional operators scale back or rebalance towards longer lets, with more options in outer districts and smaller cities.
- Cleaning, service and management fees may come under closer scrutiny as managers look to protect margins while staying competitive on headline rates.
Practical steps for hosts and property managers
Even before the final rate lands, it’s worth tightening the admin and testing your numbers. The aim is to protect the margin without falling foul of the new rules.
- Run the numbers: model your net income under two scenarios – staying in the private‑host regime with the flat tax on one property, and operating as a business if you manage more than two properties.
- Check your status: count how many units you manage, directly or through companies. If the final law confirms a lower business threshold, consider whether restructuring or consolidating activity is necessary and seek professional tax advice where appropriate.
- Rebalance stays: adjust minimum‑stay rules and seasonal pricing to keep occupancy healthy, especially if higher business‑regime taxation reduces your margin on peak‑season bookings.
Where the squeeze will be felt most
The sharpest changes are expected in locations where a high proportion of listings is already managed by professional operators or multi‑property owners, since these are the hosts most exposed to stricter business taxation and scrutiny.
- Heritage centres: Rome, Florence, Venice and Milan are likely to see faster pass‑through and stronger checks.
- Coastal and lake hotspots: Amalfi Coast, Cinque Terre, Sardinia, Sicily, and Lake Como, with short, busy seasons, tend to pass through costs quickly.
- Stricter cities: where self-check-in and registration enforcement already bite, expect quicker changes to supply and pricing.
The state of Italy’s short-term rental market
Short-term rentals in Italy have become a major feature of the housing landscape, especially in popular tourist destinations and city centres. The sector faces a delicate balance between demand from international guests, local pressure on housing affordability, and evolving layers of regulation.
Over recent years, rules around registration, maximum stay length, and taxation have become increasingly strict. Those operating in cities like Florence have seen particularly swift changes following the approval of new rules for tourist lets.
Anyone entering the market now needs to pay close attention to the latest short-term rental regulations and the differences between long, short and transitory rental contracts.
The most recent budget negotiations confirm the direction of travel: policymakers are moving away from a one‑size‑fits‑all tax hike and instead focusing on a clearer distinction between occasional hosts and professional operators.
Editor’s note: This article was updated in late November 2025 to reflect budget amendments that keep the 21% flat tax on income from one short‑term rental property while tightening rules for multi‑property hosts.
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