The vacation rental market has undergone a profound transformation. Managing an apartment today is no longer just about handing over the keys, but navigating an integrated regulatory system.
If you're wondering how to navigate the changes introduced by the 2026 Finance Act on short-term rentals, this guide will help you understand the new rules for the flat-rate tax, the CIN requirement, and the potential profitability of a vacation rental.
What is meant by short-term rentals?
Short-term rental agreements are governed by Article 4 of Legislative Decree 50/2017. This type of contract allows a landlord to rent out a property solely for residential use for a maximum duration of 30 days.
Short-term rental contracts can be signed directly between the property owner and the tenant, through real estate intermediaries (such as estate agencies), or via online platforms that manage bookings.
A short-term rental agreement is defined in law as a contract that cannot exceed 30 days. This 30-day limit applies to each individual contract.
To qualify as a short-term rental, the agreement must meet all of the following conditions:
- It must be signed by private individuals
- The property must be rented solely for residential use.
- The activity must not be organised as a business.
- The property must fall within cadastral categories A1 to A11, excluding A10 (which covers private offices and studios).
- The contracts with the same tenant must not exceed a total of 30 days within a calendar year.
Rentals for commercial use are not covered by this regime. This includes, for example, leasing premises to pop-up shops or renting apartments to companies for use by their employees.
Flat-rate tax for short-term rentals 2026
The flat-rate tax (cedolare secca) is an optional tax regime available to those who rent out residential property. Under this system, landlords pay a substitute tax instead of personal income tax (IRPEF) and related surcharges. The rate is fixed, generally at 21%, and can be reduced to 10% in certain specific cases.
The flat-rate tax is widely used for short-term rentals, especially for contracts of less than 30 days. To manage these rentals, many landlords choose to use dedicated platforms such as Avaibook.
The new 2026 Budget Law introduces important changes for this category, modifying the applicable rates from 1 January 2026. For short-term rentals, there will be two rates:
- 21% rate: applied only to income from the first property rented out under contracts of less than 30 days
- 26% rate: applied to rental income from the second property rented out under the same regime
Short-term rentals in the 2026 budget
Another major change in the 2026 Budget Law for short-term rentals concerns the threshold at which the activity is presumed to be a business. Until the end of 2025, private individuals could rent out up to five properties. From 2026, this limit is cut to two.
From this year, anyone renting out three or more properties for periods of less than 30 days will no longer be able to use the flat-rate tax regime. Their activity will be treated as a business, requiring VAT registration.
Rental income will then be taxed under the ordinary system and will no longer qualify for the flat-rate tax, as the activity will be considered entrepreneurial in nature.
Short-term rentals, new rules for 2026
The new 2026 rules on short-term rentals , while not introducing further restrictions on tourist rentals, have further regulated the concept of entrepreneurship in the sector. In this context, the Guardia di Finanza (Italian Financial Police) has implemented an operational control plan to combat the phenomenon of vacation rentals evading taxes.
In parallel with the new 2026 rules on short-term rentals, the Guardia di Finanza (Italian Financial Police) has launched an operational control plan to tackle tax evasion in the holiday rental sector.
Checks cover several areas and combine on-site inspections with data analysis. On the ground, the Guardia di Finanza carries out inspections of properties and operators to verify that rentals are legitimate, with particular attention to areas with strong tourist demand. At the same time, officers cross-check data from various databases to spot irregularities and potential tax evasion.
In 2026, the National Identification Code (CIN) will also come fully into force. It aims to curb illegal accommodation, improve transparency and bring greater order to a rapidly expanding sector. One element of the new rules, however – the obligation to display the CIN on the exterior of buildings – has proved controversial, raising legal, condominium and privacy concerns.
Profitability of short-term rentals with the new 2026 rules
With the updated regulatory framework for 2026, Italy’s short-term rental sector is entering a phase of closer scrutiny. The current legislation directly affects the profitability of short-term rental investments. The planned 26% rate on short-term rentals has been dropped, so the flat-rate tax remains at 21% for the first property rented out on a short-term basis.
The real change lies in how entrepreneurial activity is defined. From 2026, the threshold will be lowered from five to three apartments. Beyond this limit, owners will be required to operate as businesses and register for VAT. Even within this tighter framework, returns from short-term rentals can exceed 6% of a property’s value per year.
Data from AIGAB, the Italian Association of Short-Term Rental Managers, cited by the financial daily press, indicate that only 2.5% of owners have three or more properties available for short-term rental. Despite their small number, these hosts account for around 8% of all listings.
These portfolios are often shared between spouses or, more commonly, between siblings, and are widely dispersed across the country: 70% of multi-property owners operate outside the major cities, and 80% of multi-unit holdings are located in small towns or in seaside and mountain resorts.
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