'Cedolare secca' tax scheme

From property tax changes to short-term rentals, the economic growth decree is a law that has been given the green light by the Italian House of Representatives and contains important measures for the real estate sector in Italy.

How are taxes calculated on rental income in Italy? Let's see what it says in the Italian Budget Law 2019 and the draft law on fiscal simplification, a new amendment to the growth decree. Starting from 2020, the taxation of income from long-term property rental in Italy will change.

The new bill from the Italian political parties M5S and Lega, the so-called "simplifications package" or "pacchetto semplificazioni", has been given the green light by the House of Representatives and will now go to the Senate.

The 2019 Budget Law in Italy extended the flat rate tax scheme (known as ‘Cedolare secca’ or ‘Dry coupon’) to include commercial real estate and warehouses as of 1st January 2019.

To avoid headaches in the future, it’s essential for a homeowner to choose carefully who they rent their apartment to and how they manage compliance with the rental contract.