Italy, like many popular areas for tourists, has imposed new rules for landlords. What are the new rules for renting out your home in Italy in 2025?

Making your Italian property available for rental can make good financial sense. Renting out a room or apartment in a popular tourist area can achieve excellent rates, even on properties purchased at a lower budget. For example, a one-bedroom apartment in the historic centre of Ostuni, Puglia might cost you €130,000, but potentially you could let it out to tourists in August for around €1,000 a week. Even with only 12 weeks rented per year that’s a gross rental yield of more than 9%.

Your obligations and taxation will depend on whether you opt for a short-term tourism rental or a long-term rental.

Your obligations and taxation will depend on whether you opt for a short-term tourism rental or a long-term rental. If you are only offering one unit, the tax payments and procedures are fairly straightforward through a holiday rental portal, where they take the bookings, receive the payments and pay your tax at a fixed rate.

Short term rental

Online platforms, like Airbnb and booking.com, have enabled property owners to make some extra money from their Italian home. Often these are homes intended for residential use, in art cities, near the sea and tourist towns.

Property for rent (“affittasi”) in Tuscany (claudio zaccherini / Shutterstock.com)

When you own an Italian property which you only use for holidays, renting out the property when you aren’t using it can help towards running costs. Even when you live in Italy full time, there may be a section of your home you aren’t using, that could be creating an income.

Those who are fortunate enough to own a property in a popular tourist area have been making a good income this way. However, as seen in many parts of the world, it has affected the availability of long-term rentals for local people.

Before you buy

Before buying a property with the intention to rent it out, you should check out how strong the competition is in that part of the country. Another important consideration is whether the services you might need are available. Such as, laundry, meet-and-greet, cleaning, a maintenance person, pool cleaner etc. Note that, in some cities that attract high numbers of tourists, the local authority may have imposed restrictions on the number of new holiday rentals, set limits on lengths of stay and charge a tourist tax.

Tax on short term rental income

The income generated by renting an Italian property is taxed in Italy, whether the owner is living in Italy or not. Property owners were enjoying a 21% fixed rate tax on their short-term rental income, for up to four properties. However, in the last Government Budget, updates were introduced, which came in to force on 1 January 2025. Now the 21% flat rate tax (Cedolare Secca) only applies to the first property. “Cedolare Secca” is an optional taxation arrangement that is a straight forward flat rate tax that replaces IRPEF (income tax). If you are offering a second, third or fourth property for holiday rental, the tax rate is now 26% on these.

If you choose the flat tax option, any intermediaries, such as a property rental portal or real estate agent, must communicate to the Revenue Agency the data of the short-term rental contract. They can also withhold the tax of 21%, and make the relevant payment. They must also provide you with the data so you can check the correct tax is being paid.

You can no longer simply give a guest directions to a key box and allow them to let themselves in.

While Airbnb are now set up to withhold the 21% tax, and make the payments for you, you should consult a tax advisor regarding additional tax due on any second, third or fourth property you are offering for short term rent.  If you have more than four, you will be considered to be running a business and will need to request a SCIA (Certified Start of Business Report) to enable you to begin a new economic activity.

Legal requirements on short term rentals

1. Safety Standards

Your property must comply with safety and habitability standards. In November 2024, the Ministry of Tourism updated the requirements, making it mandatory to install devices for the detection of combustible gases and carbon monoxide and have portable fire extinguishers.  You should also regularly check devices and keep documentation demonstrating certified maintenance.

2. Identification code

You must notify the local municipality (Comune) and obtain a regional rental identification code (CIR). In addition, it has now become mandatory to get a National Identification Code (CIN) which must be displayed outside the property and on advertising. The Ministry for Tourism keep a record of the number of CINs in each region on their website, and you can download a user guide explaining how to apply.

3. Greet guests in person

On arrival at the property, guests must be met in person to verify who they are. As of 18th November 2024, you can no longer simply give a guest directions to a key box and allow them to let themselves in. Italy’s interior ministry issued a notice telling short-term rental hosts to remove the key boxes hanging from railings, external gates, and lamp posts.

Key boxes will need to be removed (Antonello Marangi / Shutterstock.com)

4. Register guests

When you receive guests, you must register their presence at your property with the local police authority (Questura) within 24 hours of their arrival. This can be done online at “Alloggiatiweb”, once you have a code card to access it.

5. Tourist Tax

Some municipalities impose a tourist tax (Tassa di Soggiorno), which you must collect and remit. If you are a short term rental host in a municipality that imposes a tourist tax, Airbnb may collect and remit this tax on your behalf, if your municipality has registered to Airbnb’s Tourist Tax portal.

Conditions for Flat Rate Tax

• Firstly, it is designed for individuals who want to occasionally rent to tourists in a non-entrepreneurial manner. Usually, you will be offering just the one property or room, but you are allowed up to four apartments.
• The tax rules for “short-term rentals” applies to a residential unit located in Italy, on a rental contract with a duration not exceeding 30 days.
• It is only allowed on a residential property belonging to the cadastral categories from A1 to A11. Not spaces registered for offices etc. The taxation of short-term rental contracts also provide for the provision of ancillary services, such as, the supply of bedding, cleaning of the premises, the use of wi-fi.
• Tax payments can be dealt with directly by the owner or through a rental portal or real estate rental business.

Long-Term Rentals

Short-term rentals have been made popular by platforms like Airbnb and Booking.com, due to their high earning potential in peak tourist seasons. However, several factors are now making long term rental more desirable:

Due to the need for homes for the local population, the government is introducing tax benefits to encourage landlords to offer long-term rentals. For example, in Milan there has been an increase in regulated rental agreements, known as “canone concordato”, which offers landlords a 10% flat tax, (cedolare secca), a 25% reduction in property tax (IMU) and a shorter minimum lease (five years, rather than eight on the free market).

The government is introducing tax benefits to encourage landlords to offer long-term rentals

Taking into account long term rental properties need less regular upkeep than holiday rentals, and offer a predictable regular year-round income, some owners of holiday rentals are considering changing.

Types of long-term rental agreement

Some landlords are opting for long-term rental contracts, especially regulated rent agreements, which offer financial benefits and greater stability. However, deciding which rental contract to use can be as difficult as deciding which is the best shape of pasta. Some are regulated by law and others are referred to as “free”, as they offer landlords and tenants more freedom to set the minimum duration, terms for termination, renewal, withdrawal, and rent.

Free market  

The most common rental contract is the standard free market lease, which allows you to freely negotiate payment terms. It has a minimum duration of four years, followed by an automatic renewal for another four years. While the landlord can’t end the contract early, the tenant can if they have a valid reason and give six months’ notice of termination (recesso). The property owner can only refuse to renew the contract after the first four years if renovation work needs to be done, the property is being sold or a family member needs to use it. After the second four years you can choose to not renew (disdetta). You can ask for a security deposit for up to a maximum of three months rent.

No prizes for guessing who the authorities are targeting (Kaspars Grinvalds / Shutterstock.com)

Other rental contracts to consider:

Agreed rent: Minimum of three years, followed by a two-year renewal. Rent is regulated and set by the municipality, but the landlord gets tax benefits. You could be paying as little as 10% tax.

Student lets: Contracts range from six months to three years. Rent is regulated, but the landlords receives tax benefits.

Luxury and Historic: A luxury property (A/1, A/8, A/9) or a property of historic interest can have a flexible contract, in which the length, rent, etc, can be negotiated freely.

Obligations

• The landlord is responsible for registering the contract within 30 days and supplying the details to the tenant within 60 days. Lease contracts for a period of more than 30 days must be registered with the Italian Revenue Agency (Agenzia delle Entrate), This can be done online through “Fisconline”.
• On some types of contract, you must pay registration tax and stamp duty. Unless you have a “flat rate tax” then you don’t pay this. Registration fees are split between landlord and tenant.
• The landlord is responsible for ensuring that the property is in good habitable condition and complies with the safety requirements set by law.

Proving habitability

When you buy a property in Italy you will want reassurances that the building is safe and habitable before you buy. The documents that will offer you this evidence are the same as those a tenant will be interested in.

Documents that can be obtained to prove habitability to the authorities, a buyer or potential tenant are: An energy performance certificate; An APE (which covers, efficiency of heating, lighting, hot water and insulation); a land registry certificate; a cadastral plan; and a Certificate of habitability.

A certificate of habitability is a document issued by the technical office of the municipality, that certifies that the property is suitable for habitation. It confirms that the building is safe, hygienic, accessible, energy efficient, has fire prevention and protection, and that the property was built in compliance to building permits.

Seek professional advice

Deciding on the best type of contract for your needs, finding a good tenant, ensuring you meet all legal obligations, and calculating the potential yields on your investment, is not an easy task when buying in any country you are unfamiliar with.

The information gathered in this article may change, on a national and local level at any time. Therefore, it is advisable to get advice from a real estate agent and Italian lawyer that have recent experience with the rental market in the part of the country in which you are buying a property. In addition, a tax advisor licensed to work in Italy will be able to look at your individual situation and advise which tax regime will give you the best return.