Background on the Issue
Italy’s government intends to abolish tax exemptions on short-term rentals as part of its 2026-2028 budget measures, according to a draft presented on October 20.
Short-term rentals are prevalent in a popular tourist destination like Italy, but they have also become a politically sensitive topic amidst European protests against excessive tourism.
Current Tax Situation
Currently, property owners earning income from short-term rentals pay a 26% tax. However, they can claim a 21% reduction on one of their properties.
Proposed Changes
This differentiated tax regime was introduced two years ago by then-Prime Minister Giorgia Meloni’s government, which now seeks a single 26% tax rate.
Opposition to the Changes
Forza Italia, one of Meloni’s coalition parties, has pledged to oppose the measure, which has been criticized by sector representatives.
Forza Italia’s spokesperson, Raffaele Nevi, called the decision to eliminate the reduced tax “deeply mistaken” and expressed dissatisfaction that his party was not consulted about the proposal.
Government Response
Economy Minister Giancarlo Giorgetti did not mention the tax change when presenting the budget plans on Friday, detailed in an 110-page document accessed by Reuters.
Potential Impact on Short-Term Rental Owners
Marco Celani, director of the short-term rental association Aigab, stated that the tax increase would primarily affect middle-class property owners and encourage undeclared rentals to avoid taxes.
Aigab described the proposal as a “self-inflicted wound” in a statement.
Key Questions and Answers
- What is the current tax situation for short-term rental owners in Italy? Property owners earning income from short-term rentals currently pay a 26% tax but can claim a 21% reduction on one of their properties.
- Why is the Italian government proposing changes to short-term rental taxes? The government aims to establish a single 26% tax rate for short-term rental income, replacing the current differentiated tax regime.
- Who opposes these changes? Forza Italia, one of Prime Minister Giorgia Meloni’s coalition parties, has pledged to oppose the measure.
- What are the potential consequences of these tax changes for short-term rental owners? Critics, including Aigab’s Marco Celani, argue that the tax increase will disproportionately affect middle-class property owners and may lead to more undeclared rentals to avoid taxes.
