If you've got a place in Italy and you're renting it out to people on short trips - maybe through websites like Airbnb or Booking.com, or just on your own - you should know that the tax rules just changed in a big way as of January 1, 2026. This affects anyone who owns a holiday home in Italy, whether you're from another country or not, and it's also important to know if you're thinking of buying a place in Italy to rent out. So, what's the new system look like?

What is the "cedolare secca"?

In Italy, there's a simpler way to pay taxes on rental income from homes. It's called the cedolare secca, which is like a flat tax rate. Normally, you'd add your rental income to your other income and pay taxes based on how much you make, plus some extra fees. But with the cedolare secca, you just pay one fixed tax rate. This is available to people who rent out their homes, but not as a business. It even applies to short-term rentals, like when you rent out your place on Airbnb for a few weeks. If you're subletting or renting out a place that someone else owns, you might still be able to use this simpler tax system.

The 2026 rates: it now depends on how many properties you rent

The main thing that's changing is how the rate is figured out. It used to be based on how you rented out your place, but now it's based on how many units you use for short-term rentals.

When you've got one property, the typical tax rate is 26%. But here's the thing: you can choose to pay a lower rate of 21% on that property when you file your taxes. This choice is important because the lower rate isn't something you get automatically. And what's more, the final version of the law says that this lower rate applies no matter how you rent out your property - whether it's through a platform like Airbnb or some other way. So, renting through Airbnb won't automatically push you into the higher tax rate.

If you own two properties, you have the option to choose which one gets taxed at 21% - usually the one that brings in more money. The other property will then be taxed at 26%. This can be a good way to manage your taxes, as you can pick the rate that works best for the property that generates the most income.

If you own more than two properties that you're using for short-term rentals, the government considers you a business. This is a big change - before, you could have up to four units without being seen as a business. Now, once you have three units, you have to do a few things. You need to get a VAT number, which is like a special ID for businesses, and you have to start paying social security contributions. You also can't use a special tax rate called the cedolare secca anymore, and instead, you'll be taxed like a regular business.

Here are a few key things to know about how the threshold is calculated. For one, properties that are rented out on long-term contracts, like the typical 4+4 or 3+2 leases, aren't included in the count. Another important detail is that if you're renting a garage or cellar along with an apartment, it's considered part of the apartment and subject to the same rate. This can be useful to keep in mind when figuring out how the threshold applies to your situation.

If you own multiple properties in Italy and you're not from there, the two-property threshold is really important to know. It will help you make big decisions about how to handle your properties and taxes. You should get professional help to figure out what to do before the tax year is over, not after. For example, you might need to decide which properties to choose for a 21% tax rate, or if it's better to use a company to own your properties.

How the tax is collected

When you rent out a place through a platform that handles payments, they take out 21% of what the guests pay. This is like a down payment on your taxes, because the actual rate might be higher. So, when you do your Italian tax return, you'll declare how much you made, use the right rate for each place, and pay any extra you owe. Even if you don't live in Italy, you still have to do a tax return, make advance payments, and settle up by the usual deadlines.

Beyond taxes: the compliance layer

Two more things are going to change the way things work in 2026. If you want to rent out your property for a short time in Italy, you'll need to show a special code called the National Identification Code, or CIN for short. This code is given out by the Ministry of Tourism. Now, companies that help people rent out their properties have to tell the tax authorities about the code and other information about the rental. Also, since May 2026, there's a new EU rule that says platforms have to share detailed information about hosts and their guests with the authorities. With all these new rules, including the CIN, platform withholding, and sharing data with the EU, it's going to be a lot harder for people to rent out their properties without reporting it to the government.

What this means for you

The 2026 rules reward simplicity: one well-chosen property at 21% remains an attractive, straightforward regime. But the moment your plans involve two or more units, the tax design of your Italian rental activity - which unit to elect, whether the business threshold is in play, how the withholding interacts with your final liability, and how all this coordinates with your home-country taxation - becomes a genuine planning exercise.

At Move To Dolce Vita, we help people who own property in other countries with things like registering their rental properties and setting up portfolios with multiple properties under the new rules. Why not book a meeting with us today and get a clear understanding of your situation before the tax people start asking you questions?

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