In this post, we aim to shed light on the topic of short-term rentals.
What is a Short-Term Rental?
Under Italian Law 431/1998, a short-term rental is a lease agreement for residential properties—or portions thereof—offered by individuals acting outside of any business activity. The total rental duration with the same tenant may not exceed 30 days within a single year.
How Many Apartments Can Be Rented Using the Short-Term Rental Formula?
Since 2021, individuals may use the short-term rental formula only for renting up to four apartments per year. Beyond this threshold, the rental activity is classified as a commercial operation, which requires VAT registration.
What is the Tax Regime Applicable to Rental Income from Short-Term Rentals?
Under Decree Law No. 50/17, landlords may opt for a substitute tax (known as “cedolare secca”) instead of the ordinary IRPEF regime. This choice can be made when submitting the annual tax return, often with assistance from a tax advisor.
The 2024 Budget Law introduced an amendment that raises the “cedolare secca” rate starting from the second rented property. For the first property, the rate remains 21%, while from the second property onward, it increases to 26%
Moreover, if rent is collected by an intermediary such as: a real estate agency or an online platform (e.g., Booking.com, Airbnb), that intermediary is required to withhold part of the rent as withholding tax before transferring the balance to the landlord.
What Are the Main Differences Between Short-Term Rentals and Holiday Homes ?
Although Italian regional regulations treat many mandatory requirements for holiday homes and tourist rentals in a similar way, reading both national and regional laws (including Decrees D.d.u.o. No. 13056 of 17.09.2019 and D.d.u.o. No. 17869 of 06.12.2019) clarifies that the main distinction lies in how the property is used and which services are provided; in a short-term rental, the property (or part of it) is offered solely for brief stays (up to 30 days), without providing any additional services (whether optional or mandatory). On the other hand, in a holiday home, the landlord may provide extra services such as daily cleaning and linen changes throughout the stay. Both short-term rentals and holiday homes may offer initial linens. However, short-term rentals do not require civil liability insurance, reporting minimum/maximum rates, or observing a mandatory closure period, obligations that do apply to holiday homes, which will be discussed in more detail in a forthcoming post.
Below is a summary table of the main differences between short-term rentals and holiday homes:
| Description | Short-Term Rental | Holiday Home |
| Maximum Guest Stay | Not more than thirty days | Not more than one year |
| Annual Closure Period | Not applicable | Minimum 90 days |
| Number of Manageable Properties | Up to four properties | Up to three properties |
| Provision of Initial Linens | yes | Yes |
| Provision of Final Cleaning | Yes | Yes |
| Requirement to Report Minimum and Maximum Prices and Rates to the Relevant Office | No | Yes |
| Food and Beverage Service | No | No |
| Requirement to Obtain an Insurance Policy | No | Yes |
| Option to Provide Additional Services (e.g., daily cleaning service, linen change service, etc.) | No | Yes |
What Does Managing a Property as a Short-Term Rental Involve?
Managing short-term tourist rentals may initially seem straightforward, but for those not doing it as a primary occupation, it can quickly become demanding.
First, you will need a good photography service to highlight the property’s features and select the most effective advertising channels. Next, you must coordinate check-ins and check-outs, cleaning, and linen changes. Finally, maintaining a friendly relationship with guests during their stay is always appreciated and allows you to respond promptly to any maintenance or service issues that arise.
Aside from these practical and operational considerations related to guest hospitality, the many bureaucratic requirements imposed by national and regional regulations are anything but negligible. As of today, in order to rent out real estate units (or portions thereof) located in the Lombardy region for tourism purposes under the short-term rental formula, it is necessary to:
- Submit a comprehensive communication to SUAP via the national platform “Impresainungiorno.gov.it,” including all self-certifications and documentation required during the assisted completion process. Each activation of an accommodation unit intended for tourist rental, as well as any increase in the number of units, requires a new submission with all relevant cadastral data for the property in question.
-
Register on the “Alloggiati Web” portal of the Police Headquarters to report guest identities within twenty-four hours of their arrival, pursuant to Article 19 bis of Decree-Law October 4, 2018, No. 113, converted into Law December 1, 2018, No. 132.
-
Pay the tourist tax to the municipality on behalf of guests, where applicable.
-
rRequest the CIR (Regional Identification Code). The CIR is mandatory for advertising, promoting, and marketing vacation rental properties. This unique code, generated at the time of registration in the regional “Ross 1000” system, consists of six numeric digits referencing the municipality’s ISTAT code, three alphabetic characters identifying the type of property, and five automatically generated sequential characters. Under current legislation, landlords lacking a CIR or displaying it incorrectly or imprecisely risk a fine ranging from €500 to €2,500 “for each advertised, promoted, or marketed activity.” In the event of repeated violations, fines are doubled, and the municipality may suspend the activity for up to three months or terminate it altogether.
For completeness, please note that when the landlord notifies the start of a tourist rental (or holiday-home) activity, regional regulations require an explicit declaration of the following:
-The properties are rented in accordance with Law 431/1998, Regional Regulation No. 7/2016 (including its amendments), and all associated provisions of Regional Law 27/2015.
– The properties intended for tourism have a valid residential-use designation that permits tourist rentals.
– All guest reporting obligations are fulfilled in line with public security authority guidelines, as set forth in Article 38(8) of Regional Law No. 27/2015.
-The rental activity complies with every relevant rule referenced in the notification, as well as all applicable requirements (e.g., urban planning, public/building hygiene, environmental protection, workplace health and safety, food safety, and local urban policing).
For any additional questions, please feel free to contact us.
Prepared on 02/26/2024 by our tax expert: CDL Luigi Pellecchia – Naples Association of Labor Consultants.