The government is preparing to launch a rent tax reform. The measure, included in the budget law, was announced yesterday in a press conference by Prime Minister Giorgia Meloni and is designed as an antidote to high rents, a problem which, as Meloni remarked, “affects all of Europe” and especially concerns young people and “those who work in big cities”.
The government’s intention is to bring the agreed rent rate to 5% for everyone and lower it to 1% if the property is rented to anyone under 35. Another point involves the introduction of a flat rate of 21% on commercial leases. But let’s go in order.
How rent taxation works today
Today, those who rent a house have two options in front of them: adhering to the so-called ‘dry tax’, paying a fixed tax calculated solely on the amount of rent collected; or add the fee to other income, making it fall within the ordinary Irpef tax regime.
Currently the flat rate tax has only two main rates: the 21% rate for short-term or free-rent rentals and a reduced rate of 10% for agreed-rent contracts. In the first case, the owner can freely choose the price at which to rent, even if he will necessarily have to adapt to market rates; in the second he is instead required to respect the minimum and maximum limits established by law.
The rationale is simple: in exchange for the tax advantage, the owner gives up earning more by renting the property at a more advantageous price for the tenant. Not to mention that the agreed rent also includes a 25% discount on the IMU (if the rented property is a second home).
What changes from 2027, let’s do the real math
The government’s idea is to make renting with the agreed rent even more convenient, by lowering taxes on homeowners to obtain a reduction in rates that is also advantageous for tenants.
How much could we save with the new rates? Let’s arm ourselves with a calculator and give an example. On a collection of 9,600 euros per year (net of IMU and other expenses), today a homeowner who rents with an agreed rent pays 960 euros in taxes. With the new reform the amount would drop to 480 euros and even to 96 euros if the tenant is under 35.
The center-right is convinced that lowering taxes will trigger a virtuous mechanism. From now on the owner “will be better off renting at a controlled rent” said Meloni, “and it will be much better to rent to a young person rather than renting at a normal market price or rather than keeping the house vacant, unused, or perhaps renting it illegally”. The result, according to the prime minister, will be to have “more houses on the market” and therefore “lower rents and more young people who can leave home and build a life”.
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The rate is 21% on commercial establishments
With the budget law, the dry tax rate is then introduced on commercial properties which are currently taxed according to the ordinary tax regime. With the reform, traders will instead be able to pay a flat rate of 21% which in most cases will be more advantageous. “For a shop, a shop, a neighborhood business” the rent “is often the first cost item” said Meloni at the press conference. “Helping those who rent here too means helping to keep the shutters open, keeping our historic centers and our neighborhoods alive.”