Cedolare secca: Italy's flat tax on rent

What it replaces

According to the Agenzia delle Entrate, the regime is “a substitute tax for IRPEF and additional taxes” on the income from the property. The rent then does not add to the landlord’s other income for IRPEF purposes. It also exempts the contract from registration tax and stamp duty (imposta di bollo) on registration, termination and extension. The flat tax does not replace the registration tax on an assignment of the lease (cessione), which stays due.

Two side effects matter. Income under the flat tax is outside the total income, so deductible expenses and tax credits cannot be set against it. But it still counts when the law tests income conditions for deductions, credits or benefits, for instance the ISEE (the household-wealth indicator) or whether a relative is a dependant.

Who can choose it

The Agenzia’s page limits the regime to:

• landlords who are private individuals holding ownership or another right in rem (usufruct, for example), not letting in the course of a business or profession;
• residential units in cadastral categories A/1 to A/11 (not A/10, offices), and their appurtenances (garage, cellar) let with the home, or by a later separate contract between the same parties that refers to the first;
• tenants who are also not acting in a business or self-employed capacity, whatever the later use of the home by employees. A narrow exception applies to certain shop leases (category C/1) signed in 2019.

Co-owners decide separately: each may opt or not. Those who do not opt owe registration tax on their share of the rent, and the stamp duty is still due on the contract.

The rates

For the 10% rate the Agenzia names the municipalities “with housing shortages” of art. 1(1)(a)-(b) of Decree-Law 551/1988: Bari, Bologna, Catania, Firenze, Genova, Milano, Napoli, Palermo, Roma, Torino and Venezia, their neighbouring municipalities and the other provincial capitals, plus the “high housing tension” municipalities identified by the CIPE. Check the exact list with the Agenzia for a specific town. Short lets are covered in a separate guide; from tax year 2026 the flat tax applies to short lets only if no more than two flats are used for that purpose.

A worked calculation with the official rates: on a lease with an annual rent of €12,000, the 21% flat tax is €2,520 a year and the 10% rate is €1,200. The base is the rent agreed between the parties, without the 5% flat reduction of ordinary taxation (a point the Agenzia states for short lets).

How to opt in, extend and revoke

• Opting in. The option can be made when the contract is registered, or in later years of a multi-year lease. If it is not made at the start, registration follows the ordinary rules and the registration tax and stamp duty already paid are not refundable.
• Duration. The option holds for the whole lease or extension, or, if made later, for the remaining period.
• Revoking. The landlord may revoke in any contract year after the one in which the option was made, within 30 days of the end of the previous year, and then registration tax becomes due where applicable. A later re-opting is always possible.
• Extension (proroga). The option must be confirmed together with the notice of extension, within 30 days of the expiry of the contract or of the previous extension.
• Early termination (risoluzione). No registration tax is due if all landlords opted for the flat tax, but the termination must still be reported to the office that registered the contract, with the RLI form.

The registration itself is in the guide on registering a rental contract.

The trade-off: no rent update

By choosing the regime, the landlord waives the right to ask for any update of the rent, even if the contract provides for it, including the ISTAT change in the consumer price index. For a long lease this can outweigh the saving, so landlords compare the flat tax with ordinary taxation over the whole term.

Which professional to consult

The choice between flat tax and ordinary taxation depends on the landlord’s other income and the length of the lease. It is typically settled with a tax adviser or an accredited tax-assistance centre (CAF) that also files the return. A real estate agent can explain the practice in a town but does not give tax advice.