Italy’s short-term rental sector continues to evolve as the government introduces new measures to promote fair taxation, digital transparency, and compliance.
If you rent out a property in Italy — whether through Airbnb, Booking.com, or directly to guests — it’s essential to understand the latest regulations.
The cornerstone of these rules remains Law 96/2017, but as of 2024–2025, several digital and enforcement updates have been introduced. Here’s what every Italian and foreign property owner needs to know.
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Before Law 96/2017: How Rental Taxation Worked
Before June 15, 2017, property owners were responsible for declaring and paying rental taxes independently.
Local Taxes: Owners paid Council Tax (IMU) and Waste Tax (TARI).
Rental Income Tax: A 21% flat tax on gross rental income was due annually.
Manual Declarations: Owners reported income through accountants and paid taxes by June of the following year.
This system relied heavily on self-reporting and was often difficult to monitor, leading to widespread underreporting and inconsistencies across Italy’s growing tourism sector.
After Law 96/2017: The Shift to Intermediary Tax Withholding
With the implementation of Law 96/2017, the responsibility for collecting and remitting taxes moved from property owners to rental intermediaries — such as Airbnb, Booking.com, and local rental agencies.
This reform aimed to simplify compliance, reduce evasion, and ensure fair competition among hosts.
Key Obligations Under the Law
1. Intermediaries Must Withhold Tax
Platforms must withhold 21% of gross rental income and pay it directly to the Italian Revenue Agency (Agenzia delle Entrate).
Payments must be made by the 16th of the month following the guest’s stay.
2. Direct Payments = Owner’s Responsibility
If a guest pays the owner directly (via cash, transfer, or private website), the owner must declare and pay the 21% tax independently.
3. Definition of Gross Rental Income
“Gross income” includes:
The total amount paid by guests
Cleaning and linen fees
Utility costs (electricity, water, gas)
Agency commissions (if paid by the owner)
Excluded: Platform service fees paid directly by the guest.
4. City Tax (Imposta di Soggiorno)
Municipalities across Italy — including those in Puglia — may require a city tax.
Owners must verify rates and collection rules locally and submit reports to the relevant authorities.
2025 Updates: What’s New
The most recent measures build on Law 96/2017 to increase transparency and enforcement.
1. Digital Tax Reporting
Intermediaries must now submit detailed transaction data electronically to the Revenue Agency.
This centralized system allows real-time tax monitoring and easier cross-referencing of rental income.
2. Stricter Enforcement and Penalties
New penalties apply for intermediaries that fail to withhold or declare taxes correctly.
Owners who underreport income may face fines between 120% and 240% of unpaid taxes.
Repeat non-compliance can trigger deeper financial audits.
3. Increased Audit Activity
Properties rented for more than 30 days per year are now more likely to be flagged for review.
Owners should maintain accurate records of bookings, income, and expenses for audit readiness.
4. Compliance for Foreign Owners
Even non-residents must comply fully with Italian law, regardless of tax treaties.
Working with a bilingual tax advisor familiar with both Italian and international systems is strongly recommended.
Practical Tips for Property Owners
Work with Accredited Platforms
Partner with authorized intermediaries or professional agencies that handle tax withholding correctly and maintain compliance with national and local regulations.
Track Your Income and Expenses
Keep detailed records — while the 21% cedolare secca tax applies to gross income, expense tracking is vital for transparency and potential deductions.
Verify City Tax Obligations
City taxes vary widely across Puglia (for example, Ostuni and Polignano a Mare have different rates). Check local requirements regularly.
Seek Expert Support
A certified Italian accountant or tax advisor can ensure your filings are correct — especially if you manage bookings directly or reside abroad.
Stay Updated
Italian tax laws change frequently. Subscribe to updates from the Agenzia delle Entrate or work with an agency like Puglia Paradise, which monitors legal changes for partner property owners.
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Why These Changes Matter
Italy’s evolving rental regulations are designed to:
Ensure fairness between traditional hospitality and private rentals
Protect owners and guests through transparent systems
Support sustainable tourism growth across regions like Puglia
For property owners, compliance brings peace of mind — ensuring smooth operations, secure payments, and protection from penalties.
By collaborating with accredited partners, you can focus on what matters most: offering guests an unforgettable stay in one of Italy’s most beloved destinations.
