Complete Guide to Short Leases and Flat Tax in 2024
Introduction to Short Leases
Short-term rentals represent an increasingly popular way to rent properties for residential use for periods of less than 30 days. This type of contract is exempt from the registration requirement, unless it has been drawn up in the form of a public deed or authentic private agreement. However, this does not mean that such rentals are exempt from tax obligations, indeed, with increasing regulation, it is essential that lessors are aware of the current regulations to avoid penalties and to optimize the management of the resulting income.
The New Regulatory Scenario for 2024
The Introduction of the National Identification Code (CIN)
Starting from September 2024, with the launch of the national tourism platform, the National Identification Code (CIN) for short-term rentals will come into force. This code will be necessary to advertise the properties on all channels, both physical and digital. Anyone who already has a code issued by a Province or Region will have 30 days from the launch of the platform to request the national CIN.
Requirements for the CIN: To obtain the CIN, the real estate units must meet the safety requirements established by national and regional regulations. The absence of the CIN will result in sanctions ranging from 800 to 8.000 euros, and in some cases, such as the lack of security measures, fines can reach up to 5.000 euros.
What Will Change in the Next Months?
With the introduction of the CIN and the national platform, tighter control over short-term rental activities is expected. This new system will help fight tax evasion and ensure that all activities comply with safety and transparency standards.
The Dry Cedolare for Short Leases
The flat rate tax represents an optional tax regime that replaces the IRPEF and the related surcharges on income deriving from short-term rentals. From 2024, the flat rate tax regime for short-term rentals has undergone some important changes.
Rates and Conditions
Rate of 26%: Applicable in general to all short-term rental contracts.
Rate reduced to 21%: Applicable if you rent only one property unit for each tax period. This must be explicitly declared in the tax return.
This choice allows landlords to simplify tax management, avoiding having to calculate IRPEF on the rents received and paying a fixed tax on the entire amount received.
Tax Obligations and Penalties
Landlords must decide whether to opt for flat rate tax at the time of tax return or when they decide to register the contract. It is important to note that failure to request the CIN or failure to comply with the new regulations may result in significant sanctions.
Short Rentals and Entrepreneurial Management
The management of multiple real estate units intended for short-term rentals can be considered an entrepreneurial activity if it exceeds certain thresholds. In particular, if you manage more than four apartments, the activity is considered entrepreneurial and subject to different tax rules, including the obligation to have a VAT number and the certified notification of commencement of activity (SCIA).
Short-term rentals: Opportunity or Risk?
Short-term rentals can be a profitable opportunity for property owners, but they also come with additional risks and costs. In addition to paying taxes, such as IMU and waste tax, landlords must take into account utility management costs and commissions to intermediation platforms. Furthermore, it is essential to comply with current regulations to avoid sanctions and to ensure that the activity is carried out regularly and safely.
Practical Considerations
Managing a property for short-term rentals requires attention not only to fiscal aspects, but also to operational ones, such as cleaning and booking management. Many owners prefer to outsource management, which incurs additional costs but can increase occupancy of the property and reduce the stress of direct management.
FAQ
- What is CIN and why is it important?
The CIN is the National Identification Code, mandatory from September 2024 to advertise properties intended for short-term rentals. Its lack entails sanctions.
- What requirements must real estate units meet to obtain the CIN?
They must meet the safety requirements established by national and regional regulations.
- What changes with the introduction of the CIN?
The CIN will make compliance with safety and transparency standards mandatory for all accommodation facilities, reducing tax evasion.
- What are the penalties for not having a CIN?
The fines vary from 800 to 8.000 euros, depending on the severity of the infringement, and can reach up to 5.000 euros for lack of safety requirements.
- How does flat rate tax work for short-term rentals?
The flat tax allows you to pay a substitute tax with a fixed rate of 26% or reduced to 21% for a single real estate unit per fiscal year.
Conclusion
Managing short-term rentals can be an advantageous economic opportunity, but it is essential to know and comply with current regulations to avoid penalties. With the introduction of the CIN and the new 2024 tax rules, transparency and compliance have become even more crucial. Landlords should inform themselves adequately and consider all available options, including the choice between flat rate tax and ordinary tax regime, to optimize the management of their properties.
This guide is designed to offer a complete picture of the current regulations and the innovations introduced in 2024. If you have further requests for further information or other needs for your blog, don't hesitate to ask!
Short-term rentals and taxation: How to obtain the CIN in 2024 - The most useful FAQs
FAQ – Short Leases and Dry Tax 2024
- What is the National Identification Number (CIN) and how is it obtained?
The CIN is a mandatory code for advertising properties intended for short-term rentals. It is obtained via the national tourism platform after satisfying the security requirements.
- What are the security requirements to obtain the CIN?
The requirements vary according to national and regional legislation, including aspects such as compliant systems, emergency exits and other tenant protection measures.
- What are the sanctions if the CIN is not requested?
Fines can vary from 800 to 8.000 euros, with the possibility of further fines of up to 5.000 euros for lack of safety requirements.
- What happens if the CIN is not obtained within the established deadline?
The property cannot be advertised for short-term rentals and you will be subject to administrative sanctions.
- Is flat rate tax compulsory for short-term rentals?
No, the flat rate tax is an optional regime; the lessor can choose to tax short-term rental income at ordinary IRPEF rates.
- What are the advantages of flat rate tax for short-term rentals?
The main advantages include the simplicity of tax management and the fixed rate, which replaces the IRPEF and related surcharges.
- Can I apply the flat rate tax on a property rented several times a year?
Yes, as long as each individual rental contract does not exceed 30 days and the limit of four apartments rented in the year is not exceeded.
- Is it possible to switch from the ordinary regime to the flat rate tax regime during the tax year?
No, the choice of flat rate tax must be made for each contract within the deadlines for submitting the tax return.
- What happens if you rent a property for more than 30 days?
If the lease exceeds 30 days, it is no longer considered short and follows ordinary tax rules, including mandatory registration.
- Does the flat rate tax replace the IMU?
No, the flat tax replaces the IRPEF on rental income and the related surcharges, but not the IMU.
- Can I rent more than four apartments with the flat rate tax?
No, once the limit of four apartments has been exceeded, the business is considered entrepreneurial and it is no longer possible to apply the flat rate tax.
- What should I do if I manage short-term rentals via an online platform?
You must ensure that the platform transmits the contract data to the Revenue Agency and applies the 21% withholding tax.
- Does the 21% withholding tax also apply to ancillary services offered with the rental?
Yes, the 21% withholding tax applies to the entire gross consideration indicated in the contract, including payment for ancillary services.
- What obligations does an intermediary not resident in Italy have?
Non-resident intermediaries must appoint a tax representative in Italy or act through a permanent establishment to fulfill tax obligations.
- Can I request a refund of the 21% withholding tax?
Yes, if the withholding tax was applied in excess of the tax due, it is possible to request a refund through the tax return.
- What is the deadline for transmitting data to the Revenue Agency?
The transmission must be carried out by 30 June of the year following the year in which the contract is concluded.
- Is it mandatory to register a short-term rental contract?
No, it is not mandatory to register short-term rental contracts, unless they are formed by public deed or authentic private agreement.
- Are online platforms required to transmit contract data?
Yes, the platforms that facilitate the conclusion of the contract must transmit the data to the Revenue Agency.
- Can I use the flat rate tax for subletting?
Yes, the dry tax can also be applied to income deriving from subleases, provided that the contract falls within the parameters of short-term rentals.
- Are short-term rentals subject to VAT?
Short-term leases are not subject to VAT if stipulated by natural persons outside the exercise of business activities.
- What taxes are paid if you do not opt for the flat rate tax?
If you do not opt for the flat rate tax, rental income is subject to IRPEF and the related surcharges, according to progressive rates.
- Is it possible to request the CIN at any time?
Yes, the CIN can be requested via the national platform, but it is mandatory to do so within the established deadlines to avoid sanctions.
- Can I rent a single room with a short-term lease?
Yes, it is possible to rent a single room within a home with a short-term rental contract.
- Is it necessary to declare income deriving from short-term rentals?
Yes, income deriving from short-term rentals must be declared, regardless of the choice of flat rate tax or the ordinary tax regime.
- What sanctions apply for failure to transmit contract data?
The omitted, incomplete or unfaithful communication of data can be sanctioned with an amount ranging from 250 to 2.000 euros.
- How is the flat rate tax amount calculated?
The amount of the flat rate tax is calculated by applying the rate of 26% or 21% on the entire amount of the rent received.
- Is it possible to offset the excess withholding tax paid?
Yes, the excess withholding tax can be offset via the F24 form, using the specific tax codes indicated by the Revenue Agency.
- What should I do if I rent a property for less than 30 days but also provide services such as breakfast?
If you offer additional services such as breakfast, the business may be considered entrepreneurial and no longer falls into the short-term rental category
- How can I demonstrate that the property meets safety requirements?
It is necessary to keep all documentation relating to the property's compliance with safety regulations, which may be requested in the event of checks.
- Does the flat tax also apply to rentals of properties abroad?
No, the flat tax applies only to properties located in Italy.
- Is it possible to use the flat rate tax for guesthouse rentals?
No, rentals for guesthouse use cannot benefit from the flat rate tax as they are intended for the exercise of a business activity.
- What happens if the withholding tax is not paid by the intermediary?
In case of failure to pay the withholding tax, the intermediary is subject to administrative sanctions and can make use of voluntary reform to remedy the non-compliance.
- Is it necessary to keep documentation of short-term rentals?
Yes, it is necessary to keep all the documentation relating to short-term rental contracts for the period required for the notification of an assessment notice.
- How are contract data transmitted to the Revenue Agency?
The data must be transmitted through the Revenue Agency's electronic services, following the technical specifications published on the official website.
- What are the risks if the short-term rental business is not in order?
The risks include administrative sanctions, high fines, and the possibility of having the activity classified as entrepreneurial, resulting in increased taxation.
- Is it possible to deduct expenses incurred for short-term rentals?
No, if you opt for the flat rate tax, it is not possible to deduct the expenses incurred for the rental, unlike the ordinary regime
- Do intermediaries always have to apply the 21% withholding tax?
Yes, intermediaries who collect or intervene in payments must apply a withholding tax of 21% on the gross amount indicated in the contract.
- What data must be included in the intermediaries' communication?
The name, surname and tax code of the lessor, the duration of the contract, the address of the property and the amount of the gross consideration must be communicated.
- Is it possible to change the tax regime of a contract already in progress?
No, once you have chosen the tax regime for a contract, it is not possible to change it during the period of validity of the contract itself.
- What to do in case of incorrect data transmission to the Revenue Agency?
In case of incorrect data transmission, it is possible to rectify the communication using the electronic methods prepared by the Revenue Agency within 15 days of the deadline.
Here are ten practical examples that cover different situations relating to short-term rentals and the application of flat rate tax
Example 1: Renting a House by the Sea for the Holidays
Scenario: An owner of a beach house decides to rent it to tourists during the summer. Each rental contract has a duration of 7-14 days.
Application: The owner can opt for the flat rate tax with a rate of 26% on the income deriving from these rentals. Since he rents the same house for several short contracts, registration of the contract is not necessary and he can declare income in the annual tax return
Example 2: Renting a Room in an Apartment
Scenario: The owner of an apartment lease decides to sublet a room for 20 days to a student who is attending an intensive course.
Application: The contract holder can opt for the flat rate tax of 21% on the income deriving from this sublease, since it is a short rental that falls within the parameters established by law
Example 3: Management of Multiple Apartments in a City of Art
Scenario: An owner owns five apartments in the historic center of a tourist city that he rents to tourists on short-term rental contracts, each for less than 30 days.
Application: Since it exceeds the limit of four rented apartments, the activity is considered entrepreneurial. The owner must therefore register a VAT number, report the business to the municipality via SCIA and can no longer opt for the dry tax rate.
Example 4: Short Rental with Additional Services
Screenwriting: An owner rents his country house for a weekend and also offers breakfast and a bicycle rental service.
Application: In this case, the offer of additional services makes the rental a business activity, therefore it is not possible to apply the flat rate tax and the proceeds must be taxed as business income.
Example 5: Renting a House via Online Platform
Screenwriting: An owner rents his chalet in the mountains for short periods via an online platform, which entirely manages the booking and payment process.
Application: The platform is required to apply a withholding tax of 21% on the gross amount due for the rental and to transmit the contract data to the Revenue Agency. The owner will receive the net payment and must report the withholdings on his tax return.
Example 6: Short Rental for Special Events
Scenario: An owner rents his villa for 5 days during a special event in the city. The rent is quite high and includes services such as catering and event organization.
Application: The addition of services such as catering makes the rental a complete provision of services and is considered a business activity. The owner cannot opt for the flat rate tax and must tax the proceeds with the ordinary tax regime for commercial activities.
Example 7: Short-term flatmate rental
Scenario: Two roommates share a rented apartment and decide to sublet their third room for two weeks during the summer.
Application: Roommates can opt for the flat rate tax of 21% on the proceeds deriving from the sublease, as long as the duration of the contract does not exceed 30 days. Both will declare their share of income in the annual return.
Example 8: Rental of a House for Temporary Workers
Scenario: A company contacts an owner to rent his house for 15 days, assigning it to one of his employees on secondment.
Application: Since the contract is stipulated by the company and not by a natural person for residential purposes, it does not fall within the discipline of short-term rentals and it is not possible to apply the flat rate tax. The owner will have to apply ordinary taxation on the income deriving from this rental.
Example 9: Subletting an Apartment during the Summer Holidays
Scenario: A tenant rents an apartment in Rome, but decides to sublet it during the summer holidays for an entire month.
Application: The tenant cannot opt for flat rate tax in this case, because the duration of the contract exceeds 30 days. He must therefore follow the ordinary taxation on income from sublease.
Example 10: Short-term rental of a property for cultural events
Screenwriting: An owner rents a loft in the center of Milan for 7 days to a group of artists participating in a cultural festival.
Application: The owner can opt for the dry tax rate of 26% on the income deriving from the rental, since the contract is short-term and does not include services that qualify the activity as entrepreneurial.
Here is the updated summary of the regulatory references for short-term rentals, provided:
- Presidential Decree n. 600/1973
– **Common provisions regarding the assessment of income taxes**: This decree establishes the general rules for the assessment of income taxes, including those deriving from short-term rentals. It also regulates the data transmission obligations and the control methods by the Revenue Agency.
[Access the full text of Presidential Decree n. 600/1973]
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getSommario&id=%7b178F0CBC-1969-49F3-974E-7C0E87B9A568%7d)**
- Presidential Decree no. 917/1986 (TUIR)
Consolidated Income Tax Law: Regulates the taxation of income in Italy, including the treatment of income deriving from short-term rentals. The TUIR establishes the IRPEF rates and the related surcharges, applicable to rental income if you do not opt for the dry tax rate.
[Access the full text of Presidential Decree n. 917/1986](https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getSommario&id=%7b31D694E8-4398-4030-873B-FEAF5A6647F9%7d)**
- Legislative Decree n. 471/1997
– Regulation of sanctions in the event of tax non-compliance: Regulates sanctions for the omitted, incomplete or unfaithful communication of data relating to short-term rental contracts and for failure to apply the 21% withholding tax by intermediaries.
[Access the complete text of Legislative Decree no. 471/1997]
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getSommario&id=%7b801545C2-D10E-4D66-88A5-E96B883E6AEE%7d)**
- Presidential Decree n. 322/1998
-Methods of submitting income tax returns: Regulates the methods of submitting returns, including the substitute tax deriving from short-term rentals, such as the flat rate tax.
[Access the full text of Presidential Decree n. 22/1998]
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getSommario&id=%7b7E1625EF-3F0C-4E42-975A-F50F9219A751%7d)**
- Legislative Decree n. 23/2011
Dry tax on rentals: Regulates the application of dry tax on rentals, including short-term rental contracts. The flat tax is a substitute tax that allows you to apply a fixed rate on rental income, simplifying taxation compared to the ordinary regime.
Access the complete text of Legislative Decree n.23/2011]
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getArticolo&id=%7b8FF32A98-3825-437F-8FA7-70C036912C4E%7d&codiceOrdinamento=200000300000000&articolo=Articolo%203)**
- Law Decree n. 50/2017
Tax regime of short-term rentals and obligations for intermediaries:
Converted with amendments by law 21 June 2017, n. 96, regulates the tax regime of short-term rentals and introduces specific obligations for real estate intermediaries, including those who operate online, such as the obligation to apply a 21% withholding tax on rents and to communicate contract data to the Revenue Agency.
Access the complete text of Legislative Decree no. 50/2017
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getArticolo&id=%7b2EDE8235-A582-4D43-B44B-7A62D72DEECF%7d&codiceOrdinamento=200000400000000&articolo=Articolo%204)**
- Revenue Agency Resolution no. 88/E of 5 July 2017
Tax code for withholdings on short-term rental contracts: Establishes the tax code "1919" for the payment of withholdings of 21% on short-term rental payments collected by intermediaries.
[Access the full text of Resolution no. 88/E of 5 July 2017](https://def.finanze.it/DocTribFrontend/getPrassiDetail.do?id=%7b7A447502-421E-4102-B996-CC63D0A2B915%7d)**
- Revenue Agency provision of 12 July 2017
Obligations of real estate intermediaries: Details the obligations that must be carried out by intermediaries who carry out real estate brokerage activities, including online platforms, with regard to short-term rentals.
Access the full text of the Measure of 12 July 2017]
(https://www.agenziaentrate.gov.it/portale/web/guest/-/provvemento-del-17-marzo-2022)**
- Revenue Agency Circular no. 24/E of 12 October 2017
– Clarifications on the tax regime of short-term rentals: Provides clarifications on the application of the tax regulations regarding short-term rentals, including details on the requirements necessary to benefit from the flat rate tax and the obligations for intermediaries.
[Access the full text of Circular no. 24/E of 12 October 2017](https://def.finanze.it/DocTribFrontend/getPrassiDetail.do?id=%7bBC3A7E24-6656-452E-9FFF-248074A39845%7d)**
- Law no. 178/2020 (2021 Budget Law)
– Maximum limit of apartments for flat rate tax: Establishes the maximum limit of four apartments for the application of flat rate tax on short-term rentals. If these limits are exceeded, the activity is considered entrepreneurial.
Access the complete text of Law no. 178/2020
(https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getArticolo&id=%7bD0A14C3A-D36D-4BAA-8DC6-5425956861E8%7d&codiceOrdinamento=0000000000000010000000000000000000000000005950000000000000000000000000000000000000000000000000000000000000000000000000000000000000&articolo=Articolo%201%20com%20595)**
- Law n. 213/2023
Changes to the tax regulations for short-term leases: Introduces changes to the tax regulations for short-term leases, applicable from 1 January 2024, including the introduction of the National Identification Number (CIN) and further obligations for lessors and intermediaries.
[Access the complete text of Law no. 213/2023](https://def.finanze.it/DocTribFrontend/getAttoNormativoDetail.do?ACTION=getArticolo&id=%7b63CA3197-EF68-4A63-8EBE-B6923B21073E%7d&codiceOrdinamento=0000000000000010000000000000000000000000000630000000000000000000000000000000000000000000000000000000000000000000000000000000000000&articolo=Articolo%201%20com%2063)**
- Revenue Agency Circular no. 10 of 10 May 2024
Updates and news on the regulation of short-term rentals for 2024: Provides updates and clarifications on the regulation of short-term leases for the 2024 tax year, including the use of the CIN and the application of the flat rate tax.
Access the full text of Circular no. 10 of 10 May 2024]
(https://www.agenziaentrate.gov.it/portale/web/guest/-/provvemento-del-17-marzo-2022)**
Online Resources and Social Channels of the Revenue Agency
For those who wish to stay updated on the latest tax and regulatory news and to access official guides and insights, here are the Revenue Agency's online resources and social channels:
Official website of the Revenue Agency
The official website offers a wide range of online services, forms, regulations, tax guides and press releases. It is the main point of reference for official information.
[www.agenziaentrate.gov.it](https://www.agenziaentrate.gov.it)
Tax Today
Online magazine of the Revenue Agency, which publishes news, articles and insights on tax issues, with a particular focus on tax laws and regulations.
[www.fiscooggi.it](https://www.fiscooggi.it)
The official Revenue Agency page on Facebook is a useful channel for receiving quick updates, news and for interacting with the Agency through comments.
[Revenue Agency on Facebook](https://www.facebook.com/agenziadelleentrate/)
The Revenue Agency's Twitter profile is ideal for following real-time updates on deadlines, new regulations and official press releases.
[Revenue Agency on Twitter](https://twitter.com/Agenzia_Entrate)
YouTube
The Revenue Agency's YouTube channel offers video guides, tutorials, webinars and press conferences on tax and regulatory topics.
[Revenue Agency YouTube channel](https://www.youtube.com/user/Entrateinvideo)
The Revenue Agency's LinkedIn profile is a professional option to follow institutional updates and connect with other professionals in the tax sector.
[LinkedIn profile of the Revenue Agency](https://www.linkedin.com/company/agenzia-delle-entrate/)