New Flat Tax Circular: Changes in Rental Home Tax Rates Explained

The new flat tax with a rate of increase to 26% will only apply starting from the second rented house. Nothing changes, however, for the first or only rental home, with the rate remaining at 21%. This is clarified by a new circular from the Finance Agency, which implements the measures of the latest Budget law. The owner who rents several homes will be able to choose one for each tax period for which he will benefit from the preferential rate of 21%. The option must be indicated in the tax return for that tax period. The new rate of 26% applies to accrued rental income from 1 January 2024, regardless of the date the relevant contracts were signed and the fees received.

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The mediators

New rules also for real estate intermediaries and electronic rental portal managers who, when paying the landlord, must operate, as tax withholding agents, a withholding tax of 21% as a deposit regardless of the tax regime adopted by the beneficiary. .
The Agency also sets out the rules for non-resident intermediaries. Individuals who live in a different state in the European Union and do not have a permanent establishment in Italy can fulfill the obligations directly or appoint a tax representative in Italy. Non-EU entities that have a permanent establishment in a Member State of the Union fulfill the obligations through the permanent establishment and, without this, must appoint a tax representative.

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VAT numbers

As clarified by the Court of Cassation, the dry tax can also be applied when the tenant is a company, VAT number or a company that rents a house to employees, purchasing or suppliers. The requirement to rent the property outside of business, artistic or professional activities applies to the tenant only, contrary to what has been supported by the Financial Group in the last 13 years. The sentence, submitted on May 7, considers the “inadequacy of the quality of the tenant and the ease of the lease, where it is for residential use, to the professional activity of the tenant.” accept”.