Cedolare Secca: The Flat Tax Regime for Rental Income in Italy (2025 Guide)

If you’re a private property owner—whether a resident, foreign national, or non-resident with rental income in Italy—the cedolare secca regime might be the key to simpler, more predictable tax payments. Cedolare secca, which translates as “dry coupon,” is Italy’s optional flat tax scheme for individuals renting out residential real estate. It streamlines compliance and can provide significant savings compared to the standard, progressive tax rates.

What Is Cedolare Secca?

Cedolare secca allows qualifying landlords to pay a flat tax on their gross rental income—21% in most cases, or 10% for specific “protected” contracts or high-demand areas. This flat rate entirely replaces progressive personal income tax (IRPEF – Imposta sul Reddito delle Persone Fisiche) and all associated local surcharges. Plus, landlords choosing cedolare secca are exempt from registration tax and stamp duty (normally due when registering a rental contract).

Who Is Eligible?

• Landlord: Must be a private individual, not a company or business.
• Tenant: Must be a private individual living in the property (residential use only). Offices and commercial units (cadastral category A/10) are excluded.
• The property must be registered in the Land Registry (Catasto) as residential.
• The cedolare secca option must be included in the rental contract when registering it.
• Non-residents: Foreign property owners are also eligible if the above criteria are met.

Cedolare secca is not available for company rentals, commercial leases, or contracts where the tenant uses the home for their business/profession.

How Cedolare Secca Works in 2025

Main tax rates:

• 21%: Standard rate for most private residential leases.
• 10%: For contratti a canone concordato ("agreed rent" contracts) in high-demand (comuni ad alta tensione abitativa) or for "protected" tenancies—when certain legal requirements are met.
• 26%: May apply for short-term rentals if you let multiple properties in a tax year.

• All gross rent is taxed: No deductions are allowed for management costs, repairs, agent commissions, or mortgage interest.
• No local surcharges: The flat tax replaces any Italian regional or municipal surcharges connected to IRPEF.
• No registration or stamp duty: Exempt for both contract registration and renewals, saving extra fees and paperwork.
• No rental increases: While cedolare secca applies, you cannot raise the rent—even for inflation—during the contract period.

Cedolare Secca vs. Ordinary IRPEF Regime

What’s Different?

• Tax Rate: Cedolare secca uses a fixed 21% (or 10%) rate vs. IRPEF’s progressive rates from 23% up to 43%.
• Expense Deductions: No deductions allowed under cedolare secca. Under IRPEF, you may deduct allowable expenses (maintenance, interest, agent fees, etc.).
• Local Taxes: Not applied with cedolare secca, but always applied under IRPEF.
• Stamp and Registration Duty: Not applied under cedolare secca, always payable under IRPEF.
• Rent Adjustment: Forbidden under cedolare secca, allowed with IRPEF, including annual adjustment for inflation (ISTAT index).
• Who Can Use: Cedolare secca is only for individuals (including non-resident private owners); IRPEF applies to both individuals and companies.

Main Advantages of Cedolare Secca

• Simplicity: Flat rate makes it easy to calculate taxes due.
• No extra bureaucracy: No registration or stamp duties for contract registration or renewal.
• Lower overall tax: Particularly beneficial if your overall income would push your rental income into higher IRPEF tax brackets.
• Predictability: You know your tax liability in advance, avoiding unpleasant surprises.
• No local taxes: Save money by avoiding regional and municipal IRPEF surcharges.

Main Drawbacks and Limitations

• No expense deductions: Unlike IRPEF, you cannot offset any costs—so if your property is costly to maintain or you pay high agency fees, your net tax bill could be higher.
• No rent increases allowed: You lose the right to update rent for inflation or any other reason while cedolare secca is in effect.
• Only for residential leases: Cedolare secca is not an option for office or commercial properties.

Special Cases and Considerations

• 10% rate eligibility: Restricted to contratti a canone concordato (regulated contracts) or properties in comuni ad alta tensione abitativa. Specific documentation and criteria are required to claim this rate.
• Short-term rentals: For tourist lets of 30 days or less, the rules differ. If you rent out multiple properties this way, a higher flat rate of 26% may be due; check whether your rental style qualifies.
• Non-resident landlords: You can elect cedolare secca if your rental property is in Italy, including if you live outside the EU, as long as you meet the same conditions as residents.
• Registration and deadlines: The cedolare secca choice must be made when registering the contract (usually within 30 days of signing) and reiterated with each annual tax return.

Summary: Is Cedolare Secca Right for You?

Cedolare secca is an appealing, simplified flat-tax solution for private landlords letting residential property. It’s particularly attractive for foreign and non-resident owners seeking clarity, predictability, and less red tape. That said, if you incur high deductible expenses or wish to retain the right to update rents, consider running the numbers under both cedolare secca and ordinary IRPEF before deciding.

Navigating Italian property taxes doesn’t need to be stressful. ItalianTaxes.com offers a secure, technology-driven platform for non-residents and expats to file and pay Italian taxes online—faster, paper-free, and always compliant with current regulations. Ready to simplify the way you pay property tax in Italy? Get started with ItalianTaxes.com today and file your Italian rental income return the easy way.

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