What is Cedolare Secca?
Cedolare secca is Italy's optional flat-rate tax on residential rental income. Instead of including your rental income in your IRPEF return and paying progressive rates that can reach 43%, you elect cedolare secca and pay a single flat rate on your gross rental income. That flat rate substitutes for IRPEF, regional and municipal surcharges, and the lease registration tax (imposta di registro).
The regime is available only for renting residential property (apartments and houses) to individuals for personal use — not commercial rentals, not office space, not holiday rentals of commercial-grade properties.
Current Rates
| Rental Type | Rate |
|---|---|
| Standard residential contracts (4+4 years, free-market rent) | 21% |
| Canone concordato contracts (agreed rent below market rate) | 10% |
| Short-term rentals — first property | 21% |
| Short-term rentals — second and additional properties | 26% |
The distinction for short-term rentals (contracts under 30 days, including platforms like Airbnb) was introduced in 2024. If you rent out a single property short-term, you pay 21%. If you rent multiple properties short-term, the 26% rate applies to the second and subsequent properties. The platform (Airbnb, Booking.com, etc.) is typically required to withhold this tax at source for Italian-resident owners.
Note that cedolare secca for short-term rentals is limited to a maximum of four properties. If you rent five or more properties on a short-term basis, the activity is classified as a business (attivita d'impresa) and requires VAT registration — cedolare secca is no longer available.
What Cedolare Secca Replaces
Electing cedolare secca means you pay one flat tax instead of:
- IRPEF at progressive rates on the rental income
- Regional IRPEF surcharge (1.23%–3.33%)
- Municipal IRPEF surcharge (up to 0.9%)
- Registration tax on the lease contract (normally 2% of annual rent per year)
The total saving depends on your other income and tax bracket. For landlords in the 35% or 43% IRPEF bracket, the 21% cedolare secca rate offers substantial savings.
The Trade-off: No Expense Deductions
The flat rate is applied to gross rental income — you cannot deduct expenses against it. No deduction for maintenance costs, insurance, condominium fees, mortgage interest, or management fees. If your property has high running costs, run the comparison between cedolare secca and ordinary IRPEF (which allows 5% of rental income as a flat deduction) to see which is better for your situation.
Why Non-Resident Landlords Use It
Cedolare secca is particularly popular among non-resident landlords. When you're a non-resident, IRPEF still applies to your Italian rental income. The cedolare secca election simplifies your Italian tax position significantly — you pay one flat rate, the filing is simpler, and you avoid the complexity of Italian progressive rates applying on top of your foreign income situation.
To elect cedolare secca, you register the rental contract with the Agenzia delle Entrate and mark the election. The decision is made contract by contract and can be changed annually at renewal.