Italy Retains Tax Break for Short-Term Rentals Amid Political Resistance

Italy's ruling parties have opted to maintain a tax break on short-term rentals amid resistance. Initially proposed to increase long-term housing, the measure faced opposition from key coalition partners. Instead, the threshold for landlords registering rental activity as a business will be lowered, affecting taxation.

In a significant political move, Italy's ruling parties have decided to retain a tax break on short-term rentals, retracting earlier plans to eliminate it as part of the 2026-2028 budget amendments. The decision comes after facing opposition from key coalition partners including the League and Forza Italia.

The proposed tax change aimed at encouraging rentals to long-term residents was met with resistance, leading to high-level discussions led by Prime Minister Giorgia Meloni and Economy Minister Giancarlo Giorgetti. Instead, the ruling parties agreed to adjust the registration threshold for landlords, potentially increasing taxation on certain rental activities.

Currently, landlords managing more than four properties are subject to business taxation, but the coalition plans to lower this threshold to more than two properties. The broader 2026-2028 budget remains subject to parliamentary review and is anticipated to pass by December's end.