Italy's Reversal on Tax Breaks: A Victory for Short-Term Rental Hosts

Italy's government has decided to maintain a tax break on short-term rentals, largely benefitting platforms like Airbnb. The move was prompted by coalition partner opposition. However, stricter business registration rules are anticipated for landlords with multiple properties.

Italy's government has opted to retain a tax advantage for short-term rental properties, a move cheered by stakeholders in the tourism sector. The decision was made following resistance from Prime Minister Giorgia Meloni's coalition partners, including the League and Forza Italia.

The proposed amendment, which aimed at encouraging long-term tenancy over short-term rentals, was widely criticized for potentially affecting middle-class homeowners and fostering tax evasion. As it stands, landlords will continue to enjoy a reduced 21% tax rate on rental income from a single short-term property instead of the usual 26%.

The decision follows a series of discussions led by Meloni, along with the Economy Minister and ruling party leaders. Despite preserving the tax break, new legislation proposes to lower the threshold for registration as a business, impacting landlords with more than two properties.

(With inputs from agencies.)