HOW TO HOST RESPONSIBLY IN ITALY
Among the most tedious topics in the magical world of vacation rentals, there is undoubtedly that relating to tax returns. What procedures must I follow to consider myself a truly responsible host in Italy?
Let's find out together...
SHORT TERM RENTALS: DEFINITION
The term short-term rentals refers to residential properties rented for periods not exceeding 30 days.
The lease must necessarily be stipulated:
- With a regular contract (you can do it independently or through other intermediaries)
- The landlord does not have to be a professional in the sector
Please note! The 30 days refer to the rental of the property to a single person and are to be considered as a total sum during the year. Example: if you decide to rent your property to the same person for short periods during the year, make sure that the total amount of overnight stays does not exceed 30 days.
Let's move on to the sore points: how does the taxation for short-term tourist rentals work?
As a short-term vacation rental host, you can choose between two different tax regimes: the flat-rate tax or the ordinary regime . Let's see the differences below:
Cedolare secca : also called a subsidized regime, it is a fixed tax of 21% that replaces the Irpef and the various municipal and regional surcharges provided for on rental contracts. This is calculated on gross earnings at 100% (therefore not only the earnings given by the rent, but also by other expenses such as condominium fees).
Ordinary regime : Irpef taxation, unlike the flat rate tax, does not have a single percentage, but varies depending on the amount of your overall earnings. If you choose this tax regime, 95% of the gross rent earned is taxed.
Considering that short-term tourist rentals generally represent an extra income compared to your normal work activity, the advice is always to rely on a good accountant to choose the tax regime that best suits your needs.
Online intermediaries such as Airbnb and Booking and the tax regime
This paragraph opens a rather thorny chapter. In fact, it is important to know that in 2017 an important innovation was introduced regarding online intermediaries who would be required to comply with two obligations:
- Declarative: declare all data relating to tenants to the Revenue Agency
- Fiscal: as they would have the function of real tax substitutes. Therefore it would be up to them to apply a 21% withholding tax on the sums received from the tenant.
This was supposed to be a good solution to curb tax evasion and at the same time facilitate the development of the sector. In fact, these intermediaries do not deal with these procedures.
It is therefore the hosts' duty to ensure that the stay experience they are going to offer is on the one hand comfortable and unique and, on the other, fiscally correct.
To recap:
- Short-term rental contracts can only be stipulated if the owner of the property is not a professional in the sector
- Contracts do not need to be communicated to the Revenue Agency as they are for periods of less than 30 days
- Earnings derived from rentals must be declared either through the Single Form or the 730
- You can choose between two different tax regimes: the flat rate tax with a fixed rate of 21% or the ordinary regime with a variable rate.
- Online intermediaries ensure you success and secure income for your accommodation but they are not also financial intermediaries
B&B Tips:
- Need help with rental receipts and contracts? Read the dedicated article
