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Italy crackdown targets 1 billion euros in undeclared short-term flat rental tax

Published 30/10/2023, 15:29
© Reuters. A view shows Milan's skyline during sunset in Milan, Italy, July 6, 2023. REUTERS/Claudia Greco/ File Photo
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ROME (Reuters) - Italy plans to crackdown on landlords who do not pay taxes on short-term flat rentals such as those made through platforms like Airbnb, politicians said on Monday, in a move that could boost fiscal revenue by 1 billion euros ($1.06 billion).

After a meeting between key coalition figures over the 2024 budget, the co-ruling Forza Italia party said in a statement that Italy planned to introduce a national identification code to be used for short-term rentals.

"That code will bring out the revenue of those who rent flats without declaring them. This will lead to more money in the state coffers which will go to reduce the tax burden," Deputy Prime Minister and Forza Italia leader Antonio Tajani told reporters.

Airbnb has been criticised for contributing to a shortage of affordable housing for residents in some of the world's most popular tourist destinations, prompting some cities to tighten regulations.

Tajani has also said that the government plans to increase the rate of tax charged when people let out more than one flat.

Italian legislation allows owners to rent out their apartments and pay tax of 21% on the earnings.

However, Prime Minister Giorgia Meloni intends to tax income from the short-term rental of additional apartments by the same landlord at 26%.

The government however has scaled back its plans, as a draft of the budget reported by Reuters on Saturday showed that the 26% rate would have applied to the short-term rental of more than one apartment in each tax period, including the first flat.

© Reuters. A view shows Milan's skyline during sunset in Milan, Italy, July 6, 2023. REUTERS/Claudia Greco/ File Photo

Meloni's office said in a separate statement that the budget bill would be presented to parliament by the end of Monday. The approval process is expected to take until December.

($1 = 0.9428 euros)

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