Short-term rentals and tax declaration

Managing a short-term rental home in Milan – perhaps on Airbnb or Booking – is an excellent way to earn extra income, but there is one aspect that should never be overlooked: the tax declaration.
Often, those who start renting a house for a few days or weeks are not clear on how to handle the tax part. That’s why today, as IHOST SRL – a partner specialized in the complete management of short-term rentals – we want to explain to you in a simple and updated way everything you need to know on the subject.

Short-term rental: what does it really mean?

To be considered a “short-term rental“, the contract duration must not exceed 30 days and must be stipulated between individuals, outside of a business activity.

You can rent:

• the entire apartment
  
• a single room
  
• even through subletting or loan for use

…but always respecting the 30-day limit for each contract.

You can also offer services like:

• linen
  
• cleaning
  
• wi-fi
  
• utilities

But you must not provide “hotel” services like breakfast, car rental, or guided tours: in that case, the activity would be considered entrepreneurial and the tax rules would change.

How taxation works: the flat tax

For short-term rental contracts, you can choose to tax the earnings with a system called flat tax.

• It is a substitute tax: instead of Irpef, additional taxes, registration and stamp duties
• It applies to the entire rental amount (without deductions).
• It allows you to greatly simplify the tax declaration

What rate applies?

• 26%: if you rent more than one property with short-term contracts
  
• 21%: if you choose to apply the flat tax only on one property per fiscal year

N.B.: You must clearly indicate which property benefits from the reduced rate in the tax declaration.

How many properties can I rent with the flat tax?

The law states that up to 4 apartments per year you can use the flat tax.
From the 5th property onwards, the activity is considered entrepreneurial. This means you should:

• open a VAT number
  
• change the tax regime
  
• manage the activity in a more structured way

How and when to declare income from short-term rentals

The option for the flat tax must be exercised in one of these ways:

1. Directly in the tax declaration (730 or Income PF), relating to the year in which you received the rents
   
2. During voluntary registration of the contract (even if contracts under 30 days are not mandatory to register)

Did you rent through a platform like Airbnb?

If the platform acted as a tax intermediary, then it may have already withheld a portion of the tax (21% withholding) and communicated everything to the Revenue Agency.
In this case, you will need to correctly indicate the data in the declaration and keep in mind that the withholding can be “offset” against the tax to be paid.

And if the apartment is co-owned?

If the contract is in the name of only one of the co-owners, and therefore the withholding was only applied to him, the others will still have to declare their share of income, choosing whether or not to apply the flat tax.

What should be indicated in the tax declaration

When filling out the declaration, remember to include:

• The cadastral data of the rented property
  
• The address and, if applicable, the details of the registered contract
  
• The choice of tax regime (flat tax or ordinary regime)

For subletters and borrowers, income must be declared as “other income” and not as land income.

Attention to the effects on total income

Even if income from the flat tax is not included in Irpef, it is still considered in the ISEE calculation and can affect deductions and bonuses (such as family allowances, deductions for dependent children, tax benefits).