There Budget law 2024 has introduced some important innovations on the subject of flat rate tax for short-term rentals. In particular, in accordance with the provisions of last January 1st the rate went from 21 to 26 percent. But be careful: the higher taxation only concerns the second, third and fourth house rented. In the case of a fifth property rented, it is necessary to open the VAT number. But since when should the increase in the rate be taken into account? The answer was provided by the IRS. Please also remember that short-term rental means a rental contract for a property for residential use for a duration of no more than 30 days.
TO Tax Today, the online magazine of the Revenue Agency, was asked: Since when must the increase in the rate to 26% regarding the flat rate tax be taken into account? If the short-term rental contract was stipulated at the end of 2023 with expiration in January 2024, is the 21% rate still applicable?”.
What will change in 2024 for short-term rentals?
In providing its response, the Tax Office recalled that the new provisions which provide for a increase in the substitute tax in the form of dry coupon apply starting from 1 January 2024, when article 1, paragraph 63, of law no. came into force. 213/2023 (Budget law 2024).
It is precisely in these days that a circular from the Revenue Agency (la circular no. 10/2024) with which a clarification was made:
- regardless of the date of signing of the contracts and the receipt of the rents, the substitute tax of 26% is due on income deriving from short-term rental contracts accrued starting from 1 January 2024 (according to the principle of pro-rata temporis, based on article 26 of the TUIR).
The new rate of 26% it therefore applies to rental income accrued from 1 January 2024regardless of the date of stipulation of the relevant contracts and the receipt of the fees.
However, it is important to remember that therate of the flat tax substitute tax will be applied to 26% starting from the second property leased. The owner who rents out several units therefore has the possibility of choosing one for each tax period for which to benefit from the reduced rate of 21%. The choice must be indicated in the tax return relating to the tax period of interest.
When is the flat rate tax paid on short-term rentals in 2024?
The flat tax can be paid in a single payment by 30 November of the reference year, if the amount is less than 257.52 euros. Instead, it must be paid in two installments if the amount due is greater than 257.52 euros: the first, of 40%, must be paid by 30 June; depending on the remaining 60%, by November 30th.
