Taxation of rental income

Of course, in Italy income from private holiday rentals is also subject to income tax. This must either be paid through a withholding tax or declared in the annual income tax return. That’s the theory. In practice, random checks by the Italian tax authorities have shown that no more than 25% of rental income from holiday lets has actually been declared in the past.

For this reason, a law came into force on June 1, 2017, aimed at cracking down on undeclared rentals. Since then, agencies and online rental platforms have been responsible for automatically withholding a flat tax of 21% of the rental price and paying it to the tax office on behalf of the owners.

Of course, this law has not completely stopped undeclared holiday rentals, especially since many properties are still rented out through personal contacts. Moreover, the law has so far failed to fully impose these obligations on the major international booking platforms. Therefore, if you rent out your property independently through such portals, you remain personally responsible for paying the resulting taxes in full and on time.

Attention!
Penalties for unpaid or late-paid taxes range from €250 to €2,000, though the fine is reduced by 50% if payment is made within 15 days. Property owners renting out their homes at Lake Garda through these channels should always check carefully whether the agencies or platforms they use are actually complying with these tax obligations. Otherwise, it is strongly recommended to appoint a tax advisor to ensure that all taxes due on rental income are properly and punctually paid.