Two clues are starting to be more than a coincidence. While waiting for the third, which could provide proof and might arrive with tax payment data for the summer months, the flat-rate tax on rents continues its downward trend. 2025 closed with an overall decrease of 2.2%, settling at 4.69 billion euros (see “Il Sole 24 Ore del Lunedì” of March 30), which above all represents the first reversal of trend after 13 years of continuous growth. The first five months of 2026 follow the same path: the total revenue from the flat tax on residential leases stood at 318 million, representing a 25.5% decrease (-109 million) compared to the same period in 2025, although in May the trend was positive with an increase of 4 million compared to the previous year’s figure.
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The 10% rate on agreed-rent contracts
What could produce this effect? Let’s make it clear immediately that to have a detailed picture, we will have to wait at least for the details of the 2026 declarations (relating to the 2025 tax year), which are currently being submitted (form 730 expires on September 30, while the Redditi model on November 2). Among the hypotheses, there could be a shift effect of the flat-rate tax from the 21% rate for market-rent contracts to the 10% rate for agreed-rent lease contracts. It should be remembered that there are well-defined constraints for using the 10% flat-rate tax on the latter. In fact, the reduced rate for agreed-rent contracts can be applied to contracts signed in large cities (Bari, Bologna, Catania, Florence, Genoa, Milan, Naples, Palermo, Rome, Turin, and Venice), in neighboring municipalities, in other provincial capitals, and in other smaller centers with high housing tension identified by Cipe. Furthermore, the 10% flat-rate tax can be applied in municipalities for which a state of emergency was declared in the five years preceding May 28, 2014, and in municipalities affected by the 2016 earthquake in Abruzzo, Lazio, Marche, and Umbria. Within this perimeter, a shift towards the 10% rate may have resulted in less revenue. Naturally, the “power dynamics” must always be considered: from the 2025 declarations, it emerges that owners who paid the 21% rate are approximately 2 million, while those with the 10% rate are, instead, 1.1 million.
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The shift towards short-term rentals
Then there are at least two other variables that will need to be investigated, should the third clue also be confirmed with the summer payment data (2025 balance and first installment 2026). On the one hand, how much has the shift from long-term residential rentals to solutions more oriented towards the tourist market (short-term rentals) impacted. Here too, the latest available figures from the 2025 declarations showed a flop of the 26% rate that applies from the second home intended for short-term rentals, with just 17 million euros in increased revenue. It remains to be seen what will happen with the crackdown that started on January 1st, which imposes the obligation of a VAT number from the third home (and no longer from the fifth as before).
Market trend
The other variable is related to how much the perimeter of vacant properties is expanding and, conversely, how many properties for which the lease remains undeclared, thus generating tax evasion. From this latter perspective, however, it should be noted that the update of the latest report on the unobserved economy and tax and contribution evasion indicates an improvement in the tax gap related to rentals for 2023: in absolute value, 773 million against the 875 calculated for 2022, and in relative terms, 8.6% against the previous 10.1 percent.
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