What is the cedolare secca
The cedolare secca is an optional substitute-tax regime for income from renting residential properties in Italy. Instead of adding rental income to total IRPEF income (with progressive rates), a fixed proportional tax is applied that replaces IRPEF, regional and municipal surtaxes, and the registration and stamp duty on the lease contract.
The cedolare secca rates
- 21%: for free-rent contracts (standard 4+4-year leases)
- 10%: for regulated-rent contracts in high-density municipalities (with a territorial agreement between trade associations)
- 10%: for contracts for university students living away from home
When the cedolare secca is more convenient
The cedolare secca is more convenient when the landlord's marginal IRPEF rate (applied to the last tax band) exceeds the flat-tax rate. Since the first IRPEF band (23%) applies from the first euro of additional income, the 21% cedolare secca is almost always more convenient.
The 10% rate (regulated rent) is practically always advantageous, even at very low incomes, and can be combined with the benefits of regulated rents (ISTAT indexation rules, minimum contract duration, tenant deductions).
Disadvantages and limitations
- Only for residential properties (not commercial premises, standalone garages, or offices)
- It is not possible to update the rent to the ISTAT index during the period of cedolare secca
- Once you opt out, you can only re-enter from the following tax year
- Not applicable to short-term rentals by sole traders
How to opt for the cedolare secca
The option is exercised in the lease registration form (RLI model) submitted to the Agenzia delle Entrate, either in person or online. For existing contracts, the option can be exercised at the annual renewal of the contract.