Cedolare Secca for Foreign Landlords 2026: 21% vs 26% Which Works for You

Cedolare Secca for Foreign Landlords 2026: 21% vs 26% Which Works for You

Cedolare secca (Italian flat-rate tax for rentals) is one of the few tax instruments where a non-resident UK or US landlord can pay less than an Italian resident. Below we compare the 21% and 26% rates, explain when foreigners may elect cedolare, and contrast it with IRPEF (Italian progressive income tax) using real numbers.

Cedolare secca was introduced by art. 3 D.Lgs. 23/2011 and substantially expanded for short-term rentals by DL 50/2017 art. 4. After the 2024 Italian budget law (Legge di Bilancio 2024 art. 1 co. 63) the regime now sets a 21% flat rate on the first short-term-let property and 26% on properties two through four. For a non-resident with a single Italian holiday let, this typically halves the tax bill compared with IRPEF.

The Two Rates Explained: 21% Versus 26%

Under the current rules in force since 1 January 2024:

• 21% cedolare secca: applies to the first STR property nominated by the landlord. You choose which one if you have several. Best practice: pick the highest-revenue unit.
• 26% cedolare secca: applies to STR properties two through four. From the fifth property onward, cedolare is no longer available and you must register a P.IVA (Italian VAT and business number) and switch to imprenditoriale taxation.

The 26% rate is still attractive compared with IRPEF, which on Italian rental income for non-residents starts at 23% on income up to EUR 28,000 and climbs to 43% above EUR 50,000, plus regional and municipal addizionali of roughly 2 to 3 percentage points.

Can a Non-Resident Elect Cedolare Secca

Yes. Cedolare secca is open to any individual landlord regardless of tax residence, provided the property is in Italy and the rental does not constitute commercial activity. The Agenzia delle Entrate confirmed in Circolare 26/E/2011 and Risoluzione 39/E/2018 that non-residents may elect cedolare on Italian STR income.

Key constraints for foreign landlords:

• Election is per contract: short-term lets under 30 days do not require contract registration, but you elect cedolare in your annual Modello Redditi PF (or the dedicated 730 if you also have Italian employment income, which is rare for non-residents)
• You cannot elect cedolare if the property is held through a commercial entity (LLC, sp. z o.o., Ltd, S.r.l. owning the property)
• You cannot elect cedolare if you offer "hotel-like" services such as breakfast, daily cleaning or guided tours: those reclassify the activity as imprenditoriale and trigger P.IVA

Real Numbers: Cedolare Versus IRPEF for a UK Owner

Take a Florence apartment generating EUR 35,000 of gross rental revenue per year on Airbnb. Assume EUR 4,500 of deductible costs (cleaning, condominio, IMU, insurance) under IRPEF.

Regime	Taxable base	Tax rate	Italian tax	Net (before UK Self Assessment)
Cedolare secca 21%	EUR 35,000 (gross, no deductions)	21%	EUR 7,350	EUR 27,650
Cedolare secca 26%	EUR 35,000 (gross, no deductions)	26%	EUR 9,100	EUR 25,900
IRPEF non-resident	EUR 35,000 minus EUR 4,500 = EUR 30,500	23% to 35% scale + addizionali	EUR 8,400 + EUR 700 addizionali	EUR 25,900

Conclusion: at EUR 35,000 revenue cedolare 21% saves a UK landlord around EUR 1,750 per year compared with IRPEF, and even cedolare 26% breaks even with IRPEF. For lower-revenue properties (below EUR 15,000) the gap narrows because the IRPEF deductions become proportionally larger.

How to Elect Cedolare Secca as a Non-Resident

Two steps:

1. Annual election in Modello Redditi PF: tick the cedolare option in quadro RB. Deadline: 30 November each year for the prior tax year. A commercialista typically charges EUR 250 to 500 to file Modello Redditi PF for a single STR property.
2. Pay via F24 Elide: cedolare secca is paid in two instalments, acconto by 30 June and saldo by 30 November. Codes 1840 (first instalment) and 1842 (second instalment). You can pay from a foreign IBAN through SEPA, but the F24 must be Italy-issued.

Brexit Impact for UK Owners

Brexit did not change the cedolare regime itself. UK landlords still elect cedolare on the same conditions as before 2021. However:

• The 1988 UK-Italy double tax treaty applies (art. 6 immovable property): Italy has primary taxing right and the UK eliminates double taxation through Foreign Tax Credit Relief on SA106
• You can no longer rely on EU mutual administrative assistance for VAT and tax disputes; HMRC and Agenzia delle Entrate now exchange data under DAC7 instead
• If you also operate Airbnb in another EU country, post-Brexit each country handles your tax independently with no EU-wide simplification

Imprenditoriale Threshold: When Cedolare Stops Working

The cedolare regime is reserved for non-imprenditoriale rental. The Italian Cassazione and Agenzia delle Entrate have built a body of case law on what counts as "commercial activity":

• Number of properties: from the fifth STR property the activity is automatically deemed imprenditoriale (Legge di Bilancio 2024)
• Hotel-like services: breakfast, daily room cleaning, concierge, organised tours, transfer service. Even one of these can disqualify cedolare
• Active management: hiring staff, maintaining a website with online booking, advertising as a B&B or affittacamere
• Continuity: 365-day availability with no closed season suggests business activity

Risoluzione Agenzia delle Entrate 38/E/2017 confirms that a single property let through Airbnb without ancillary services remains rental income, not commercial. Two to four properties without services keep the same treatment. From the fifth, P.IVA is mandatory.

How to Pay Cedolare From Abroad: Practical Mechanics

The F24 Elide form is the only valid payment route. Three ways to file from London or NYC:

• Through your commercialista: most common. The commercialista pre-fills F24, you SEPA the amount to their fiduciary account, they execute. Cost: included in the EUR 250 to 500 annual fee
• Direct from Italian bank account via online banking: Intesa Sanpaolo, UniCredit, BNL all support F24 in their internet banking for non-resident account holders. Free of charge if you hold the account
• Through Agenzia delle Entrate online with SPID: file F24 directly on agenziaentrate.gov.it; payment is debited from a designated Italian IBAN. Requires SPID for non-residents (see our CIN BDSR post)

Late payment generates 0.4% per month interest plus a 30% sanction. Voluntary disclosure (ravvedimento operoso) within 30 days reduces the sanction to 1.5%, within 90 days to 1.67%, within one year to 3.75%.

Common Mistakes Foreign Landlords Make With Cedolare

• Electing cedolare while offering breakfast: reclassifies activity as imprenditoriale, Agenzia delle Entrate cancels cedolare and demands IRPEF plus P.IVA back-tax
• Missing the F24 deadline: 0.4% per month interest, 30% sanction; for a non-resident this is hard to track without a commercialista
• Holding the property through an LLC: blocks cedolare entirely; corporate ownership taxed under IRES at 24% plus IRAP
• Not nominating which property gets the 21% rate: Agenzia delle Entrate defaults to alphabetical order, often the wrong choice

Frequently Asked Questions

Do I need an Italian residence to elect cedolare secca?

No. Cedolare is open to any individual landlord, resident or not, provided the property is in Italy and ownership is personal (not corporate). Confirmed in Circolare 26/E/2011 and Risoluzione 39/E/2018.

What happens if I have five or more Italian STR properties?

From the fifth property onward you must register P.IVA (Italian VAT and business number) and switch to imprenditoriale taxation. This means VAT at 10% on STR rentals, IRPEF or IRES on the profit, and INPS contributions if you actively manage the properties. The cedolare regime closes for all five.

Can I switch back from cedolare to IRPEF later?

Yes. Election is annual: you can elect cedolare for 2025 and switch to IRPEF for 2026 simply by ticking the IRPEF box in the next Modello Redditi PF. There is no lock-in period.

How does cedolare interact with my UK Self Assessment?

You declare the gross Italian rental income on SA106 Foreign Pages, then claim Foreign Tax Credit Relief equal to the cedolare paid (capped at the UK tax that would have been due on the same income). Net effect: you pay the higher of UK or Italian tax, never both. See our dedicated post on the UK-Italy double tax treaty.

Are AirCover and similar platform insurance fees deductible?

Under cedolare secca: no, because cedolare is a flat tax on gross revenue with no deductions allowed. Under IRPEF: yes, insurance and platform commissions are deductible, which is why low-revenue properties sometimes prefer IRPEF.

Do I pay IMU and TASI on top of cedolare?

Yes. IMU (Italian property tax) and TARI (waste tax) are property taxes due regardless of how rental income is taxed. For a non-resident second-home owner, IMU runs roughly 1.06% of catastal value (rivalutata 5%) and TARI follows comune-specific tariffs, typically EUR 200 to 500 per year for an apartment.

Want a clear-cut tax structure for your Italian property without juggling commercialisti from London or NYC? Check the Standard Package HostReady (Italy): full document set, autocertificazioni and step-by-step instructions tailored to non-resident UK and US owners.