What is Cedolare Secca for Italian Properties?

Cedolare Secca is an Italian income tax withholding system for short-term rental hosts (such as those on platforms like Holidu) who are considered non-professional hosts. Under Law Decree 50/2017, which was amended by the 2024 Budget Law, non-professional hosts renting out properties in Italy are subject to a 21% income tax rate on their earnings from stays of up to 30 days.

Who is Affected?

The regulation applies to non-professional hosts, meaning:

• Hosts with less than 5 properties rented out short-term.
• Hosts not registered for VAT (without a valid EU VAT ID).

What Does This Mean for the Host?

For non-professional hosts, Holidu will withhold 21% of their earnings, which will be directly remitted to the Italian tax authorities (Agenzia delle Entrate). Hosts who meet the criteria of professional hosts—such as having five or more properties or a VAT ID—are not subject to this withholding.

The 21% tax applies to the gross payout amount before any VAT or Holidu fees. Also cleaning fees, towel fees, and any other extra fees you charge are subject to tax withholding. The only exception not subject to withholding are tourist taxes included in the guest price.

All professional hosts are not affected by this law, meaning nothing changes for them, and most importantly, professional hosts continue to receive the full payments from Holidu. A professional host either has a valid EU VAT ID, or at least five properties for rent.

Tax Reporting and Forms

In terms of tax reporting, Holidu will handle the necessary forms for you.

• First, the F-24 form will be used to remit the withheld taxes to the Italian tax authorities on a monthly basis.
•  Additionally, you will receive an annual Certificazione Unica (CU) report by March 16th of the following year, detailing the taxes withheld on your earnings.
• Finally, Holidu will submit the Modello 770 form to the Agenzia delle Entrate by October 31st each year, reporting the taxes withheld for the previous period.

What If My Status Changes?

If your status changes, and you become a professional host—either by owning five or more properties or obtaining a valid VAT ID—you can request an update to your status by reaching out to Holidu.