Lucrezia Ciotti The 2027 Budget aims to reduce the burden of rental taxes and make housing more affordable, especially for young people. Among the government's new measures is a flat-rate tax of 1% for tenants under 35 and 5% for other rent-controlled contracts. Here's what changes will apply to landlords and tenants, and when the new rates could take effect.
2027 Budget Law: Flat-rate tax of 5% for agreed-upon rents and 1% for those under 35
The 2027 Budget Bill , approved by the Council of Ministers on October 28, provides for a revision of rental taxation with the aim of combating high rents and promoting the availability of more affordable housing.
The main change concerns the reduction of the flat-rate tax from 10% to 5% for agreed-upon rent agreements, with a further reduction for landlords renting to people under 35: in this case, the rate would drop to 1%. The measure aims to incentivize agreements that provide for lower rents than those freely determined by the market, offering tax advantages to landlords and, potentially, more sustainable conditions for tenants.
The proposal comes amid rising housing costs. According to ISTAT's report on Equitable and Sustainable Well-being, published on October 26, 2026, the costs incurred by families living in rented accommodation will have increased by 3,8% in 2025. Inflation, rising rents in large cities, and the spread of short-term tourist rentals are all contributing to a reduction in the supply of housing for permanent residence.
According to initial estimates, the project would require funding of approximately €100 million and could affect over 250.000 contracts . The measure also includes the return of the flat-rate tax on small commercial premises, with the aim of supporting local shops and combating the progressive desertification of urban centers. The new provisions, however, must complete the parliamentary process before becoming final.
Rent: Who can benefit from the new rates and what are the requirements?
The reduced rates proposed by the 2027 Budget Law apply exclusively to rent-controlled contracts, in which the rent is not freely set by the owner but must comply with the limits established by local agreements between landlords' and tenants' associations. This regime includes ordinary housing contracts lasting three years plus two , transitional contracts , generally between one and 18 months, and leases for university students , according to their respective regulatory conditions.
To access the benefits, a certificate of contract conformity, when requested, is required, issued by the organizations that signed the territorial agreements. It remains unclear whether the 5% reduction will also be applied to existing contracts or only to new ones , as well as whether the benefit will be extended nationwide . For the 1% rate for those under 35, guidance will also be needed on when to verify the age requirement and how contracts with multiple holders of different ages will be treated.
The flat-rate tax (cedolare secca) is an optional tax regime for individuals who rent residential properties outside of their business or professional activities. As an alternative to income tax (IRPEF) and related surtaxes on rental income, it allows for the payment of a substitute tax and the exemption from registration and stamp duty due for the registration, termination, and extension of the lease. Currently, the standard rate is 21% of the annual rent, while the 10% rate applies to agreed-upon contracts that meet the regulatory requirements, including territorial conditions. This regime can be particularly advantageous for those with high incomes , as the rent does not contribute to the overall income subject to the progressive IRPEF.
An additional benefit of agreed-upon contracts is the 25% reduction in IMU (property tax) , already provided for by law, which can be supplemented by any concessions established by individual municipalities. For tenants, the agreed-upon rent can translate into a monthly expense lower than market prices and, when the required conditions are met, the possibility of taking advantage of tax deductions for the primary residence. Specifically, for young people between the ages of 20 and 31 with a total income not exceeding €15.493,71 and who move into the leased property, a deduction equal to 20% of the rent is currently available for the first four years, with a minimum of €991,60 and a maximum of €2.000, under the conditions established by law.
Furthermore, the flat-rate tax protects tenants from inflation-related rent increases for the entire duration of the option: during recent inflationary peaks, ISTAT adjustments applied to some contracts reached 8-10%, resulting in increases of even more than 70-100 euros per month.
On the commercial front, the proposal provides for the reinstatement of the flat-rate tax for premises used for commercial activities with a surface area of up to 300 square meters , with a standard rate of 21% and the possibility of a reduction to 10% for businesses located in metropolitan centers, according to conditions that will have to be defined.
For now, however, these are not definitive provisions : the budget bill will have to be examined by the Chamber of Deputies and the Senate and may be subject to changes during the legislative process. If the measures are confirmed, the new rates will come into effect on January 1, 2027. Until then, the current rules will continue to apply, with a 21% flat rate for rent-free contracts and a 10% flat rate for agreements with creditors.