What changes in the Real Estate sector under the 2026 Budget Law
The 2026 Budget Law, definitively approved by the Italian Parliament on December 30, 2025, introduces several significant measures affecting the Real Estate sector. The key changes concern short-term rental taxation under the cedolare secca regime, home renovation tax incentives, and the definitive phase-out of the 110% Superbonus. Below is a detailed overview of the main real estate provisions introduced by the new budget.
Cedolare secca: short-term rentals qualify as a business from the third property onward
The cedolare secca flat tax rate remains at 21% for the first property used for short-term rentals and increases to 26% for the second property.
Under the new rules, short-term rental activity is deemed a business activity starting from the third property rented, regardless of the contract’s duration. From that point onward, landlords are required to register for VAT.
The cedolare secca regime is an optional substitute tax that individual (non-corporate) property owners may choose when registering a lease agreement. It applies to rental income derived from residential properties.
This regime also applies to short-term leases (not exceeding 30 days), provided that the activity is not carried out on a business basis.
50% renovation tax credit for primary residences
The total funding allocated to the Home Renovation Bonus (Bonus Casa)—which allows taxpayers to deduct expenses incurred for building and renovation works—amounts to approximately €200 million for the 2026–2027 period.
The eligibility rules remain unchanged from the previous year:
- a 50% tax deduction for expenses related to a primary residence;
- a 36% tax deduction for second homes.
The spending cap also remains unchanged at €96,000 per property unit, with deductions spread over 10 equal annual installments against personal income tax (IRPEF).
In 2027, however, deduction rates will be reduced to 36% for primary residences and 30% for second homes.
Renovation bonus for common areas of residential buildings
The same tax incentives apply to expenses incurred in 2026 for works carried out on the common areas of residential buildings. Eligible works also include those performed on appurtenant spaces (such as garages or storage units) linked to the main residential unit.
Important distinctions apply:
- For common areas, the deduction covers expenses related to ordinary maintenance, extraordinary maintenance, restoration and conservation, and full building renovation.
- For individual residential units and their appurtenances, the deduction applies to the same types of work, excluding ordinary maintenance.
Protection against involuntary rent arrears and ISEE exemption for primary residences
The Budget Law allocates €2 million per year for both 2026 and 2027 to the rental support fund aimed at tenants facing involuntary arrears (for example, due to job loss or health issues).
Another notable change is the increase in the ISEE exemption threshold for the value of a primary residence:
- raised to €91,500 nationwide;
- increased to €200,000 for households residing in metropolitan capital cities.
The threshold is further increased by €2,500 for each cohabiting child after the first.
Housing plan and social housing for young people, couples, and seniors
To address social housing needs, the 2026 Budget Law introduces the “Piano Casa Italia” (Italy Housing Plan). This program supports the recovery, redevelopment, and construction of housing under new models of residential and social housing.
These properties are intended for subsidized rental agreements, or arrangements involving future purchase options (such as rent-to-buy schemes).
The measure specifically targets:
- young people, young couples, and separated parents through rent-to-buy initiatives;
- senior citizens, by promoting subsidized rental housing, potentially combined with property swap agreements.
The definitive end of the 110% Superbonus
Lastly, the 2026 Budget Law definitively brings the 110% Superbonus to an end.
The only exception applies to construction projects in areas affected by the 2009 and 2016 earthquakes, where a state of emergency has been declared. Even in these cases, eligibility is conditional upon:
submission of the application by March 30, 2024, and the choice of either an invoice discount or tax credit transfer mechanism.
