The cedolare secca is an optional flat tax regime for residential rental income in Italy. It replaces the ordinary IRPEF taxation of rental income with a simple flat rate, offering significant savings for many landlords. Understanding when and how to use it is essential for property owners in Italy.
Cedolare Secca Rates
There are two rates available:
- 21% — Standard rate (canone libero): Applies to free-market rental contracts where the rent is freely negotiated between landlord and tenant
- 10% — Reduced rate (canone concordato): Applies to agreed-rent contracts (contratti a canone concordato) in municipalities with housing shortages or high population density
The 10% rate is available in comuni with specific characteristics: high population density (alta tensione abitativa), provincial capitals, or municipalities identified by CIPE deliberations. Many major Italian cities qualify.
What the Cedolare Secca Replaces
By opting for the cedolare secca, you replace multiple taxes with a single flat rate:
- IRPEF: Rental income is excluded from your progressive IRPEF calculation
- Addizionale regionale: No regional surcharge on rental income
- Addizionale comunale: No municipal surcharge on rental income
- Imposta di registro: No registration tax on the rental contract (normally 2% split between landlord and tenant)
- Imposta di bollo: No stamp duty on the contract
When the Cedolare Secca Saves Money
The cedolare secca is almost always beneficial, but the savings are particularly significant when:
- Your marginal IRPEF rate is 35% or 43% — the cedolare secca rate of 21% is substantially lower
- You have rental income from properties in high-demand areas qualifying for the 10% rate
- You want to avoid paying the 2% annual registration tax on the contract
However, there are situations where ordinary IRPEF taxation might be preferable:
- If your total income is very low and falls within the 23% bracket with significant detrazioni
- If you have substantial tax deductions (e.g., mortgage interest, renovation bonuses) that need rental income to absorb them, since cedolare secca income does not count toward IRPEF deductions
Eligibility and Restrictions
- The property must be residential (categoria catastale A, excluding A10)
- The tenant must be a private individual (not a business or company)
- The landlord must be a private individual (not a company or commercial entity)
- You must notify the tenant of your choice and agree not to increase the rent by the ISTAT index for the contract duration
How to Opt In
You can elect the cedolare secca:
- When registering a new rental contract with the Agenzia delle Entrate (Modello RLI)
- At the annual renewal of an existing contract
- The option is valid for the entire contract duration and can be revoked at each annual renewal date
Advance Payments (Acconti)
Cedolare secca advance payments follow the standard schedule:
- First installment: 40% by June 30th
- Second installment: 60% by November 30th
- No advance is due if the total cedolare secca is below €51.65
Use our rental income calculator to compare the cedolare secca against ordinary IRPEF on your rental income.