Relevant News For Real Estate Investments In Italy

In December 2025, two legislative provisions of particular relevance were issued for those intending to invest in real estate in Italy. In particular, Law No. 182/2025 introduced a regulatory provision relating to the transfer of real estates that had previously been donated, while Budget Law No. 199/2015 introduced important new provisions on the taxation of income deriving from the rental of real estates through short-term rental contracts.

Article 44 of Law 182/2025 amended the Civil Code, introducing new provisions that remove the right of affected heirs to request third-party purchasers to return real estate that the donee of the deceased has sold to them.

The new provisions of the Civil Code establish that the so-called “reduction of the donation” does not affect third parties to whom the donee has sold the donated real estates, without prejudice to the donee’s obligation to compensate the legitimate heirs in cash for the integration of the reserved quote. If the donee is wholly or partially insolvent, the purchaser is required to compensate the heirs in cash only if he received the real estate from the donee for free.

The new provisions apply to inheritances opened after 18 December 2025, regardless of the date on which the real estate was donated.

Specific rules are also provided for successions opened before 18 December 2025, for which the rules on restitution, based on the previous regulations, allowed legitimate heirs who had been wronged to obtain the restitution of real estate donated by the deceased, even from third-party purchasers. In particular, it should be noted that the previous rules provided that if the donees against whom the reduction was pronounced had sold the donated real estate to third parties and twenty years had not elapsed since the registration of the donation, the legitimate heir, after attempting to enforce the donee’s assets, could request the subsequent purchasers to return the real estate.

The relevance of this provision is clear in that it overcame the difficulties in the circulation of real estate due to the general distrust of purchasers - and other involved parties, including the banking system, which may have been involved in providing financing for the purchase of that real estate - towards real estate received by donation, even in cases where there were no grounds for claiming that the sale of the real estate could infringe the rights of the legitimate heirs.

It is important to remember that short-term rentals refer to rental contracts for residential properties with a duration of no more than 30 days, including those that provide linen and cleaning services, entered by individuals, outside the exercise of business activities, directly or through intermediaries, including those who manage online platforms.

Due to the new rules introduced by the 2026 Budget Law (No. 199/2015), these contracts are eligible for the flat-rate tax (so-called "cedolare secca"), at a rate of 26%, for one property; while for another property intended for short-term rental, chosen by the taxpayer, the rate of 21% applies. Those who rent out three flats are not covered by the short-term rental regulations and do not apply the flat-rate tax, as three or more flats trigger the presumption of entrepreneurship.

On this point, it should be noted that, starting in 2021, a presumption of entrepreneurship has been introduced that excludes the applicability of short-term rental regulations in the case of a certain number of apartments being used for short-term rentals during the tax period. From 2021 to 2025, the threshold for flats compatible with short-term rentals was four properties: i.e., from five flats upwards, the presumption of entrepreneurship applied, with all the consequences in terms of VAT, business income, and social security and insurance contributions.

Starting from the 2026 tax period, only those who rent out a maximum of two flats with short-term rental contracts will be able to apply the short-term rental regulations. From three flats upwards, the presumption of entrepreneurship applies.

For the purposes of assessing the presumption of entrepreneurship, only short-term rental contracts are included in the calculation of flats; therefore, ‘non-short-term’ rental contracts are excluded. Furthermore, if different rooms of the same flat are rented under multiple short-term rental contracts, only one flat is considered.