Renting a house

  • Standard rent

In Italy, residential rental contracts usually last four years, with the landlord required to offer a renewal for another four years. The landlord can refuse this renewal only in cases specified by law (e.g., personal use of the property, a family member’s use, or renovation works). Outside these situations, the tenant has the right to renew, making the lease generally last a total of 8 years.

The tenant, in contrast, can terminate the lease at any time for ‘serious reasons’ with six months’ notice. Additionally, contracts often give the tenant this right even without ‘serious reasons’.

Once signed, the lease agreement must be registered with the Revenue Agency. For private landlords, rental income is typically taxed at 21%. Expenses are not deductible.

  • Transitional rental lasting up to 18 months

Intended to meet temporary needs, such as work, study, caring for a family member, or renovation, with these contracts allowing the landlord to avoid an eight-year commitment.

  • Tourist rental lasting up to one year

These are common in the tourism sector; they do not permit establishing residence in the property. For these contracts, the landlord must be registered in a specific register of the Region.

  • Short-term rental

These are a subcategory of tourist rentals; they do not exceed 30 days and do not require registration.

  • Rent-controlled agreement

They are less common; these are arranged through trade associations. Rents are generally below market rate, but the tax advantages partly offset the difference.

What is needed

For renting a house for more than 30 days, you need a “codice fiscale” (for details, click here).

Permissions and visas are required for non-EU citizens who stay in Italy for reasons other than tourism and for longer than 90 days (for details, click here).

Before signing the contract, the landlord will likely ask for proof of income or a bank statement showing sufficient funds to meet the rental agreement.

The landlord will also ask you to pay a deposit to protect against damage and breaches of contract. This usually amounts to 2 months’ rent for short-term contracts and 3 months’ rent for long-term contracts.

The rental agreement needs to be registered. Registration is usually handled by the landlord, and the cost is split equally between landlord and tenant. The cost is 2% of the rent (1% each) and must be paid annually. This cost does not apply if the landlord opts for the ‘cedolare secca’, a flat tax on rental income. 

If the rent is found through a real estate agency, the agency requires a commission of at least 1 month’s rent (+22% VAT).

Once you have signed the contract, it is recommended that you open an Italian bank account, as this makes paying utility bills easier (you can domicile the bills to the account so the bank pays them automatically). For short-term rentals (up to 12 months), this may be avoided, as utilities are usually not transferred to the tenant and remain in the landlord’s name, with charges added to the rent.

COST ESTIMATION

Here’s a rough estimate of the annual costs involved in renting a 100 sqm apartment in Palermo (in addition to the rental fee):

  • Garbage tax €250
  • Water costs €200
  • Gas/electricity €700
  • Internet & Mobile phone €450
  • Building management €900