For leases, agreed and transient contracts are the alternatives to 4+4
With the dry lease, the RLI model is used through the telematic services of the Inland Revenue with exemption from registration tax and stamp duty
Key points
For a property owner who wants to evaluate the actual convenience of using so-called short lets, it is essential to also evaluate other formulas on the market when he or she is faced with renting a property. Short leases are agreements for which the tenant can rent for a maximum duration of 30 consecutive days with the same tenant. They do not require registration of the contract but could be subject to a tax hike for the dry coupon regime from the current 21 per cent to 26 per cent. This rate is now applied starting from the second property that one owns and rents out under the flat rate regime.
The 4+4 contract
These are the so-called standard '4+4' rental contracts (Law no. 431/98), which on the one hand offer the advantage of free rent, but on the other have a duration constraint that often disincentivises those who buy in order to have an income. If one has problems with the tenant (arrears or various disagreements) one can hardly break the contract before eight years. Although one may express in the contract a preference not to renew the contract for another four years.
These contacts provide for the application of the dry coupon at 21% or with the ordinary regime the rent forms the income, which is taxed at progressive rates according to the total income bracket. The law recognises a flat-rate deduction of 5%, but a registration tax of 2% of the annual rent multiplied by the annuities of the contract is required.
The options on the market
In recent years, agreed and transitional contracts have arrived, which have such characteristics that, when combined in a single contract, they can be a very attractive option for those who want to preserve a certain freedom in the management of the property.
With an agreed contract, landlord and tenant agree on a number of elements: the rent, which is not free, the duration (3 years) and other clauses (maximum extension of two years, termination of six months). The rent must comply with the scales prefixed in territorial agreements by the property owners' and tenants' organisations. These tables have minimum and maximum levels set according to a number of parameters (area, square metres of the building, age, presence of terrace or other rooms, etc.). Moreover, the calculation methods may vary from municipality to municipality, although all major cities have had them in place for some years now.
