The rent-controlled property is subject to a declaration
The contract will need to be reviewed to ensure the tax relief is secured
This certificate is the key to accessing the reduced rates linked to the agreed rent. This is the starting point for considering how these significant changes – included in the draft Budget Bill and relating to rent-controlled tenancies – will work in practice.
On this point, it should first be noted that Article 2(3) of Law No. 431/1998 provides that the parties may enter into tenancy agreements, setting the rent, the duration of the contract (not less than three years, with the exception of temporary tenancies) and other contractual terms on the basis of the provisions set out in specific agreements drawn up at local level between the most representative landlords’ organisations and tenants’ organisations.
As things stand (with the regulations not yet providing for flat-rate tax rates of 5 per cent and 1 per cent), the tax relief – whereby the flat-rate tax is reduced from 21 per cent to 10 per cent – applies to tenancy agreements for properties located in municipalities with a severe housing shortage. These include the municipalities of Bari, Bologna, Catania, Florence, Genoa, Milan, Naples, Palermo, Rome, Turin and Venice, as well as neighbouring municipalities and other provincial capitals.
When determining the actual rent, the contracting parties may, at their request, be assisted (there is therefore no obligation) by their respective organisations representing landlords and tenants. Regional agreements, on the other hand, set out, for contracts drawn up without such assistance, the procedures for certifying that the financial and regulatory terms of the contract comply with the regional agreement. This ensures access to tax relief.
As clarified by the Italian Revenue Agency in Resolution No. 31/2018, for those lease agreements with an agreed rent that were entered into after 30 March 2017 without the assistance of the organisations, it is necessary, in order to apply the 10 per cent flat-rate tax, for the parties to obtain a certificate issued by the organisations that are signatories to the territorial agreement, confirming that the economic and regulatory terms of the contract comply with the territorial agreement. Pending the text of the draft Budget Bill, it is likely that the same rules as those of the current system will apply to the new one as well, both regarding the certificate and the local authorities eligible for the relief.
