Here's All You Need To Know About Cedolare Secca

Image via Freepik

Image via Freepik

Talking about rentals, we hear more and more about the so called “regime di Cedolare Secca”. Let’s see in detail what this means exactly.

WHAT IS CEDOLARE SECCA

Cedolare Secca is an optional tax regime that can be an alternative to the ordinary Irpef regime.

With Irpef regime, the rent one gets from a property is added to the other personal incomes, and it’s taxed at the higher marginal rate.

Conversely, with Cedolare Secca the monthly rental income is excluded from the owner’s personal income: a fixed rate is applied (that on Lake Como is always 21%) - regardless of the owner’s personal income.  

To recap: cedolare secca is a fixed tax, whereas Irpef is a variable one.

Irpef taxation it’s a progressive tax: the more you earn, the more you pay. 

The rates are divided in income brackets, from 23% up to 43%; all the profit of a person are divided by income brackets and each of these brackets correspond to a specific rate. The Irpef regime (variable taxation) is then calculated by the sum of the taxation of the first group, plus that of the second, plus that of the third, etc. 


WHO CAN CHOOSE CEDOLARE SECCA REGIME

The only contracts that can apply for Cedolare Secca regime must respect the following conditions:

  • the owner of the real estate must be a private person and not a society;

  • the tenant must be a private person and not a society and must take the house only for residential use;

  • the property object of the contract must be residential, registered on the Land Registry office with category A (excluded A10);

  • the property must be rented for residential purposes only.


FISCAL SAVINGS WITH CEDOLARE SECCA

Choosing the Cedolare Secca regime basically means some important fiscal savings, both for landlords and for tenants:

  • on the rental income, owners don't pay the additional regional and municipal income tax

  • owners don’t have to pay any tax for third warranty

  • registry tax and stamps are not due for the registration of the rental contract! That’s good for both owners and tenants

  • registry tax are not due in case of renewal, extension or dissolution of the contract: that’s again a big advantage both for landlords and for tenants

  • the owner renounces the right to request the updating of the rental fee, including the variation (ascertained by Istat) of the national price index. For tenants, this means that the rental annual fee to pay to the landlord will stay the same!

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