The short-term rental regime was introduced into our legal system with Legislative Decree no. 50 of 24 April 2017, in article 4. This is a particular form of tax regime dedicated to the rental of residential properties for a period not exceeding 30 days. The tax regime for short-term rentals applies to natural persons outside the business, arts or professions who wish to rent one or more apartments for short periods.

However, it is necessary to pay attention because an activity of this kind could be configured as entrepreneurial. When does a holiday home become an entrepreneurial activity? Income from short-term rentals becomes a business when the business is carried out continuously and systematically, with the intention of making a profit.

The Revenue Agency has recently clarified that, starting from 1 June 2017, the specific dedicated regime will be adopted for short-term leases, even if the units are rented by natural persons who do not exercise business activity.
However, starting from the 2021 tax period, the short-term lease tax regime applies to a maximum of 4 real estate units for each tax period.

This means that, if the short-term lease were to be applied to a number greater than 4 units during the same tax period, the short-term lease activity would always be considered an entrepreneurial activity, regardless of who the lessor is, even in the case of a natural person who does not carry out business activities.

How to declare income in case of business activity

As regards the methods for declaring income deriving from short-term rentals, the Revenue Agency confirms that it is not possible to use Form 730 in these cases. Form 730 is used to declare income from employment or assimilated to them, income deriving from land and buildings, capital income, income from self-employment without a VAT number, other income, such as that deriving from land or buildings located abroad, and some income subject to separate taxation, such as income deriving from inheritance (with the exception of land income and income related to business activities or the exercise of arts and professions).

All income deriving from entrepreneurial activity cannot be declared with the 730 Form. Furthermore, it will be necessary to register with the Chamber of Commerce and adopt the tax rules envisaged for business activities, such as for example the keeping of separate accounting