Cedolare

Cedolare refers to the regime fiscale known as la cedolare secca in Italy, a substitute tax system applied to income from leases of real estate. The term is commonly used as shorthand for opting into this flat-rate taxation option for rental income.

The cedolare secca was introduced to simplify taxation on rental income and to encourage formalization of lease contracts. It can be elected by property owners who receive rents from immovable properties located in Italy, for eligible lease agreements. The regime is optional and is chosen for a given property and tax year, typically at the time of filing the tax return or renewing the lease.

Under the cedolare secca, the landlord pays a flat-rate substitute tax instead of the ordinary IRPEF (personal income tax) on the rental income. The standard rate is commonly referenced as 21 percent, with a reduced rate of 10 percent applicable in specific cases, such as certain leases subject to canone concordato (pre-agreed rents) in defined areas. The exact rate can vary with changes in tax law and contract type, so taxpayers should verify current rates when considering the choice.

Opting for the cedolare secca also affects contract-related charges: the registration tax and the bollo (stamp duty) on the lease may be due differently or, in some cases, avoided for the years the regime is in effect. In exchange for the flat-rate tax, the option generally reduces the landlord’s ability to deduct certain ordinary maintenance costs and other expenses related to the property.

Eligibility and duration: the regime applies to individual landlords and, in some cases, other entities earning rental income, for qualifying leases. The option is generally limited to each contract and may be changed in subsequent years according to tax rules.

See also: imposta sostitutiva, locazione, canone concordato.