The government has proposed lowering the cedolare secca (Italy’s flat tax on rental income) on agreed-rent contracts (canone concordato): from 10% to 5%, and to 1% if the tenant is under 36. If you own a home in southern Salento, in Salve, Morciano di Leuca, Castrignano del Capo or Tricase, there is only one practical question: does it apply to you too? In this in-depth article we look at what the text presented to Parliament really says, who can use the new rate, how much you save and what stays the same for short-term rentals.
In short
The 2027 Budget Bill, approved by the Council of Ministers on 28 October 2026 and sent to the Chamber of Deputies on 30 October, brings the cedolare secca on agreed-rent contracts down from 10% to 5%, and to 1% if the tenant is under 36 at signing. It applies only to contracts signed in 2027 and to rents up to 2031, and only in high housing-pressure municipalities (alta tensione abitativa), where 10% is paid today: in the province of Lecce there are 12 of them, all in the Lecce area. It is not yet law.
What is the 5% cedolare secca on agreed-rent contracts?
It is a lower rate of the substitute tax on rents, proposed for new agreed-rent contracts signed in 2027. It replaces IRPEF (Italian personal income tax), the regional and municipal surcharges, registration tax and stamp duty, and is calculated on the annual rent: on €6,000 a year it would be €300 at 5% and €60 at 1%. Today, in the same municipalities, the rate is 10%.
The cedolare secca is an optional regime: instead of adding the rent to your other income and paying IRPEF at the progressive bracket rates, you pay a flat-rate tax on the annual rent, which also replaces the surcharges, registration tax and stamp duty. In return, for as long as the option lasts, you give up any update of the rent, including the ISTAT inflation adjustment. Today the rule is in Article 3 of Legislative Decree 23/2011; from 1 January 2027 it moves, with the same rates, into the new Consolidated Income Tax Act (Legislative Decree 117/2026).
Today’s rates, as summarised in the Italian Revenue Agency (Agenzia delle Entrate) fact sheet: 21% for open-market rent, such as the 4+4 contract; 10% for agreed rent in high housing-pressure municipalities; for short-term rentals, 21% on the home you indicate in your tax return and 26% on the second one.
What the 2027 Budget Law provides
The Council of Ministers approved the 2027 Budget Bill on 28 October 2026, and the government’s official press release confirms the cedolare secca on agreed rents at 5%, and at 1% for tenants aged up to 35. On 30 October the text, certified (bollinato) by the State General Accounting Office (Ragioneria generale dello Stato), was sent to the Chamber of Deputies; it will then go to the Senate. It must be approved by 31 December 2026.
In the text presented, the measure is in Article 5. In summary:
- 5% for rents from 1 January 2027 to 31 December 2031, only for agreed-rent contracts signed in 2027 that are entitled to the 10% rate today;
- 1% if the tenant is under 36 at signing, with no income limits;
- also applies to the first renewal of these contracts, still within 2031;
- does not apply to contracts already running, nor to those extended or renewed in 2027;
- anti-abuse rule: no 5% if a contract running on 30 September 2026 is ended early and in 2027 the home is let again to the person who lived there or to their family.
What is not yet decided: the text can change in Parliament, including the article number. It is not clear, for example, how the 1% works with several tenants of different ages, or whether the 5% also applies in the disaster-hit municipalities that have the 10% rate today. Until publication in the Gazzetta Ufficiale (Official Journal), treat the rates and conditions as still to be confirmed.
Who can use it: agreed-rent contracts and the municipalities of Salento
An agreed-rent contract is a contract provided for by Law 431/1998 (Article 2, paragraph 3): it lasts at least 3 years plus a 2-year extension, and the rent must be set within the bands of a local agreement (accordo territoriale) between owners’ and tenants’ associations. There are also temporary contracts (from 1 to 18 months) and contracts for university students (from 6 months to 3 years). In Lecce the new agreement was signed in 2018; municipalities that have never had one use the agreement of the nearest municipality with a similar population (Ministerial Decree of 14 July 2004). If you sign without the assistance of the associations, the tax benefits require a certificate of compliance (attestazione di rispondenza) from a signatory association. Agreed-rent contracts also qualify for IMU (municipal property tax) reduced to 75% (Law 160/2019, Article 1, paragraph 760).
The key point: the reduced rate does not apply in every municipality
Today’s 10%, and therefore the proposed 5% and 1%, apply only to homes in municipalities with a housing shortage (the major cities, the municipalities bordering them and all provincial capitals) and in the other high housing-pressure municipalities designated by CIPE (the Interministerial Committee for Economic Planning). The bill refers precisely to these contracts and does not extend the list.
In the province of Lecce the CIPE list (resolution 87/2003) includes 12 municipalities: Arnesano, Cavallino, Lecce, Lequile, Lizzanello, Monteroni di Lecce, Novoli, San Cesario di Lecce, Squinzano, Surbo, Trepuzzi and Vernole. Salve (with Pescoluse and Torre Pali), Morciano di Leuca (with Torre Vado), Castrignano del Capo (with Leuca), Tricase and the other municipalities of the Capo di Leuca are not on it.
In practice: today an agreed-rent contract in Salve or Tricase, under the cedolare secca, pays 21% like an open-market contract, and under the current text it would pay 21% in 2027 too. The other advantages remain, such as reduced IMU (check your municipality’s rules). One exception to check: the 10% rate also applies in municipalities where a state of emergency due to a disaster was declared in the five years before 28 May 2014. If you think yours qualifies, ask your accountant (commercialista).
How much you save: an example
An indicative example, with hypothetical figures: an apartment that would rent for €600 a month (€7,200 a year) at open-market rent and for €500 a month (€6,000 a year) at agreed rent. The actual agreed rent depends on the local agreement, the area and the home. The table shows only the cedolare secca, without IMU, expenses or months with the home empty; the net figure is the annual rent minus the cedolare secca.
| Contract | Rate | Annual tax | Net |
|---|---|---|---|
| Open-market rent (4+4), €7,200 a year | 21% | €1,512 | €5,688 |
| Agreed-rent contract in a municipality not on the list, for example Salve: today and in 2027 | 21% | €1,260 | €4,740 |
| Agreed-rent contract in Lecce, today | 10% | €600 | €5,400 |
| Agreed-rent contract in Lecce signed in 2027 (if approved) | 5% | €300 | €5,700 |
| Agreed-rent contract in Lecce signed in 2027, tenant under 36 (if approved) | 1% | €60 | €5,940 |
What the example shows: in a municipality on the list, at 5% the lower agreed rent would give roughly the same net income as the open-market rent, and at 1% slightly more. Outside the list, as in Salve, the cedolare secca stays at 21% and the comparison depends on the other advantages (reduced IMU, a shorter term than the 4+4) and on the rent you would actually get. Run the numbers with your accountant.
Short-term rentals and holiday homes: what stays the same
The text presented contains nothing new for short-term rentals, meaning contracts of up to 30 days signed by private individuals, including through agencies or online portals: the cedolare secca is 21% on the home you indicate in your tax return and 26% on the second; from 2026 the regime applies to two apartments at most, and beyond that the activity is presumed to be a business. The CIN (National Identification Code) and the other obligations remain; you will find them in our guide to short-term rentals and holiday homes in 2026.
How to weigh it up, without standing in for your accountant: an agreed-rent contract ties up the home for at least three years, with a lower but steady income and less management, and during that time you can neither use it yourself nor let it to tourists. A short-term rental leaves the home free when you need it, but the income depends on the season, reviews and management: cleaning, check-in, maintenance, any tourist tax. In municipalities not on the list, the bill as it stands does not change the tax comparison: if you rent out only one home, the cedolare secca stays at 21% in both cases.
Salento Prime manages holiday homes in Salento: if you want to understand how your home could work as a short-term rental, talk to us before you decide.
What to do now
- Check the municipality: if the home is not in one of the 12 listed municipalities in the province of Lecce, the 5% and 1% rates, as written today, do not concern you.
- If you already have an agreed-rent contract, remember that the text excludes current contracts and those extended or renewed in 2027.
- If you are considering a new contract, check the final text before signing: the law is expected by the end of December.
- Ask the owners’ associations which local agreement applies in your municipality and how to obtain the attestazione.
- Run the numbers with your accountant, including IMU, expenses and months with the home empty.
- For short-term rentals, check the CIN, the number of apartments and the rate (21% or 26%).
FAQ
Is the 5% cedolare secca already law?
No. It is in the 2027 Budget Bill, now being examined by the Chamber of Deputies, and it can change until final approval, expected by 31 December 2026.
From when would it apply?
To rents from 1 January 2027 to 31 December 2031, for agreed-rent contracts signed in 2027 and for their first renewal, within the same limit.
Does it also apply to the contracts I already have?
No, according to the text presented: current contracts stay under today’s rules, and those extended or renewed in 2027 are excluded.
Who is entitled to the 1% rate?
Anyone who, in 2027, signs an agreed-rent contract with a tenant who is under 36 at signing. There are no income limits; the case of several tenants of different ages has not been clarified.
Does it also apply in Salve, Tricase or Castrignano del Capo?
Not under the current text: it only covers high housing-pressure municipalities, of which there are 12 in the province of Lecce, all in the Lecce area.
Does anything change for short-term rentals?
No: the 21% for one home, the 26% for the second, the two-apartment limit and the CIN all remain.
What is the attestazione di rispondenza?
It is the document with which an association that signed the local agreement confirms that the contract complies with the agreement. You need it for the tax benefits if you sign without the assistance of the associations.
And for shops?
The bill also provides for the cedolare secca at 21% for contracts signed in 2027 on shops and small retail premises (cadastral category C/1) of up to 200 square metres. Some articles mention 300: the text we read says 200.
Conclusion
The cedolare secca at 5%, and at 1% with tenants under 36, is a concrete proposal but not yet law, and as written it only covers new agreed-rent contracts signed in 2027 in high housing-pressure municipalities. For those who own a home in Lecce and the nearby municipalities it can change the numbers; in the Capo di Leuca, from Salve to Castrignano del Capo and Tricase, nothing changes today, unless Parliament extends the measure. Before signing a new contract, check the final text.
Do you own a home in Salento and want to understand how to make it profitable? Salento Prime takes care of holiday home management and property management: you can use the Propose your property page or write to us via our contact page.
The information in this article is general and up to date as of 3 November 2026, when the 2027 Budget Bill was being examined by the Chamber of Deputies; it does not replace advice from an accountant.
