🎯 STRisker: Bulletin - Italy
Italy Budget Law 2026 compresses the small-operator corridor and mandates business registration from three properties
Italy Reshapes STR Market: VAT Threshold Cut to 3 Properties
Photo by Rebe Adelaida
Italy's Budget Law 2026 has fundamentally restructured the short-term rental regulatory landscape by lowering the VAT registration threshold from five properties to three, effective immediately as of January 1, 2026. The change marks a significant shift in how the Italian government classifies and regulates STR operations, with broad implications for market supply and host classification.
As detailed in ANIA Inquilini's analysis:
who rents one or two properties for short periods it can continue to operate as private, taking advantage of ordinary taxes or the dry coupon (21% on the first property and 26% on the second, if chosen);
who allocates to short-term leasing three or more properties in the same year is automatically considered owner of a business pursuant to Article 2082 of the Civil Code.
Budget Law 2026 introduces tax measures, income support provisions, and updates to short-term rental regulations
What Changed
Under the new framework, any host operating three or more residential STR units in a calendar year automatically triggers mandatory VAT registration, formal business accounting, and commercial tax compliance. This reclassifies the activity from passive property investment to presumptive "entrepreneurial activity", significantly lowering the barrier to commercial classification compared to the previous five-property threshold.
Market Impact
The threshold reduction has immediate consequences for host portfolio management. An estimated 200K-500K properties held by affected demographic groups now face portfolio restructuring decisions. The regulatory change affects full-time civil servants (3.1+ million across government, universities, and healthcare), as well as practicing lawyers (Law 247/2012), accountants (Legislative Decree 139/2005), and notaries (Law 89/1913)—occupational groups statutorily restricted from commercial enterprise engagement.
Enforcement & Outlook
The regulation took effect January 1 with immediate enforcement and no transition period. Confedilizia, Italy's property owners' confederation, has signaled constitutional challenges on proportionality grounds. Legal proceedings are expected within 6-12 months, creating an active litigation period during which the regulatory framework remains in effect.
⦿ Effective date: January 1, 2026
⦿ VAT threshold: 3+ properties (down from 5)
⦿ Affected groups: Civil servants, lawyers, accountants, notaries
⦿ Enforcement: Immediate; host-driven
⦿ Market adjustment: Portfolio reduction or long-term conversion
Affitti brevi, da Halldis by Vita il Vademecum 2026 https://t.co/d2YAUU4bfM pic.twitter.com/9gEsRX2JMU
— IlSole24ORE (@sole24ore) February 24, 2026
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