2026 Budget Law: all the tax changes and their impact on the real estate market
Introduction
Approved by the Council of Ministers on 17 October 2025 and now under review by Parliament, the 2026 Budget Law introduces a package worth €18.7 billion.
The Government aims to support growth, employment and investment, while at the same time maintaining a prudent approach to public finances, with a projected deficit of 2.8% of GDP.
In this article, we analyze the main tax changes and the measures for families and businesses, and above all the impacts on the real estate market and on short-term rentals, topics of great interest for owners, investors, and industry professionals.
2026 Budget Plan: the general overview
The draft of the Budget Law, consisting of 137 articles, sets out targeted measures to:
- reduce the tax burden on households;
- stimulate investment and innovation in businesses;
- strengthen support for employment and welfare;
- ensure a balance between public spending and financial stability.
The Government has also confirmed its intention to use the European safeguard clause to finance defense without violating the new EU rules.
Taxation and employment: IRPEF cut and reduced tax on overtime
Among the measures most anticipated by taxpayers:
- Reduction of the IRPEF rate from 35% to 33% for incomes above €28,000, with savings of up to €440 per year for those earning around €50,000.
- 15% substitute tax on overtime, holiday, and night work for incomes up to €40,000, with maximum savings of €1,500.
Other significant changes:
- increase of the 5×1000 cap from €525 million to €610 million;
- scrapping of tax bills for liabilities from 2020–2023, with payment allowed until 2035;
- exclusion of the primary residence from the ISEE calculation for properties valued up to €91,500.
Businesses and investments: green and digital incentives
The budget measures strengthen support for businesses investing in innovation and ecological transition, with:
- super-amortization up to 180% for technological projects;
- increases up to 220% for green investments that reduce energy consumption;
- new funds for SEZs, Development Contracts, and the New Sabatini scheme;
- 26% taxation on income from crypto-assets and stablecoins;
- establishment of a permanent working group on innovative finance at the Ministry of Economy and Finance (MEF).
Financial sector and large assets
To contribute to the sustainability of the budget plan:
- IRAP increases to 6.65% for banks and 7.90% for insurance companies;
- the deductibility of previous losses is revised;
- the flat tax for new residents with foreign income increases from €200,000 to €300,000 per year.
The additional expected revenue exceeds €4.4 billion in 2026.
Families and welfare: social support confirmed
The Government assures that no cuts to social spending are planned.
In 2026 a new family package will be introduced, with enhancements to housing bonuses, childcare benefits, and parental leave, the details of which will be defined during the parliamentary review.
Real estate focus: flat tax, short-term rentals, and IRPEF
26% flat tax on short-term rentals
From 2026, the flat tax on short-term rentals will be standardized at 26% for all such leases, eliminating the previous 21% rate applied to the first property.
Real estate agencies and intermediation platforms will also be subject to the same 26% rate.
👉 This measure aims to simplify the tax system but results in a reduction of net returns for many owners who rent out properties for tourist use.
Indirect effects on purchasing and renting
The IRPEF cut to 33% may increase disposable income for the middle class (€28,000–50,000), potentially boosting the demand for purchases and rentals.
However, anti-erosion mechanisms will limit the benefit for higher incomes, making the overall effect more moderate.
Where to consult the 2026 Budget Law
The full text (137 articles) is available in major Italian financial newspapers, including Il Corriere della Sera and Il Sole 24 Ore.
Independent analyses confirm that this is an expansive yet prudent budget plan, aimed at supporting growth and investments without compromising the balance of public finances.
Conclusions
The 2026 Budget Law represents a balance between tax reductions, support for economic growth, and rationalization of tax benefits.
For the real estate market, the increase in the flat tax on short-term rentals and the new IRPEF measures deserve attention, as they may affect both the profitability of tourist rentals and the purchasing power of part of the clientele.
We at La Baita Case will continue to monitor developments in the legislation and its effects on the real estate sector, providing updates and dedicated advice for those wishing to sell, purchase, or rent out a property.
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