The 2026 Budget Law

The 2026 budget law was finally approved on 30 December 2025 with 216 votes in favour and 126 against in the Chamber of Deputies, with a budget of approximately €22 billion. The stated objective is to exit the excessive deficit procedure as early as 2026.

The 2026 budget law introduces a series of measures that directly and indirectly affect the Italian property market. From taxation on rents to building bonuses, ISEE (Equivalent Economic Situation Indicator) and measures to support families, the new regulatory framework redraws opportunities and critical issues for owners, investors and operators in the sector.

Let’s take a closer look at the main changes you need to know about.

Property taxation and rentals: crackdown on short-term rentals

One of the most significant points concerns the tax regulations for short-term rentals. The 21% flat tax rate is confirmed exclusively for the first property intended for tourist rentals. For the second property, the rate rises to 26%, while from the third property onwards, the activity qualifies as entrepreneurial.

This entails the obligation to register for VAT, apply standard taxation and comply with all the typical requirements for businesses. This is a significant change, which mainly affects small investors and owners with multiple properties dedicated to short-term rentals.

Consequently, a more careful assessment of overall profitability will be necessary.

With regard to traditional leases, the fund for tenants in arrears through no fault of their own is being refinanced with €2 million per year for 2026 and 2027. The aim is to support tenants in financial difficulty, reducing social risk and promoting greater stability in lease agreements, with indirect positive effects for landlords as well.

Building bonuses: continuity in renovations, end to extraordinary incentives

The Budget Law confirms the renovation bonus, which remains a key tool for the redevelopment of existing real estate assets. The rates remain unchanged: a 50% deduction for first homes and 36% for second homes, with no changes to spending limits or how they are claimed on tax returns.

The situation is different for the Superbonus: the 110% Superbonus is being permanently eliminated.

With limited exceptions for properties located in areas affected by the earthquakes of 2009 and 2016, and only for projects with applications submitted by 30 March 2024. From 2026 onwards, the construction sector will therefore operate without extraordinary incentives, in a more ordinary and predictable context.

ISEE and primary residence: more families can access benefits

Another interesting change concerns the calculation of ISEE (Equivalent Economic Situation Indicator) and the value of the primary residence. The exemption thresholds for the primary residence have been raised to €91,500 in general and up to €200,000 in metropolitan capital cities, with further increases for cohabiting children.

This measure significantly expands the number of families who can access bonuses, subsidies and public contributions, particularly facilitating access to the property market for young couples and families.

IRPEF reduction and its impact on housing demand

In terms of general taxation, the Budget Law provides for a reduction in the second IRPEF tax rate, which will fall from 35% to 33% for incomes between €28,000 and €50,000, with a mechanism for the progressive reduction of benefits for higher incomes.

Although this is not a measure specifically targeting the property market, it has a significant indirect effect: increased spending power for households and potential buyers can translate into support for housing demand, particularly in the first-time buyer segment.

Tax amnesty: a useful tool for real estate too

The Budget introduces the so-called rottamazione quinquies, a new amnesty for debts entrusted for collection from 2000 to 2023. It is possible to settle outstanding debts in a single payment or through a plan of up to 54 bi-monthly instalments, with a subsidised rate of 3%.

This measure may also be particularly useful for property owners with debts related to IMU (property tax), TASI (local services tax) or taxes on rental income, allowing them to regularise their position before a sale or asset reorganisation.

Support for families and maintaining rental demand

On the social front, certain income support measures have been confirmed and strengthened, such as the “Dedicata a te” card, with €500 million allocated for the two-year period 2026-2027, intended for households with an ISEE of up to €15,000. In addition, there is a fund for school books, amounting to €20 million per year for families with an ISEE of up to €30,000.

Although not strictly speaking real estate measures, these interventions help to support rental demand among the most vulnerable sections of the population.

Local authorities, urban planning and public heritage

Finally, the Budget introduces greater budgetary flexibility for municipalities and local authorities, with the possibility of renegotiating loans and simplifying accounting procedures. This may translate into greater capacity to invest in urban regeneration projects, public housing and the enhancement of local real estate assets.

Conclusions

The 2026 Budget marks a shift towards a more regulated property market that is less dependent on extraordinary incentives. On the one hand, there is a crackdown on short-term rentals and the end of the Superbonus, while on the other, the role of the primary residence is strengthened and housing demand and rental stability are supported.

A regulatory framework that requires attention and planning, but also offers new opportunities for those operating in the sector with a medium- to long-term vision.

Source: ‘2026 budget law approved: all the latest news on the manoeuvre’.(https://www.idealista.it/news/finanza/economia/2025/10/16/279697-manovra-2026-in-arrivo-le-misure-sul-tavolo-del-governo)

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