What the cedolare secca is and what it costs

Giulia lets an inherited two-room flat in Bologna for 800 € a month, 9 600 € a year, under a canone concordato lease. Her neighbour across the landing collects exactly the same rent under an open-market lease. With the cedolare secca, on identical rent, she pays 960 € and he pays 2 016 €. Neither of their incomes explains the gap: one line of the lease and the town the flat stands in do.

A tax that takes the place of IRPEF

The cedolare secca is an optional regime. A landlord who chooses it pays, on the income from the let property, a substitute tax that replaces IRPEF and the surcharges on it. That income stops being added to the owner's other income and is taxed on its own, at a flat rate that ignores what he earns elsewhere.

The advantage does not stop at income tax. Leases under the cedolare secca carry neither registration tax nor stamp duty, which normally fall due on registering a lease, on terminating it early and on extending it. There is one exception: when the lease itself is assigned to someone else, registration tax is still charged.

There is a price, printed on the same page of the Agenzia delle Entrate. For as long as the option lasts, the landlord gives up the right to ask for any rent increase, even one written into the lease. That includes indexation to the ISTAT consumer price index for blue- and white-collar households.

This course describes the rules in force in 2026, as the Agenzia delle Entrate publishes them. The legal framework is moving: the TUIR, which governs IRPEF today, is repealed from 1 January 2027 by Legislative Decree 117/2026. The course does not predict the new texts; anyone reading after that date should check the updated rules.

Who may opt in, and for which properties

The option is open to individuals who hold ownership or a real right of enjoyment over the property, usufruct being the usual example. The decisive condition lies elsewhere: the property must not be let in the course of a business, a craft or a profession. A company is excluded, and so is an entrepreneur letting assets of his firm.

• Units in cadastral categories A/1 to A/11, except A/10 (offices and private practices), let for residential use
• Appurtenances let together with the dwelling
• Appurtenances let under a separate, later lease, provided the parties are the same, that lease refers to the dwelling's lease and the appurtenance link is stated
• Shops in category C/1 of up to 600 square metres, appurtenances excluded, for leases signed in 2019 only

Where several people own the property, each landlord decides for himself. A co-owner who does not opt in pays registration tax on the share of rent that corresponds to his ownership share, and stamp duty on the lease remains due in any case. Where the law sets a minimum registration tax, that minimum is paid in full.

Usufruct follows the same logic. The Agenzia grants the option to the holder of the real right of enjoyment, in other words to whoever receives the rent. It is the usufructuary who chooses, not the bare owner, who draws no taxable income from the lease at all.

The tenant matters too. The regime is unavailable when the tenant acts in the course of a business or self-employment, even if the flat will house an employee or a collaborator. The only exception concerns C/1 shops let in 2019 to tenants, individuals or companies alike, carrying on a commercial activity.

One further opening concerns students. The option is allowed for dwellings let to housing cooperatives or non-profit bodies, provided they are sublet to university students and made available to the municipalities, with a waiver of rent updates or an allocation arrangement.

The boundary is easiest to see from the outside. An office registered as A/10, a warehouse, a shop let after 2019, or a flat leased to a company to house one of its managers all stay out. In each of those cases the rent is taxed in the ordinary way, with registration tax and stamp duty on the lease.

The two rates: 21 and 10 per cent

The computation is simple by design. The substitute tax is the rate applied to the annual rent agreed between the parties. The base is not the cadastral income of the property: it is the figure written into the lease, brought to a full year.

Shops are a case apart. The option covers leases of C/1 premises signed in 2019, up to 600 square metres without appurtenances, at the 21 % rate. The very same shop let under a lease signed in any other year remains under ordinary taxation.

The 10 % rate does not attach to every canone concordato lease. The dwelling must also stand in one of the municipalities the rule identifies. Outside them, a canone concordato lease is still taxed at 21 %: the type of lease is a necessary condition, not a sufficient one.

• Municipalities with housing shortages under Decree-Law 551/1988: Bari, Bologna, Catania, Florence, Genoa, Milan, Naples, Palermo, Rome, Turin and Venice
• The municipalities bordering those eleven cities
• All other provincial capitals
• The high housing-pressure municipalities designated by the CIPE

The test looks at the municipality where the property lies, not where the owner lives. A Milanese landlord who lets a flat under canone concordato in a small hill town, which is no provincial capital, does not border the listed cities and is not a high-pressure area, applies 21 %.

What happens to total income

Income taxed under the cedolare is excluded from total income. Two consequences follow. On the one hand it is not stacked on the owner's other income, so it does not push up the IRPEF charged on them. On the other, neither deductible expenses nor tax credits can be set against it or against the cedolare itself.

The exclusion is not universal, though. The rent still counts wherever a deduction, a credit or any benefit depends on income thresholds. The Agenzia names two examples: the calculation of the ISEE, the household means indicator, and the income test that decides whether someone is a dependant for tax purposes.

For a family the second rule can bite. A son who owns a small flat let under the cedolare does not shed that income when his parents assess whether he is still their dependant: the rent goes into the very figure that settles the question.

Comparing the cedolare with IRPEF, without shortcuts

Under the ordinary regime the rent joins total income and bears progressive IRPEF, charged by brackets, plus the surcharges. The rate that hits the last euro of rent therefore depends on everything else the owner earns. That is exactly why no answer holds for every landlord.

The IRPEF bracket calculator on this site helps find the marginal rate the rent would suffer. The useful comparison, however, is not between two percentages taken alone. It sets IRPEF computed with the rent and without it on one side, against the substitute tax on the rent on the other.

The cedolare column also gains the registration tax and stamp duty saved on the lease. The ordinary column must be credited with what the cedolare takes away: deductible expenses and tax credits that could no longer be used on that income, and the right to update the rent.

The least clear-cut case is an owner on a modest income, whose marginal rate sits at the bottom of the scale and who has ample tax credits to use. Here the edge of the flat rate narrows, and the registration tax saved may turn out to decide the matter. It has to be computed, not assumed.

One factor escapes any single-year sum: giving up rent updates. When prices rise, frozen rent loses real value year after year. Opting in trades a certain tax saving for a rent that stands still, a trade-off the second module shows how to revisit at every contract year.

Questions to ask before signing

Before ticking the cedolare box on the RLI form, it pays to reread the lease against a fixed checklist. Every negative answer closes the door either to the regime or to the reduced rate, and discovering it after registration costs the registration tax already paid, or a whole year at the higher rate.

• Is the landlord an individual acting outside any business, craft or profession?
• Is the property a dwelling from A/1 to A/11 other than A/10, or one of its appurtenances, let for residential use?
• Does the tenant act outside any business or self-employed activity?
• Is the lease a canone concordato lease, and is the municipality one of those that qualify for the reduced rate?
• Do all co-owners intend to opt in, or will someone stay in the ordinary regime?
• Is the landlord prepared to give up rent updates, ISTAT indexation included?

The first three questions settle whether the cedolare is possible at all; the fourth settles what it costs; the last two settle whether it is worth it. The order also helps when explaining the choice to a tenant or a co-owner, who often know the percentage and nothing about the conditions.