Regime forfettario for short-term rentals: when it wins
The regime forfettario (Italian flat-rate tax scheme) is one of the most common tax setups for Italian property managers starting out: 15% rate (5% during the startup years), a 40% profitability coefficient on revenue, and an €85,000 annual ceiling. This guide shows when it beats the simplified scheme, runs the numbers with concrete examples, and explains what changes for a property manager versus a private host.
In sintesi
Rate: 15% (or 5% for new activities during the first 5 years) on taxable income.
Short-term rental profitability coefficient: 40%. Taxable income equals 40% of total revenue.
Ceiling: €85,000 in annual revenue. Above this, you exit the regime forfettario.
VAT: not applied (and not deductible on purchases either).
When it wins: when real costs sit below 60% of revenue. Above that, evaluate the simplified scheme (which deducts real costs).
Even with a single property? Yes — above about €15,000 in annual turnover, the startup regime forfettario beats the 21% cedolare secca (Italian flat-rate rental tax). See full comparison →
Worked examples
Example 1: first-year PM on the startup regime
A newly registered property manager (PM) with €60,000 in annual revenue (e.g. 15 units on revenue share):
| Total revenue | €60,000 |
| Profitability coefficient (40%) | ×40% |
| Taxable income | €24,000 |
| Startup rate | ×5% |
| Substitute tax due | €1,200 |
Effective tax rate: 2.0% of total revenue. Extremely competitive versus alternative schemes during the first 5 years.
Example 2: established PM on the standard rate
A property manager in year six with €70,000 in revenue:
| Total revenue | €70,000 |
| Taxable income (40%) | €28,000 |
| Standard rate | ×15% |
| Substitute tax | €4,200 |
Effective tax rate: 6.0% of revenue. Still competitive versus the simplified scheme for businesses with costs below 60% of revenue.
Example 3: regime forfettario vs. simplified scheme
A PM with €70,000 in revenue and different real-cost structures:
| Cost scenario | Regime forfettario (15%) | Simplified (~30%)* | Winner |
|---|---|---|---|
| Costs at 30% of revenue (€21,000) | €4,200 | ~€14,700 | Regime forfettario |
| Costs at 50% of revenue (€35,000) | €4,200 | ~€10,500 | Regime forfettario |
| Costs at 70% of revenue (€49,000) | €4,200 | ~€6,300 | Regime forfettario (marginally) |
| Costs at 80% of revenue (€56,000) | €4,200 | ~€4,200 | Tie — evaluate VAT impact |
* Simplified estimate (IRPEF on average brackets 23-43% + IRAP). Exact values depend on your total income and applicable deductions/credits. Always verify with an accountant (commercialista).
INPS social security contributions: the cost line the cedolare secca doesn't have
Opening a partita IVA (Italian VAT number, P.IVA) on the regime forfettario also means registering with the correct social-security scheme. For short-term rentals run as a business activity (ATECO codes in the 55.20.5x family), this is typically the INPS Artisans/Traders scheme. Contributions follow two tiers: up to the minimum contribution threshold you pay a flat annual minimum; above the threshold, contributions become a percentage of the excess income. The exact minimum and rate change every year — check the INPS website at the time of registration.
Those who meet the regime forfettario requirements can request the 35% reduction on contributions. The request is not automatic: it must be filed with INPS at registration (using the dedicated form) or by 28 February of the year you want the reduction to apply.
Why this matters when comparing with cedolare secca: the cedolare secca does not include social-security contributions. When you compare net profit between cedolare and the regime forfettario, INPS is a cost line that only exists on the P.IVA side. That's what raises the "break-even threshold" above which the regime forfettario starts to win. The exact threshold depends on which ATECO code is used (because the profitability coefficient changes) and on the year — it has to be computed case by case with an accountant (commercialista).
Pros and cons of the regime forfettario for property managers
Pros
- Low rate: 15% (or 5% startup) versus IRPEF brackets of 23-43% on the simplified scheme
- Simple math: no need to keep full accounting books
- No VAT on invoices: you issue invoices to clients without VAT
- Lighter compliance: fewer tax deadlines and filings than the simplified/ordinary schemes
Cons
- Real costs not deductible: if you have heavy costs (staff, foreign software, marketing), the fixed 40% coefficient can be less favorable than the simplified scheme
- VAT on purchases not deductible: everything you buy (PMS, software, supplies, etc.) carries VAT that you absorb as a cost
- €85,000 ceiling: fast-growing businesses hit it within 1-2 years and have to switch schemes
- Access restrictions: some requirements exclude you from the regime forfettario (e.g. equity stakes in companies, certain employment income)
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