Dry rent 2024, how does it work? Guide to subsidized taxation of leases

The cedolare secca is the replacement IRPEF regime of taxation of rents, which can be applied for contracts related to real estate for housing purposes and which provides for the application of three different rates.

The dry coupon is equal to 21 percent for the generality of leases but, subject to specific requirements applies at the rate of 10 percent, with obvious advantages therefore on the front of the tax due in place ofIRPEF, additional taxes but also registration tax and stamp duty.

One can exercise the option for dry coupon when registering the contract, using the RLI form, but also when extending it.

These are the general rules laid down, on which the changes provided by Budget Law 2024 intervene.

Dry coupon as of Jan. 1 is going for three, and in parallel with the 21 and 10 percent rates, the new 26 percent taxation provided for short-term rentals debuts. The new dry coupon will apply when renting for short periods of more than one apartment per year, and in the following paragraphs we will analyze the planned changes in detail.

Dry coupon of 21 percent: calculation and requirements

The dry coupon of 21 percent is the most widely applied, as net of subjective conditions there are no special limits to access it.

Individuals owning the right to own or enjoy real estate may opt for the higher rate, but only outside the exercise of business, arts or professions.

Rental properties to which substitute taxation can be applied must fall under cadastral categories A1 to A11 and be for residential use. Dry coupon also applies to the appurtenances of such properties.

On the other hand, it is not possible to opt for it for commercial contracts, even though the provision of extending dry coupon to the renting of stores and offices is planned as part of the tax reform enabling act.

From a point of view of the expected benefits, the 21 percent dry coupon not only provides for reduced taxation compared to IRPEF, but also replaces municipal and regional surtaxes, as well as no stamp and registration taxes are due when registering the contract.

Dry rent of 10 percent: to which municipalities, contracts and properties does it apply?

More advantageous is the dry coupon of 10 percent provided for contracts with an agreed fee, which, however, applies in the following cases:

• In municipalities with a lack of housing solutions or densely populated;
• To leases to college students;
• In municipalities where there have been natural disasters;
• To transitional leases governed by Law no. 431/1998.

The municipalities that fall under the first point are: Bari, Bologna, Catania, Florence, Genoa, Milan, Naples, Palermo, Rome, Turin and Venice, neighboring municipalities and other provincial capitals.

Thus, the conditions for applying the reduced 10 percent dry coupon are more stringent, which, first of all, can be exercised only in the case of fair-rent leases, for which it is necessary to be assisted by the organizations of building owners and tenants that are signatories to the Territorial Agreement.

For non-assisted contracts, on the other hand, a certificate must be issued by the organizations that are signatories to the agreement. The document must ascertain the requirements for access to subsidized taxation.

Dry rentals 2024, rate at 26 percent

Going up from January 1, the Dry coupon on short rentals. While until December 31, 2023, the rate applied is that of 21 percent, as of January 1, 2024, the Budget Law provides for the Raising taxation to 26 percent.

In detail, the 26 percent taxation will apply to short leases of up to 30 days, including contracts involving the provision of linen and cleaning services for premises, entered into directly or through entities engaged in the business of real estate brokerage, including operators of online portals.

The heavier taxation, however, will be limited to those who grant short-term leases for more than one apartment during the year, with the exclusion of one property.

When to pay the down payment and the balance of the dry coupon tax

Dry coupon is paid on the same due dates aspersonal income tax.

Excluding the first year, for which the tax base cannot be defined, the down payment and balance system will apply for subsequent years.

Thedown payment must be paid:

• in a lump sum, by November 30, if the amount is less than 257.52 euros;
• In two installments, if the amount due is more than 257.52 euros:
  • the first, by 40 percent, by June 30;
  • the second, of the remaining 60 percent, by November 30.

The balance, on the other hand, must be paid by June 30 of the year following the reference year.

The tax codes to be entered in the F24 form for payment are those shown in the summary table.

Dry rent, does it pay off? Assessments to be made

Having clarified the instructions for payment and the amounts to be paid, let’s now look at who is better off opting for dry coupon.

Here again, the calculation of the tax to be paid is decisive; if it is higher than IRPEF, it is obviously not worthwhile to choose the substitute taxation.

At the fiscal level, the following rules should be kept in mind:

The rental income under the dry coupon scheme follows the following rules:

• is excluded from total income;
• on the income subject to the coupon and on the coupon itself deductible charges and deductions cannot be claimed;
• the income subject to the coupon must be included in the income for the purposes of recognizing the entitlement to or determining deductions, deductions or benefits of any kind related to the possession of income requirements (determination of Isee, determination of income to be considered dependent).

Dry coupon is convenient then if the10 percent rate can be applied.

Otherwise, it is not immediately identifiable when it agrees even with the application of the21 percent rate.

In any case, it is necessary to start by considering the taxpayer’s income.

In fact, it should be remembered that below a certain threshold (set at 8,125 euros) no taxes are due.

In this case it is therefore advisable to remain in the IRPEF taxation regime, since adherence to the dry coupon does not have exemption thresholds and the payment will be due in any case.

For taxpayers in the so-called “no tax area,” with incomes up to 8,174 euros per year, it is not worthwhile to move from IRPEF taxation, as taxes are not due as opposed to the substituted taxation regime.

Equally intuitively, taxpayers with the highest incomes have an advantage in applying the dry coupon for avoiding exceeding an IRPEF bracket by cumulating land income and labor income.

For intermediate situations, however, you will have to calculate the amount of deductions to make sure that by choosing the dry coupon you do not have sufficient tax capacity (remember that no deductions and deductions apply on the land income in question).

In essence, there could be cases where, despite the application of IRPEF at 23 to 43 percent, this taxation could still be more convenient due to deductions and allowances.

How to pay dry coupon: option with RLI form and fulfillments

The option for dry coupon can be exercised at the time of contract registration or later.

In the case of registration, the option must be communicated with  RLI form,  which is precisely necessary for the registration of the contract.

Thereafter it can be exercised in case of renewal, within 30 days after the expiration of the contract, equally using the same RLI form.

Similar rules apply to extension.

In the case of short leases, that is, rentals that do not exceed 30 days, since registration is not mandatory you can opt for the dry coupon directly in the tax return.

The choice of dry coupon must be communicated by the landlord to the tenant By registered letter. With this choice, the fee update is waived, even if it is provided for in the stipulated contract.

If the waiver ofrent adjustment is already stated in the contract, then sending the registered letter is not mandatory.

If the notice is not sent, in case of lease extension, in some cases the taxation does not lapse.

However, the landlord must havebehaved consistently, that is, made the payments due and regularly declared the income received.