An Overview of Tax Duties When Renting Out a Vacation Home in Sicily

If you rent out a holiday home in Sicily (Italy), you are subject to specific tax and administrative obligations. These apply to both local and foreign owners and must be observed carefully to avoid legal issues.

1. Income Tax (Imposta sul Reddito)

All rental income in Sicily must be declared in Italy. There are two options:

• Ordinary Taxation: Income is taxed according to the IRPEF income tax system. Expenses such as maintenance, management, and advertising may be deducted.
• Cedolare Secca: A flat tax on gross rental income. As of 2024, differentiated rates apply:
  • 21%: for long-term rentals or short-term rentals of a single property.
  • 26%: for the second to fourth property if used for short-term rentals (less than 30 days).
  • From the fifth property onward, the activity is considered commercial and subject to regular IRPEF taxation with a VAT number (Partita IVA).

2. Tourist Tax (Tassa di soggiorno)

Most Sicilian municipalities charge a tourist tax that must be paid by guests per night. As the landlord, you are responsible for collecting and forwarding this tax to the local authorities. Rates and exemptions (e.g., for children or long stays) vary by municipality.

3. Guest Registration with Police (Questura)

Landlords in Sicily are required to register all guests within 24 hours of arrival via the Alloggiati Web portal of the Italian police. Prior registration with the local Questura is required. This procedure is mandatory and helps ensure public safety.

4. Municipal Registration of Rental Activity

In numerous instances, rental activity must also be officially registered with the local municipality. An identification code (CIN – Codice Identificativo Nazionale) may also be required and must be displayed on online listings.

5. Value Added Tax (IVA)

If no commercial services (such as breakfast or daily cleaning) are offered, VAT (IVA) is generally not applicable. However, offering additional services may trigger VAT obligations.

6. Tax Declaration in Italy

Even as a non-resident, you must obtain an Italian tax identification number (Codice Fiscale) and may need to file an annual tax return in Italy (Modello Redditi). It is highly recommended to consult a local tax advisor (commercialista).

Note:

Tax regulations may vary by region and municipality in Sicily. Personal advice from a professional tax consultant in Sicily is strongly advised.