Tax Deduction | Rent Expenses

Did you know that you could deduct the rent you pay from your tax return?

The Italian tax code allows natural persons who satisfy certain criteria to deduct the rent paid for residential premises in their tax tax return. This type of deduction does not take into account the rent you pay, but rather it is a lump sum deduction based on the income bracket in which you fall, the type of rental contract, as well as the age of the tenant.

Rent expenses deduction and income bracket

The rent deduction is different based on the gross income you receive. What matter is therefore the gross income level you reach, after deducting any social security contribution payable; you should not then consider your RAL.

The deduction provide two different brackets, the first on up to € 15,493.71 while the second one ends at € 30,987.41; should you make more than that, you cannot claim your rent in your tax return. The lower income bracket provides a more generous deduction than the upper one; the whole idea behind the rent expenses deduction is to facilitate the lower income earners, as rent expenses account for a larger part of their budget.

Rent deduction calculator

Tax Deduction | Rent Expenses
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Tax Deduction:

Types of rental contract

There are various type of rental contract available in the Italian civil law system. For the purpose of this tax break we can consider the only two rental contracts available:

  • Canone libero mercato
  • Canone concordato

The first option translates as free market, therefore there are no caps, nor limitations put on the amount of rent the tenant pays. The second option provides for more regulations, and it requires that the rental contract includes certain conditions, as well as putting a cap on the annual compensation the landlord receives from the tenant. The price per square meter vary depending on the local Council resolution.

The Canone Concordato attracts a larger tax tax relief compare to the free market option, and once again this shows the legislator’s intent to reduce the tax burden on the lower earners.

In addition, individuals between 20 and 30 years of age can claim a further reduction.

Finally, if you can fit more than one category of rent deduction, you can claim the most advantageous one for your personal situation.


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