The most common rental contracts in Italy
The Four Types of Rental Contracts:
- Unrestricted contracts (contratto di locazione a canone libero) is a long–term contract lasting 4 years which is renewable for another 4 years. The rent is determined freely.
- Conventional contracts (contratto a canone concordato) is a contract that lasts for 3 years with the possibility of renewing for another 2 years. It generally has a lower rent than the market price. This type of contract allows the owner to claim for a tax break.
- Transitory contracts (contratto di locazione ad uso transitorio) are for short-term rentals. They last a minimum of 1 month up to a maximum of 18 months. After the expiration date they are not renewable.
- Student contracts (contratto di locazione a favore degli studenti universitari) are governed by agreements with local cities with universities. They can last anywhere from 6 months to 3 years and have an automatic renewal that same duration unless the contract is terminated. Rental price for student contracts is freely determined.
A Contract Must Include:
- A clause confirming that the tenant has received an Energy Performance Certificate (Attestato di Prestazione Energetica);
- Annual amount of rent;
- Community costs to be paid by the tenant;
- Amount of deposit (usually 3 months worth of rent);
- Terms and conditions in order to terminate the contract by either party (generally notice must be given 6 months in advance);
- Terms and conditions relating to upkeep of the property.
The annual amount of rent established in the contract cannot be altered for the entirety of its duration once it goes into effect. This is to give the renter security and to prevent them from being taken advantage of.
● Trash Service;
● TV tax (if you own a TV).
Yes, the TV tax is real. It is figured into the cost of the electric bill in order to combat evasion to pay it, as absurd as it seems. The cost is around €90 per year as of 2018.
Companies Planning to Earn on Rentals:
- A landlord must register the lease agreement within 30 days. The lease agreement is subject to payment of registration tax and stamp tax unless the landlord chooses a flat tax;
- With multi-annual lease contracts, the registration tax is due once per year and is set at 2% with a minimum payment of €67;
- A stamp (marca da bollo) must be affixed and costs €32 for contracts less than four pages or 100 lines. If it exceeds that requirement, the cost goes up to €64 with eight pages or 200 lines and goes on in the same fashion with the addition of 4 additional pages or 100 lines;
- The landlord must also inform the local police within 48 hours about the new contract;
- All rental income must be declared in the owner’s annual tax declaration.
Landlords who grant additional benefits to the renters may also benefit in terms of substantially lower income tax, municipal tax and registration tax. In terms of turning a profit, contracts oriented towards students generate a large income because the rent is usually short-term, especially in the case of foreign and Erasmus students, and can be freely determined between the parties.
Terminating Rental Contracts:
It’s always important to keep in mind what was previously mentioned: Italian law provides a lot of protection for renters and significantly less for owners.