Plan to raise tax on short‑term rentals sparks division within ruling coalition.Italy’s government has revealed a plan to raise the flat-rate tax on short‑term rentals — the type of tourist accommodation offered via platforms such as Airbnb — as part of its 2026 budget draft.Currently the flat tax is 21 per cent on the first rental property and 26 per cent on additional properties, however the planned changes would see this two-tier system scrapped, with all property owners paying 26 per cent. The five per cent increase is being justified as part of broader fiscal efforts to address public finances in a fresh signal of budgetary tightening by premier Giorgia Meloni's government. However the tax hike has triggered immediate push‑back from Meloni's coalition partners, with the right-wing Lega and centre-right Forza Italia publicly opposing the move. Lega leader and deputy prime minister Matteo Salvini told state broadcaster RAI Tre that the measure "will not be approved” and pledged it would be repealed or revised during the parliamentary debate. Antonio Tajani, deputy premier and leader of Forza Italia, described the measure as "a mistake that can be corrected". Estimates suggest that for typical households renting out a property for short tourist stays (up to a month), the tax rise could translate to roughly €1,300 extra per year.  Tourism vs fiscal responsibility Italy, a major global tourist destination, has seen its vacation‑rental market flourish in recent years — with billions of euros of rental income generated nationwide. Under the current 21 per cent rate, many small landlords have benefited from a relatively simple tax regime for single properties let out short‑term. The new 26 per cent rate threatens to reduce net returns, potentially discouraging investment or leading to higher rental prices for tourists.Several tourism‑heavy regions and local property associations have voiced concern. They argue that the net impact might be higher costs for homeowners or reduced supply of short‑term units — both unfavourable for a sector still recovering from pandemic disruptions. From the government’s standpoint, the measure is part of a broader effort to broaden tax bases and reduce reliance on volatile revenue streams. But the political risk is real: incompatibility between fiscal goals and the tourism sector’s health could spark backlash among voters in regions such as Liguria, Sicily and parts of central Italy. Coalition rifts and parliamentary uncertainty The announcement has exposed fault‑lines within the coalition government which this week marked three years in office. While Meloni’s cabinet still controls a majority, public disagreements reveal internal tensions. Sal­vini’s statement suggests the measure may not survive unaltered through parliamentary scrutiny. The open criticism of a key budget proposal raises questions about discipline and cohesion within the coalition — which could delay approval of the budget or force compromises that dilute its fiscal impact. Parliamentary debates in the coming weeks are expected to be lively. Opposition parties may seize upon the measure to portray the government as out of touch with small‑property owners and families who rely on tourism income. What it means for property‑owners and tourists For individual landlords the message is clear: net income from short‑term rentals is likely to shrink under the proposed tax rise. Some may consider shifting to longer‑term leases, or exiting the market altogether — reducing availability of tourist‑friendly housing in popular destinations. For tourists, fewer short‑term units or higher rental prices may be the knock‑on effect — particularly in smaller towns where accommodation supply is more limited. Local economies that rely heavily on holiday‑lettings may see some secondary impact if owners scale back operations. On the policy side, the proposed reform underscores a broader shift in Italy’s approach: using taxation as a lever to stabilise revenue and manage economic risk — rather than relying purely on growth and consumption.

Italy’s government has revealed a plan to raise the flat-rate tax on short‑term rentals — the type of tourist accommodation offered via platforms such as Airbnb — as part of its 2026 budget draft. Currently the flat tax is 21 per cent on the first rental property and 26 per cent on additional properties, however the planned changes would see this two-tier system scrapped, with all property owners paying 26 per cent. The five per cent increase is being justified as part of broader fiscal efforts to address public finances in a fresh signal of budgetary tightening by premier Giorgia Meloni's government. However the tax hike has triggered immediate push‑back from Meloni's coalition partners, with the right-wing Lega and centre-right Forza Italia publicly opposing the move. Lega leader and deputy prime minister Matteo Salvini told state broadcaster RAI Tre that the measure "will not be approved” and pledged it would be repealed or revised during the parliamentary debate. Estimates suggest that for typical households renting out a property for short tourist stays (up to a month), the tax rise could translate to roughly €1,300 extra per year.  Italy, a major global tourist destination, has seen its vacation‑rental market flourish in recent years — with billions of euros of rental income generated nationwide. Under the current 21 per cent rate, many small landlords have benefited from a relatively simple tax regime for single properties let out short‑term. The new 26 per cent rate threatens to reduce net returns, potentially discouraging investment or leading to higher rental prices for tourists.Several tourism‑heavy regions and local property associations have voiced concern. They argue that the net impact might be higher costs for homeowners or reduced supply of short‑term units — both unfavourable for a sector still recovering from pandemic disruptions. From the government’s standpoint, the measure is part of a broader effort to broaden tax bases and reduce reliance on volatile revenue streams. But the political risk is real: incompatibility between fiscal goals and the tourism sector’s health could spark backlash among voters in regions such as Liguria, Sicily and parts of central Italy. The announcement has exposed fault‑lines within the coalition government which this week . While Meloni’s cabinet still controls a majority, public disagreements reveal internal tensions. Sal­vini’s statement suggests the measure may not survive unaltered through parliamentary scrutiny. The open criticism of a key budget proposal raises questions about discipline and cohesion within the coalition — which could delay approval of the budget or force compromises that dilute its fiscal impact. Parliamentary debates in the coming weeks are expected to be lively. Opposition parties may seize upon the measure to portray the government as out of touch with small‑property owners and families who rely on tourism income. For individual landlords the message is clear: net income from short‑term rentals is likely to shrink under the proposed tax rise. Some may consider shifting to longer‑term leases, or exiting the market altogether — reducing availability of tourist‑friendly housing in popular destinations. For tourists, fewer short‑term units or higher rental prices may be the knock‑on effect — particularly in smaller towns where accommodation supply is more limited. Local economies that rely heavily on holiday‑lettings may see some secondary impact if owners scale back operations. On the policy side, the proposed reform underscores a broader shift in Italy’s approach: using taxation as a lever to stabilise revenue and manage economic risk — rather than relying purely on growth and consumption.