Taxes for landlords in Sicily, Italy: what applies to short-term rentals in 2026

If you rent out a vacation home in Sicily for short stays, you owe Italian income tax on the rent first. Private landlords mostly pay the flat tax cedolare secca: 26% of the gross rent, or 21% on one unit of their choice, and from 2026 for no more than two apartments per tax year (Art. 1 para. 17 L. 199/2025) ¹. On top of that come the municipal tourist tax, for which you are liable, and the municipal property tax IMU. If you are tax resident in Germany, the Italian rent stays exempt there under the tax treaty, provided Italy actually taxes it, with no progression clause and no entry on your German tax return ²²²⁶²⁸.

The layers at a glance

A vacation home in Sicily is subject to national Italian tax rules, municipal levies, EU reporting duties and, if you live in Germany, German tax law.

Income tax in Italy: cedolare secca in 2026

According to the Agenzia delle Entrate guide “Locazioni brevi” of April 2026, cedolare secca applies to residential property in Italy, to rental contracts of up to 30 days and to individuals acting outside a business. Linen and cleaning count as part of a short-term rental ¹². The tax is calculated on the gross rent, with no 5% flat deduction ¹.

• The standard rate has been 26% since January 1, 2024 (L. 213/2023) ¹.
• For one unit, which you designate in your tax return, the reduced rate of 21% applies ¹.
• Since 2026, cedolare secca is limited to no more than two apartments per tax year (Art. 1 para. 17 L. 199/2025); until 2025 the limit was four. Beyond that, a business activity is presumed ¹.

Since July 4, 2026, the rule also stands in the new consolidated income tax code: Art. 207 TUIR, introduced by D.Lgs. 117 of June 19, 2026, applies from tax year 2026 and likewise limits the flat tax to individuals acting outside a business ³⁴.

You can choose cedolare secca even if you do not live in Italy. The law sets no residence requirement: the option is open to the owner or the holder of a right in rem to use the property, and the tax authority limits it to individuals who do not act as a business ⁶⁷. That Italy may tax the rent from a house in Sicily follows, for German residents, from Art. 6 para. 1 of the treaty ²². You report it on the Modello REDDITI PF: non-residents use the same version as residents, enter the income from the building in Quadro RB (with cedolare secca also in Quadro LC) and need an Italian codice fiscale for it. In that return, your vacation home never counts as your main residence ⁸. What is left of your rent after commission and tax is worked out in the guide Net income from a Sicilian vacation home: what is left after commission and tax (example) with an example.

IMU: the municipal tax on the house

The house itself is subject to the annual municipal tax IMU. The taxpayer is the owner or the holder of a right in rem to use the property, with no residence condition (Art. 1 para. 743 L. 160/2019) ⁹. The exemption for a main residence requires a registered address and actual residence in Italy and does not apply to the vacation home of someone who lives in Germany (Art. 1 para. 741(b) L. 160/2019); the equal treatment of homes owned by non-resident retirees ended in 2020 ¹⁰. Each municipality sets the rate and the due dates.

Withholding by intermediaries: 21% only where payment runs through them

Intermediaries, including online portals, that collect the rent or take part in the payment withhold 21% of the gross rent as an advance on your tax, whichever regime you choose (Art. 4 para. 5 D.L. 50/2017) ¹¹². They pay it with form F24 by the 16th of the following month and issue a certificate. Payment service providers do not count as intermediaries ¹.

A separate duty concerns data. Intermediaries that give professional or technical support when the agreement is concluded report the landlord, the length of the stay, the address, the CIN, the year and the gross amount by June 30 of the following year. If the guest communicates acceptance directly to the landlord, this report is not required ¹. From January 1, 2027, the duties stand in Art. 208 TUIR; the relevant paragraphs of Art. 4 D.L. 50/2017 are repealed, and in substance the rules are merged ⁵. Vacation homes in Sicily need the CIN that appears in this report as well; more in the guide The CIN for vacation rentals in Italy: who needs it, where it must appear and what Sicily adds.

Tourist tax (imposta di soggiorno): the landlord is liable

The tourist tax is a municipal tax of at most €5 per night; some provincial capitals may charge more (Art. 4 paras. 1 and 1-bis D.Lgs. 23/2011). The operator of the accommodation is liable for the payment, has a right of recourse against the guest and files an annual return by June 30 (Art. 4 para. 1-ter D.Lgs. 23/2011) ¹¹. Whoever collects the rent or takes part in the payment is also responsible for the tourist tax; a mere intermediary is not (Art. 4 para. 5-ter D.L. 50/2017) ¹². For Sicily, Art. 35 para. 6 L.R. 6/2025 expressly requires vacation landlords to pay the tourist tax ¹⁴.

Ordinance no. 1527 of January 23, 2026 of the united chambers of the Corte di Cassazione decides only jurisdiction: these disputes belong before the tax courts, not the Corte dei conti. It recalls Cass. 6187/2024, under which the landlord, as “responsabile d'imposta,” pays even if the guest did not, and a 30% sanction under Art. 13 D.Lgs. 471/1997 applies (as cited in Cass. SS.UU. 1527/2026, para. 15). The ordinance itself does not rule on criminal liability (peculato) ¹³.

In Palermo the tourist tax for vacation accommodation and locazioni brevi is €4.00 per person and night (City Council resolution no. 34, effective July 1, 2025), for no more than four consecutive nights. It is paid within 15 days after each calendar quarter ¹⁵¹⁶. Other municipalities set their own rates; ask the municipality where your house is located.

DAC7: what platforms report

Under D.Lgs. no. 32/2023, digital platforms report their providers' income by January 31 of the following calendar year (Art. 10 para. 1). The rental of immovable property is a reportable activity (Art. 11). That covers vacation homes in Sicily rented out through such platforms ¹⁷. From January 1, 2027, the same rules stand in Arts. 210 to 226 of D.Lgs. 141 of August 5, 2026, which repeals Arts. 1 to 17 of D.Lgs. 32/2023. The deadline stays January 31 (Art. 219), and rental of immovable property stays a reportable activity: nothing changes in substance, only the numbering ¹⁸¹⁹.

The German side: exemption without a progression clause

The tax treaty between Germany and Italy was signed on October 18, 1989 (BGBl. II 1990 p. 742) ²⁴, entered into force on December 27, 1992, and applies from January 1, 1993 (Art. 31) ²¹²⁵. Under Art. 6, Italy, as the state where the property is located, may tax the income from a vacation home in Sicily. Germany excludes this income from the German tax base under Art. 24 para. 3(a) (exemption method). The credit method in (b) covers only dividends, interest, royalties and the cases of Arts. 16 and 17, not rent ²².

The exemption has a condition: under the protocol to the treaty, the provision on Art. 24 para. 3(a), the income stays exempt only if it is effectively taxed in Italy in accordance with the treaty ²³. A credit under Sec. 34c EStG does not apply to an exemption.

The treaty reserves the progression clause, but German law rules it out here. Sec. 32b(1) sentence 2 no. 3 EStG excludes treaty-exempt income from the rental of immovable property located in a state other than a third country ²⁶. Under Sec. 2a(2a) sentence 1 no. 1 EStG, third countries are states outside the EU ²⁷. Italy is an EU member, so the rent from Sicily does not raise your German tax rate.

An entry on the German tax return is not provided for: under the official instructions for Anlage AUS 2025, treaty-exempt income is neither entered in the other forms nor, if it is not subject to the progression clause, in lines 36 to 40 of Anlage AUS ²⁸. Keep the Italian return and the payment receipts in case the tax office asks.

Outdated figures: 30% and “four units”

Blogs and older guides quote two figures that are no longer correct for 2026. There is no 30% rate under cedolare secca. The draft of November 2025 that would have set 26% for all apartments was not enacted in that form; the rates remain 21% for one unit and 26% for the second ¹.

The limit of four units is also outdated, twice over. Nationally, cedolare secca has covered only two apartments since 2026 ¹. In Sicily, Art. 5(h) L.R. 12 of May 27, 2026 also lowered the threshold for non-entrepreneurial vacation rentals in Art. 35 para. 1 L.R. 6/2025 from “non più di quattro” to “non più di due unità immobiliari” run by the same operator ¹⁴²⁰.

Next step

How much of your rent is left after commission and cedolare secca is shown in Net income from a Sicilian vacation home: what is left after commission and tax (example). Listing with Terra Mia Immobiliare is free, the commission applies only when a booking is concluded, and the guest pays you directly. This guide summarizes the law as of November 2, 2026 in general terms and is not tax or legal advice. For your individual case, consult a Steuerberater in Germany and a commercialista or avvocato in Italy.