The Italian Parliament approved on Tuesday, December 30th, the 2026 BudgetThe text was approved on schedule, with the goal of reducing the deficit to less than 3% of GDP by 2026.
Key points include cuts in income tax, maintenance of bonuses for home renovations, and changes in taxation for new high-net-worth foreign residents.
Below are the main measures that directly affect foreign citizens living or planning to live in Italy.
Cut in income tax (Irpef)
Taxpayers with an income between 28.001 and 50.000 euros per year will have their income tax rate reduced from 35% to 33%.
The remaining lanes remain unchanged:
• 23% for incomes up to €28.000
• 43% for incomes above 50.000 euros
Salaries up to 33.000 euros per year will have a reduced tax rate of 5% on salary increases.
Short Term Rentals
The government maintained the current taxation for short-term rentals after backing down from a proposed increase.
The fixed rate remains at:
• 21% for those who rent a single property directly or through platforms like Airbnb and Booking.
• 26% for those who rent two or more properties on these platforms
Taxation for wealthy foreigners
From January 1, 2026, the flat tax for new high-net-worth foreign residents will increase from €200.000 to €300.000 per year.
For family members, the fee increases from 25.000 to 50.000 euros per person.
The model allows for paying a fixed amount on income earned abroad for up to 15 years, instead of following the standard Italian taxation, which can reach 43%.
The change only applies to those who transfer their tax residence to Italy from 2026 onwards. Those already participating in the scheme will retain the old rates.
Incentives for working mothers
Women on temporary contracts or self-employed, with at least two children and an annual income of up to €40.000, will have their monthly allowance increased: from €40 to €60.
Another benefit remains in effect for mothers with three or more children and a permanent employment contract: an exemption of up to 3.000 euros annually in social security contributions.
Bonus for home renovations
Incentives for home renovations have been extended until the end of 2026.
• Ecobonus: continues with a 36% or 50% discount, depending on the type of project, until 2026. It drops to 30% in 2027.
• Standard renovation bonus: remains at 50% with a ceiling of 96.000 euros per unit until the end of 2026. After that, it returns to 36%.
• Associated bonuses (furniture, common areas in condominiums): also extended for another year.
These amounts can be deducted for up to 10 years on your income tax return.
Hiring incentives
Companies that hire young people, women in vulnerable situations, or people residing in southern Italy on permanent contracts will have their social security contributions reduced for up to 24 months.
The measure is valid throughout 2026 and directly benefits employers.
New fee for orders from outside the European Union.
Starting in 2026, a flat fee of 2 euros will be charged on orders from countries outside the European Union with a value of less than 150 euros.
The fee covers most online purchases from countries such as China, the United Kingdom, and... United States.
According to the government, the fee is intended to cover administrative costs related to the new customs requirements. Critics argue that the measure could primarily affect low-income consumers.
