Italy’s draft 2027 Budget Law
Italy’s Government approved its draft 2027 Budget on 28 October. For international residents, the measures to watch concern personal income tax, self-employment, rental property and home improvements.
The draft will now go before Parliament who may amend, cancel, or add to the proposals before they become law, probably toward the end of this year.
Personal income tax: a potential saving of up to €500
The proposal would extend the 33% IRPEF band from €50,000 to €55,000 for 2027. The proposed bands would therefore be:
| Bracket of Income (annual amounts) | Rate | Cumulative Tax to Top of Band |
|---|---|---|
| On the first €28,000 | 23% | €8,440 |
| Above €28,000 up to €55,000 | 33% | €8,910 |
| Over €55,000 | 43% | — |
The change concerns the slice of taxable income between €50,000 and €55,000. Someone with €52,000 of taxable income would save €200 in gross national IRPEF; at €55,000 or more, the maximum saving would be €500. There would be no saving from this particular change below €50,000. These calculations exclude tax credits and regional and municipal additions. IRPEF proposal and calculations are subject to legislative amendment.
A Higher Regime Forfettario threshold
The Government proposes increasing the annual revenue threshold for the Regime Forfettario from €85,000 to €100,000 for income-tax purposes.
However, the outside the scope of VAT threshold would remain €85,000 pending European authorisation.
Eligibility, transition rules and the treatment of receipts between the two thresholds will need checking against the final legislation.
Landlords: flat tax qualifying agreed-rent contracts
The draft would reduce cedolare secca on qualifying canone concordato residential leases from 10% to 5%, with a proposed 1% rate where the tenant is under 36.
The proposal also extends cedolare secca flat tax applicable to certain residential rental contracts to rents relating to certain commercial premises.
Home improvements
The Government proposes continuation of existing relief know as the Bonus Casa for 2027
The announced package would retain renovation relief at 50% for qualifying expenditure on an owner’s main home and 36% in other cases for 2027. The furniture bonus would also continue, with a €5,000 qualifying expenditure ceiling.
These are proposed tax credits based on the value of qualifying and certified expenditure.
Before budgeting for work, check the final eligibility rules, qualifying expenditure and how much relief your own Italian tax position allows you to use.
Landlords: flat tax qualifying agreed-rent contracts
The draft would reduce cedolare secca on qualifying canone concordato residential leases from 10% to 5%, with a proposed 1% rate where the tenant is under 36.
The proposal also extends cedolare secca flat tax applicable to certain residential rental contracts to rents relating to certain commercial premises.
Exit Tax
also reports an exit-tax proposal, mentioning an €800,000 asset threshold. The scope needs verification against the legislative text: that headline alone does not establish which assets, gains or departing residents would be affected. We would not draw relocation-planning conclusions from it at this stage. ItaliaOggi’s report
For now, these proposals provide a useful planning checklist. Decisions about relocation, invoicing, property expenditure or lease arrangements should be based on the final provisions and their application to your circumstances.
A draft of the Italian 2027 Budget Bill has been released. The proposals remain subject to parliamentary approval and amendment.
The Bill proposes an exit tax for certain individuals transferring their tax residence abroad. The measure could tax unrealised gains on investments even where the individual has not sold the assets or received any proceeds.
For internationally mobile individuals, the proposal raises questions about the timing of departure, the valuation of investments and the availability of funds to pay the tax. Its interaction with Italy’s annual tax residence rules deserves particular attention.
The proposal appears in Article 17 of the draft Budget Bill, It is not yet enacted law.
The draft provides for a ministerial implementing decree. That requirement should not be read as an express postponement of the proposed January 2027 starting date.
See here for more information.
Home improvements
The Government proposes continuation of existing relief know as the Bonus Casa for 2027
The announced package would retain renovation relief at 50% for qualifying expenditure on an owner’s main home and 36% in other cases for 2027. The furniture bonus would also continue, with a €5,000 qualifying expenditure ceiling.
These are proposed tax credits based on the value of qualifying and certified expenditure.
Before budgeting for work, check the final eligibility rules, qualifying expenditure and how much relief your own Italian tax position allows you to use.
Banks, investments and Italian pensions—in brief
The draft includes additional taxation of banks and insurers and a further increase in Italy’s financial transaction tax, commonly called the Tobin tax.
For Italian pensions, reported measures include extending APE sociale and less generous inflation adjustments for higher pensions. Funding for greater retirement flexibility should not be confused with an immediately available new right to retire at 64.
Other Measures
The package also proposes making vehicle-tax exemption permanent for qualifying vehicles up to 80 kW, subject to ownership and other conditions. This is not a general abolition of the Bollo Auto for every vehicle.
For working families, the Government announces enhanced support for mothers, changes to parental leave and childcare vouchers for eligible self-employed parents. Entitlement will depend on the detailed conditions.