If you own a high-end property and want to rent it out with stability and profitability, you’ve probably wondered whether it’s possible to apply the flat-rate tax (cedolare secca) even when the tenant is a company—for example, a business like Horizon Luxury Homes that signs a 4+4 residential lease and enhances the property through premium short-term rentals. Until recently, the answer was no. But today the scenario has changed, thanks to a recent ruling by the Italian Supreme Court that opens up new opportunities for landlords. Here’s what you need to know.
What is the flat-rate tax and why is it attractive?
La cedolare secca è un regime fiscale opzionale che consente di pagare un’imposta sostitutiva (21% o 10%) sui canoni The flat-rate tax (cedolare secca) is an optional tax regime that allows landlords to pay a flat tax (21% or 10%) on rental income, instead of ordinary income tax (IRPEF), regional/municipal surcharges, and registration or stamp duties.
Key benefits:
- Fixed tax rate, often lower than standard taxation
- No registration or stamp duties
- Simplified fiscal and administrative management
- Easier to predict net returns
Until now, however, the flat-rate tax was not available if the tenant was a business entity. This was due to the provision in Article 3 of Legislative Decree 23/2011, which excluded this option when the lease was signed by entities acting in the course of business, trade, or profession.
The breakthrough: Supreme Court ruling no. 12395/2024
With a landmark ruling filed on May 7, 2024, the Italian Supreme Court (ruling no. 12395/2024) clarified that the flat-rate tax can be applied even when the tenant is a company, provided that the property is used as a residence for employees, collaborators, clients, or suppliers.
In short, if the use is residential and not commercial, and no direct business activity takes place in the property, the landlord can opt for the flat-rate tax, even when the lease is signed by a company.
This reinterpretation has a direct impact on business models like Horizon Luxury Homes, where the property is sublet for temporary residential purposes, such as in the premium short-stay market.
How it works in the 4+4 lease model with subletting to Horizon Luxury Homes
In the Horizon Luxury Homes operational model, the lease signed with the landlord is a 4+4 residential contract, in which:
- Horizon Luxury Homes acts as the tenant
- The property is exclusively used as a residence, even if through short-term subletting
- The residential use designation is respected, and no commercial activity is carried out directly on-site
Thanks to the 2024 ruling, the landlord can now:
- Register the lease with the flat-rate tax option
- Benefit from the 21% substitute tax
- Avoid registration and stamp duties
- Enjoy a stable, long-term guaranteed rent
When and how to opt in
The flat-rate tax option must be exercised:
- At the time of contract registration with the Revenue Agency (via RLI form), or
- In the annual tax return, if the option is made afterward (effective only for that tax year)
In the case of subletting, it is crucial that:
- The residential use of the property is clearly stated
Subletting is expressly allowed, and usage complies with the residential purpose
A new horizon for property investment
This legal update makes the flat-rate tax regime an even more strategic tool for landlords who want to:
- Rent in a stable and tax-efficient way
- Delegate management to a professional company like Horizon Luxury Homes
- Maximize net income, while avoiding operational burdens
A 4+4 contract with flat-rate tax and professional management by Horizon Luxury Homes is now one of the most advantageous solutions to enhance luxury real estate, especially in top-tier tourist destinations.
