The Finance Ministry is studying the return of a 21% flat tax on new leases of small shops, with a size threshold between 250 and 300 square metres. The 2019 precedent, landlords' numbers with inflation at 3.3% and the limits of a tax lever against retail desertification.
The 2027 budget may bring back a flat tax on commercial rents. Deputy Finance Minister Maurizio Leo has discussed it, and technical talks between the ministry, the property owners' association Confedilizia and the retailers' association Confcommercio have been running for weeks. The scheme under discussion is narrow: a 21% rate, only for leases signed from 2027, only for shops in cadastral category C/1 below a threshold of 250 to 300 square metres, with particular attention to vacant units. It would replace income tax, local surcharges, registration tax and stamp duty.
The 2019 precedent
The 2019 budget introduced the same rate for C/1 units up to 600 square metres, excluding appurtenances, on leases signed that year. It lasted twelve months and was not renewed. An anti-avoidance clause excluded leases in force on 15 October 2018 that were terminated early and rewritten between the same parties; a similar rule is likely.
No public assessment of that year's effect on vacancies appears to exist, a serious gap for anyone estimating the new version. Confedilizia, using the ministry's take-up estimate and about 112,000 new leases a year, puts the cost at about €170 million annually if the 2019 model were replicated, and argues the tax would increase the number of leases.
Why the threshold matters
Moving from 600 to 250 square metres narrows eligibility sharply, and not arbitrarily. Under Legislative Decree 114 of 1998, 250 square metres is the maximum size of a neighbourhood shop in municipalities above 10,000 inhabitants. A 250 threshold aligns the tax lever with the legal definition of local retail and excludes medium-sized stores, showrooms and most chain restaurants. At 300 the perimeter widens slightly but loses that coherence.
A second filter gets less attention. The flat tax is reserved for individuals not leasing as a business. Funds, asset managers and property companies, which own most units on prime streets in large cities, are excluded by design. The measure targets fragmented private ownership, dominant on secondary shopping streets and in the centres of mid-sized towns.
The landlord's numbers
For an individual in the top bracket, the combined levy on a commercial rent, with 43% income tax on 95% of the rent plus surcharges and registration tax, is around 44%, varying by region. The flat tax would cut it to 21%. On €18,000 of annual rent, the saving is just over €4,000.
A retiree with a single shop in the 23% bracket gains about four points of rent.
Against this stands the waiver of inflation indexation, which Law 392 of 1978 allows on commercial leases up to 75% of the price change. In 2019 Italian inflation was below 1% and the waiver cost little. In August 2026 it was 3.3%. If it stayed there, forgone indexation would reach about 13% of rent by year six. For top-bracket owners the flat tax remains clearly favourable; for low-bracket owners, from year three the lost indexation exceeds the annual tax saving.
Who captures the benefit
Confcommercio wants the flat tax tied to an agreed rent cut. Confedilizia objects that the indexation waiver already transfers value to tenants.
The market answers on its own, street by street. Where units have been empty for months, demand is weak, landlords have little bargaining power and the tax saving tends to show up as lower asking rents. Where demand is strong, the landlord keeps the benefit. A legal requirement would bite mainly where it is not needed.
The limits of a tax lever
According to Confcommercio's "Città e demografia d'impresa" study, about 156,000 shops and street-market businesses closed between 2012 and 2025 in the 122 mid-to-large municipalities analysed, with the pace rising to 3.1% a year in 2025. Belluno, Vercelli and Trieste lost more than a third of their small shops.
These are largely demand-side causes: e-commerce, demographic decline, spending shifting to services and food. A lower tax on the landlord reduces occupancy costs. It does not bring customers back to a street that has lost them.
A provisional assessment
Compared with 2019, the new flat tax would be better targeted, consistent with the definition of neighbourhood retail and cheap for the Treasury. Its real effect will depend on duration, since a regime limited to one signing year does little to shape decisions on six-year renewable leases, on inflation, which erodes the advantage for lower-income owners, and on whether there is retail demand to capture, which no tax rate can create where it is missing.