Italy proposes Irpef cut and 5% VAT on rentals in 2027 fiscal plan

Vice‑minister of Economy Maurizio Leo outlined Italy’s 2027 fiscal proposal, highlighting a reduction of the VAT rate on residential rentals from 10% to 5% to aid young renters and stimulate construction. The plan also calls for cutting the Irpef rate for incomes between €50,000 and €60,000 from 43% to 33%, and lowering the second Irpef bracket from 25% to 23% for earnings up to €28,000, alongside an increased deduction for salaried workers and a higher no‑tax threshold.

An analysis by the Unimpresa research centre estimated that the Irpef revenue in 2025 will fall by €7.2 billion, reaching €242.2 billion, a 2.9% decline from 2024 but still above 2023 levels. The same study noted improvements in tax administration, with active Irpef receivables dropping 12.2% and the compliance ratio rising to 91.3%. Other tax streams, such as autonomous‑worker withholdings and corporate Ires, showed modest increases.