Italy’s government is facing a heated internal battle over a new proposal to raise taxes on short-term Airbnb-style rentals. The plan, part of next year’s draft budget, aims to tackle the country’s deepening housing crisis — but it’s also threatening to fracture Prime Minister Giorgia Meloni’s ruling coalition.
The finance ministry has suggested a flat 26% tax on all short-term rental income, replacing the current tiered system that taxes the first property at 21% and additional ones at higher rates. Officials say the change could generate more than €100 million a year and help curb the surge in homes being converted into tourist accommodations instead of long-term rentals.
Supporters argue the move is needed to cool off Italy’s overheated housing market, especially in cities like Rome, Florence, and Venice, where short-term rentals now make up as much as 13% of all available housing. In Venice alone, over one in ten potential homes are now holiday lets, squeezing locals out of affordable options.
But not everyone is on board. Key allies within Meloni’s coalition — including League leader Matteo Salvini and Foreign Minister Antonio Tajani of Forza Italia — have blasted the plan as an unfair blow to middle-class property owners. They say the tax would punish retirees and families who rent out small apartments to supplement their income, and have vowed to block it before the final budget passes.
Airbnb itself has criticized the proposal, warning that it unfairly targets hosts who play a key role in supporting Italy’s booming tourism sector. In the first eight months of 2025 alone, Italian property owners earned more than €8 billion from short-term bookings, and the government collected nearly €1 billion in related taxes last year.
Still, many housing advocates say the proposed tax hike won’t be enough. They argue that without tougher local regulations to limit rentals and boost affordable housing supply, landlords might simply pass on the extra cost to tourists — or keep properties vacant instead of renting long-term.
In the end, Italy’s “Airbnb tax” debate is about more than just numbers. It’s a political balancing act between keeping tourism thriving, protecting local residents, and holding together a fragile coalition — with the future of Italy’s housing market hanging in the balance.
