TAX & FINANCE
This article dives into how much income you can expect to earn from your Sicilian home, how to make sure you are in line with all your tax obligations, and what you can expect to have left over at the end of the day. It’s part of our comprehensive series of guides for owners.
How much can I earn from my rental property in Sicily?
The short answer is that you can earn excellent rental returns from a nice villa or apartment in Sicily. A typical two-bedroom home in the areas we cover can generate between €20,000 and €25,000 gross per year. Particularly elegant or well-located properties, or those with a third bedroom, can reach €30,000 to €35,000.
It is important to remember that these are gross figures. Once income tax and tourist tax are paid, utility bills and routine maintenance covered, and platform commissions and any property management fees deducted, owners typically keep around half as net profit or reinvestable capital. The exact split depends on how actively you manage the property yourself, and on your individual tax position. Compared to heavily restricted Mediterranean regions like Spain and Southern France, or the congested markets of the Greek Islands and Portugal, Sicily remains an excellent option for investment.
How Solemar can help
The size and cross-market reach of the Solemar Group gives you what other property managers simply cannot: access to clients from all walks of life who have a need for accommodation in Sicily but who have not yet tested the open market. Whether it’s the language students of Solemar Academy or prospective buyers through Property in Sicily.
Our collaborations with the Film and Media industries can get you greater chance of year-round occupancy, and our outstanding reviews add value across our entire portfolio.
Our decades of experience in the industry makes us perfectly positioned to provide expert market analysis when developing your pricing models.
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What taxes will I have to pay on my rental income?
For most private owners, the flat-rate tax (cedolare secca) is the simplest and most attractive regime. This replaces the normal income tax on rental earnings and is applied to income from your first property at the rate of 21%. If you have a second rental property, this income is taxed at 26%.
Since January 2024, Airbnb and most major platforms have been automatically withholding the tax from each payout and remitting it directly to the Italian Inland Revenue (Agenzia delle Entrate) on behalf of owners. This obviously helps with the fight against tax evasion, but is also an improvement for legitimate landlords. An important piece of advice is to remember that these platforms withhold at 21% on all properties – so if you have a second property which is subject to a 26% levy, you will be responsible for paying the additional 5% yourself.
You will also need to collect tourist tax (imposta di soggiorno) from guests and forward it to your local municipality. Rates and reporting deadlines vary, so check with your municipality or ask your accountant (commercialista) for the specific local requirements.See our guide to the legal obligations of renting out a holiday home in Sicily for a full explanation.
Where applicable, sales tax (IVA) on rental services or tourist accommodation is levied at 10%.
How Solemar can help
Solemar’s team of accountants and finance experts will withhold the correct sums on your behalf, regardless of whether it is a first or second property. We will issue you an annual tax certificate (certificazione unica) which you can use directly when you file your tax return.Â
Our guest reception teams will make sure that all necessary tourist tax is collected and handled appropriately on your behalf.
We will always make detailed financial reports available to all property owners.
Can I deduct expenses from my tax bill?
Private landlords cannot deduct costs. It must be made clear that, under the flat-rate tax scheme, a private landlord cannot deduct the costs incurred in managing the tenancy. The tax is therefore calculated on the full gross amount of the booking, even when part of the sum is used to cover cleaning, portal fees and other operating costs.
How Solemar can help
If the property is managed by Solemar Sicilia, the owner pays tax only on the net revenue to which they are entitled, after deducting cleaning costs, portal commissions and the management fee.
Take a look at the comparison below for an illustration:
Property Managed by Owner through AirbnbÂ
Let’s assume that a property is booked for a week under the following conditions:
- Booking cost: €800
- Cleaning fees: €50
- Total paid by the guest: €850
LESS
Portal commission of 15%: €127.50
21% tax withheld (applied to the entire €850 received): €178.50
NET: €544
The owner pays tax even on amounts that do not represent their actual profit, such as the cost of cleaning and the commission deducted by the booking platform.Â
Property Managed through Solemar Sicilia
The customer pays the same sums:
- Booking cost: €800
- Cleaning fees: €50
- Total paid by the guest: €850
LESS
Cleaning fee: €50
30% Solemar fee (applied to the €800 booking cost): €240
SUBTOTAL: €560
LESS
21% tax (applied to the €560 after costs): €117.60
NET: €442.40
For a difference of around €100 euros the owner is relieved of all the tasks and responsibilities involved in managing the property, including marketing and listing the property, pricing strategy, calendar management, cleaning, laundry, check-ins, communication, accounting and the issue of the annual tax statement. The value is clear to see.
How many properties can I rent out before I’m considered to be running a business?
A private individual can rent out two properties before the activity is considered to be a business. Before 2026 it was four, but the threshold has tightened significantly.
Under the current flat-rate (cedolare secca) regime. From your third property onwards, Italian law presumes you are running a business. This triggers the need to open a Partita IVA (the Italian tax code for businesses and sole traders)), maintain proper business accounts and pay standard business income tax in place of the flat rate.
Until the end of 2025 the threshold was four properties, with business activity presumed only from the fifth. The change is significant for anyone building a small portfolio. If you are already operating two units, we would say that it is essential to speak to an accountant (commercialista) before you commit to a third.
Who can give me tax advice for my rental property in Sicily?
An Italian accountant (commercialista) who is familiar with the short-term rental sector is the right person to consult for tax advice about a holiday home.
Tax rules for holiday lettings in Italy have changed significantly in the last two years and continue to evolve. This means that the kind of generalised advice you might find online is hard to trust. You should look for someone whose professional speciality involves staying up to date with the very latest regulations on letting in Sicily.
How Solemar can help
Property managers, like Solemar Sicilia, aren’t qualified to give tax advice. However, we can certainly put you in touch with a reputable commercialista who works with international property owners and, if necessary, speaks your language.