A Practical Guide for Property Owners: Which Option Is Right for You

Monday, August 4, 2025 Elisa

A guide to understanding the differences in the vacation rentals market

Vacation rental or tourist lease – a guide to understanding the differences

From the traveler’s perspective, there is almost no difference: both a vacation home and a tourist rental can be booked online, paid for in advance, and offer a self-contained stay in a private property.

However, for property owners who want to rent out a house in Italy, it is essential to understand the distinction between a simple tourist lease, a business-type tourist lease, and a holiday home (Casa Vacanza, or CAV). Each of these options involves different tax and legal obligations that affect the owner's responsibilities and the services that can be offered.

What is a tourist lease

A tourist lease, or short term rental for tourism purposes, is a contract under 30 days made between two individuals. It does not require registration and is not considered a business activity.

Tax Regime

Earnings fall under property income. The owner can apply the flat rate tax (cedolare secca) at 21 percent or 26 percent in specific cases.

It is not possible to deduct any expenses related to the activity, such as utilities, maintenance, or platform fees.

What is a Business Tourist Lease

When the tourist lease is carried out regularly and with an organized approach, even without additional services, it becomes a business activity.

There is no strict rule, but common factors include:

managing more than four properties
high frequency and duration of stays
using staff or intermediaries

In this case, the owner must:

open a VAT number
register with the Business Register
issue invoices to guests
meet all business and tax requirements

The flat tax (cedolare secca) cannot be applied. Business income taxation is required.

Requirements and Obligations

For the above cases the requirements and obligations are:

notify the local government office (SUAP) of opening, suspension or closure
register the property in the regional register (CIR)
register the property in the national register (CIN)
register the property in the town hall register for the city tax
register and report guest details to the police (Alloggiati Web)
submit tourism data to the regional ISTAT system

What is a Holiday Home (CAV)

A holiday home (Casa Vacanza, CAV) is a non-hotel accommodation option regulated by regional laws. It is similar to a bed and breakfast or guesthouse.

It can be managed:

as a business, with VAT number
as a non-business activity, with lighter obligations but still regulated

Requirements and Obligations

Even if not managed as a business, a CAV must:

notify the local government office (SUAP) of opening, suspension or closure
register the property in the regional register (CIR)
register the property in the national register (CIN)
register the property in the town hall register for the city tax
register and report guest details to the police (Alloggiati Web)
submit tourism data to the regional ISTAT system
display the official price list inside the property

Tax Regime

Income from a CAV is not considered property income. It is treated as miscellaneous income or business income depending on the management type.

The flat tax (cedolare secca) does not apply, but expenses such as utilities, staff, advertising, and maintenance are deductible.

Services Offered

A CAV can provide:

cleaning and linen changes during the stay
extra service
additional services like baby-sitting, transfers, guided tours

In practice, it operates similarly to a small hotel.

Main Differences Between Tourist Lease, Business Lease, and Holiday Home

Feature	Tourist Lease	Business Lease	Holiday Home (CAV)
Duration	Max 30 days *	Max 30 days *	Flexible
Management	Private individual	Business	Business or private
Extra services allowed	Basic cleaning only	Limited, professional	Full range of services
Tax regime	Flat tax (21 or 26 percent)	Standard business tax	Miscellaneous or business
Bureaucracy	Full	Full	Full
Cost deductions	No	Yes	Yes

Which One to Choose

Choosing between tourist lease, business rental, or holiday home depends on:

how many properties are involved
how frequently you rent them out
what type of guests you want to attract
whether you are willing to manage formal obligations

If you rent occasionally and without additional services, a tourist lease is the simplest option.

If you want to offer a professional and full guest experience, a holiday home setup is more appropriate.

Conclusion

In today's dynamic tourism market, knowing the differences between tourist lease, business rental, and holiday home is essential.

It helps you avoid penalties, manage costs efficiently, and offer a high quality stay to your guests.

Thinking of renting out your home for holidays?