Less Irpef for the middle class, more taxes on short-term rentals, diesel and cigarettes. ISEE reform is coming, family bonuses and more parental leave and a stop at Quota 103. Now the parliamentary process of the Budget Law begins
More taxes on short-term rentals, diesel and cigarettes, reduction in personal income tax for the middle class, ISEE reform and increase in parental leave. Here are some of the main innovations of the 2026 Budget. The 18.7 billion euro Budget Law has received the green light from the State General Accounting Office, the so-called “stamping”, and its parliamentary process now begins. The text went from 137 articles in the draft to 154 fired at the end. On the one hand, therefore, a cut in Irpef and targeted tax relief, on the other an increase in some taxes on consumption and income.
Short-term rentals: 21% coupon only without intermediaries
Let’s start with the squeeze on short-term rentals. The dry tax rate remains at 21%, but only if the owner rents directly. If instead you use a portal or intermediary, such as Airbnb, it rises to 26%. A measure that will affect around 90% of homes and which should bring additional revenue of over 100 million euros per year. The provision, intended to contain the short-term rental market, will be one of the most “discussed” in Parliament.
Irpef and fifth scrapping: cuts to the middle class and new amnesty
The Irpef cut for average incomes has been confirmed: the rate on the second bracket drops from 35% to 33% for those who earn between 28 thousand and 50 thousand euros gross. An intervention worth 2.7 billion per year, which will guarantee up to 440 euros in annual savings, but without benefits for incomes above 200 thousand euros.
The fifth scrapping of tax bills is also arriving: it will be possible to settle tax and social security debts until 2023, paying in installments for up to 54 months with an interest of 4% per year.
Pensions: mini increases and stop at Quota 103
The maneuver provides for an average increase of 20 euros per month for minimum pensions, a measure that will affect approximately 1.1 million pensioners. The Social Ape is extended, but there will not be a new Quota 103 nor the return of the Women’s Option.
Instead, there will be a tightening of the rules for the military and police forces, who will have to remain on duty for up to six months longer by 2028.
Cigarettes and diesel: new excise duties arriving
The government is aiming for over 500 million in revenue in 2026 by realigning excise duties on fuel: +4.05 cents per liter on diesel and -4.05 on petrol. A measure that penalizes those who use diesel cars, over 16 million vehicles in Italy. Taxes on cigarettes are also increasing: in 2026 the average price increase will be 15 cents per pack, which will rise to 41 cents in 2028.
Overtime, bonuses and meal vouchers: selective tax relief
To support the purchasing power of workers, the Budget introduces a series of tax breaks on work.
Overtime, holidays and night work will be taxed at 5% for those with an income of up to 40 thousand euros, with a ceiling of 1,500 euros. In the tourism, commerce and spa sectors, between January and September 2026, a 15% increase on extra hours is expected to incentivize labor.
Productivity bonuses are also tax-free, dropping to 1% (from 5%), with a ceiling increased from 3 thousand to 5 thousand euros and electronic meal vouchers up to 10 euros exempt.
Family and birth rate: confirmed bonuses and longer parental leave
For families, the nursery bonus (up to 3,600 euros per year for ISEE under 40 thousand) and the newborn bonus of one thousand euros are confirmed. Parental leave extends up to the child’s 14th birthday, while sick leave extends up to 10 days. A 20 million fund is arriving for separated or divorced parents who are not assigned the family home.
The bonus for working mothers rises from 40 to 60 euros per month, but only for those who have at least two children (the minor under 10 years old) and an income of up to 40 thousand euros.
ISEE reform: the first house leaves the calculation
The ISEE reform is among the most significant innovations. From 2026, the first house will no longer be counted in the value of the indicator, up to a maximum of 91,500 euros of cadastral value, with an increase of 2,500 euros for each child starting from the second.
The “Dedicated to you” card for the purchase of food goods (Isee under 15 thousand euros) and the new electronic value card for nineteen-year-olds who have completed their high school diploma, intended for cultural expenses, have been confirmed. Funds are also provided for family caregivers (207 million per year from 2027) and a 60 million Fund for the socio-educational activities of minors.
For the national health system, 2.4 billion will arrive in 2026 and 2.65 billion from 2027, largely intended for the reduction of waiting lists and the hiring of 6 thousand nurses and a thousand doctors. There is also a salary increase plan for the emergency rooms and a three-year hiring plan for the penitentiary police: 2,000 new officers by 2028.
Foreign residents and Scrooges: the flat tax rises
The subsidized regime for wealthy new residents, the so-called “CR7 norm”, changes face.
From 2026 the annual flat rate tax will go from 200 thousand to 300 thousand euros, and from 25 thousand to 50 thousand for family members. The objective is to increase revenue (27 million estimated in 2027) and limit the abuses of a regime that over the years has attracted many millionaires but generated controversy.
Plastic and Sugar Tax postponed, cinema cuts reduced
The launch of Plastic Tax and Sugar Tax, still in limbo, has been postponed for a year. Good news for the cinema sector: the cuts to the Cinema and Audiovisual Fund will be lower than expected, 150 million in 2026 instead of 190. On the industrial front, super depreciation returns for those who invest in machinery and technologies, with 4 billion in six years.
