Work on the 2027 Budget, the last of the legislature, begins in the summer. And the Government is starting to reveal its cards, with Deputy Minister Maurizio Leo providing clear indications at the Masseria Forum on what awaits us, alternating significant openings with clear stops on some requests from the majority allies. The objective is to extend the Irpef cut and encourage youth empowerment.
The government’s proposal for rentals for young people
One of the hottest fronts is the housing one. For young people under 36 who are looking for a home, Leo has proposed halving the VAT on rent, bringing it from the current 10% to 5%. However, this is not a general cut for all rental contracts. The reduction would only apply in cases where the lessor is a construction company (direct rentals from the builder).
For the executive, this move would help support young people struggling with increasingly higher rents and incentivize the new construction market, preventing properties from remaining vacant. Leo stated that resources must be found, but that “it is a topic we are thinking about seriously”.
Irpef target of 33% for the middle class
After having already adjusted the brackets, the Government intends to revise the Irpef. The objective now is to increase the rate from 43% to 33% for incomes between 50 thousand and 60 thousand euros. In practice, today those who earn over 50 thousand euros see the excess income taxed at the highest rate. With the change, the 50-60 thousand bracket would be absorbed by the intermediate rate, alleviating the tax pressure on what Leo defines as “the famous middle class”.
The cost of the operation is 3 billion euros. A significant sum, but there is no lack of optimism: when asked how many chances there are of finding the resources from 1 to 10, he replies “I would say 7”.
No flat tax at 100 thousand euros
If on the one hand there are openings, on the other there is a freezing shower for Matteo Salvini and the League. The Northern League has been pushing for some time to raise the flat tax ceiling for VAT numbers and self-employed workers, bringing it from the current 85 thousand to 100 thousand euros. But Leo closed the door clearly:
I think it is difficult to reach up to 100 thousand euros because it means being able to apply it only for direct tax purposes and not for VAT purposes. The VAT mechanism, which is a European regulation, provides for a ceiling of 85 thousand euros. I understand the legitimate expectations of my colleagues in the League, but I think it is complicated.
The puzzle of resources and help in the fight against tax evasion
To finance the 3 billion Irpef cut and the reduced VAT, the Government aims to clean up the cauldron of fiscal subsidies. Leo talks about 600 measures including “deductions, deductions, tax credits, substitute taxes, concessions and various exemptions”, which can be cut. The idea is to rationalize the system, eliminating outdated measures or those that now affect a limited number of citizens.
But the figures can come from tax recovery. The executive is betting on prevention and traceability. Like the connection between POS and cash registers, which according to the numbers presented by Leo is working:
- 115 million more receipts issued in the first five months of 2026 compared to the same period the year before.
- 36.2 billion recovered from the fight against tax evasion in 2025 alone.
- 101 billion in total since the beginning of the legislature.
Encouraging numbers that strengthen public finances, but which do not automatically translate into available resources to finance the 3 billion needed to cut the personal income tax. The months of September and October will clarify whether the measures presented by Leo can be implemented or whether their implementation will prove more complex than expected.
