What the maneuver will be will largely depend on the tug of war between Italy and the European Union. This was confirmed by the Minister of Economy Giancarlo Giorgetti, according to whom the definitive text of the 2027 Budget Law can only be outlined after the end of the European procedures relating to the safeguard clause and requests for flexibility on public finances.
The Government is also paying for the failure to exit the EU infringement procedure due to the deficit remaining above 3%. Today Italy exceeded the limit by just one decimal place (0.1%). In the meantime, however, the first guidelines are emerging regarding the measures considered by the Government.
Dry coupon at 5%
The Government aims to provide an initial response to the housing emergency with a 5% flat rate tax for long-term and agreed-upon rentals.
For long rentals, the ordinary flat rate tax rate is currently 21%. Which drops to 10% for contracts with an agreed fee in compliance with legal requirements. A possible reduced rate of 5% could represent a relief against the high cost of housing, especially in those municipalities where the housing emergency is particularly strong.
Please remember that the agreed rent is not only convenient for the tenant: the owners can benefit from discounts on Irpef and taxes.
Work for young people
Then there is the youth chapter: Giorgetti has announced for some time the idea of a 5% flat tax on salary increases for employees up to 35 years of age.
The measure is expected to cost around 350 million euros. But the minister also called for “the collaboration of employers”.
And then the flat tax on contract renewals, on night and weekend work and on productivity bonuses should be replicated.
But the “flat tax” universe also concerns another category: VAT numbers. Currently the threshold has been increased from 65,000 euros to 85,000 euros. Now the Government is aiming for 100,000 euros. But it is necessary to open a table with the EU, since to do so it would be necessary to also revise the VAT legislation. The League in particular is pushing hard on this point.
Irpef
Then there is the Irpef chapter, with a caress aimed at the middle class. The hypothesis is to extend the Irpef rate to 33% up to 60,000 euros gross per year. Now the limit is set at 50,000 euros. Such a measure would cost around 2.6 billion.
In the latest intervention, the Irpef rate fell from 35% to 33% on incomes between 28,000 euros and 50,000 euros.
Car tax
“Bollo ciao!”, sang Prime Minister Giorgia Meloni at the Fenix 2026 event. In the current year, the car tax was removed from all motorbikes and low-powered vehicles. However, this is a measure relating only to the year 2027, costing 2.3 billion from Pnrr funds.
Energy and defense
The budget deviation of 28.8 billion euros for energy and defense expenditure, provided for by the safeguard clause, was approved by the Council of Ministers on 2 October. There will be a new vote in Parliament on October 13th to give the go-ahead to the extra-trade deficit.
For energy, expenditure of 7.2 billion per year is expected for the two-year period 2027-2028. An identical amount is expected for defense and security.
