Observatory › Tax and returns › Rent arrears after eviction for non-payment: how they are taxed

Rent arrears after eviction for non-payment: how they are taxed

Rent that is never received need not be taxed indefinitely. For residential property, an eviction summons for non-payment or an order for payment marks the dividing line; a tax credit is available for tax already paid on rent that is ultimately not collected.

For residential property, rent that is not received does not form part of taxable income, provided that non-receipt is evidenced by an eviction summons for non-payment (intimazione di sfratto per morosità) or by an order for payment (ingiunzione di pagamento). There is no need to wait for the court to confirm the eviction: the rule applies to rent not received on or after 1 January 2020, irrespective of when the lease was signed. This is a departure from the principle that income from land and buildings is taxed on an accruals basis, regardless of whether it is collected. Rent arrears collected in a later tax year are subject to separate taxation (tassazione separata).

The tax credit

Where tax has already been paid on rent that accrued but was subsequently never collected, a tax credit is available equal to the tax paid on the rent not received, to be claimed once non-receipt has been conclusively established in the court proceedings.

Mind the conditions

The relief requires documentary evidence of the arrears: in the absence of an eviction summons for non-payment or an order for payment, accrued rent remains taxable even if it has not been collected. A distinction must also be drawn between residential and non-residential lettings: the relief does not apply to non-residential lettings, which follow the general rule that accrued rent is taxable whether or not it is received. Orderly record-keeping is decisive to avoid paying tax on income never received.

• Art. 26(1) TUIR (Presidential Decree 917/1986), as currently in force; from 1 January 2027 the provision is carried over into Art. 28 of the new Consolidated Income Tax Act approved by Legislative Decree 117 of 19 June 2026. Art. 3-quinquies of Decree-Law 34/2019, converted into law by Law 58/2019; Art. 6-septies of Decree-Law 41/2021, converted into law by Law 69/2021.
• Article 3-quinquies(2) of Decree-Law no. 34 of 30 April 2019 and Article 6-septies(2) of Decree-Law no. 41 of 22 March 2021: commencement of the new rule and tax credit for earlier leases.