Leasing, the protagonist of this guide, is a formula increasingly chosen by Italians, who are shifting their focus from the purchasing perspective to the more flexible one, in fact, of choosing a house for rent.
In Italy, more slowly than in other European countries, this trend is however slowly taking hold and is convincing more and more potential landlords: life has changed, the geographical place in which to live is often forced or deliberately temporary, so why commit in a purchase when the solution of a rental house can sometimes be the best choice ?
During the reading, we will only briefly mention the reason for such a decisive change of course, but dwelling on this point precisely to make you fully understand which elements to take into consideration and finally how to renew or extend the rental contract (yes, they are two different things!).
You will therefore be able to understand which are the most important differences that you need to know well. Not only that, we have also thought of making it easier for you to prepare all the documentation necessary for the extension or renewal, directly providing you with downloadable templates for the renewal of the lease, according to your specific needs.
In fact, it often happens that after having been adequately helped by a licensed real estate agent in the research phase and formalization of the agreement for your new rental house, you can suddenly find yourself alone and inexperienced in dealing with the time of extension or renewal of the contract.
It is very important, however, to be adequately trained and informed on this purely technical-bureaucratic aspect, precisely because having to “do it alone” in most cases, it is essential not to risk having any future problems, which would be easily avoidable. The team at taj residencia is here to help and guide you.
Leasing: a growing trend
Let’s talk about trends ? But yes, the real estate world also has its trends and renting in this historical moment is undoubtedly one of them.
But what is changing?
What is happening is that in the first place the way of living certain spheres of one’s life is changing. Work, for example, leads more and more to the dynamism and geographical displacements. There are many causes, to date, that push more and more people to take an interest in renting rather than buying a home.
The old all-Italian dream of the “permanent job” at Checco Zalone has now vanished, the new generations are experiencing a digital transformation from all points of view, which is completely eradicating completely atavistic beliefs and lifestyles.
Digital nomads are increasingly numerous in Italy (as in Europe and in the world): those who know how to generate profits directly from a PC and therefore have no geographical obligations.
There are also more and more companies that provide smart working methods, so even as an “employee”, you can think of stabilizing yourself in a geographic location different from that of the company.
Here then, in this modern context, the house changes its appearance, and perhaps also intrinsic value for those who live it.
The location is for many to be the quickest and most convenient choice for ad hoc accommodation according to their housing needs. But then, after finally finding the right home, how do you make sure you resolve the issues related to the possible extension or renewal of the rental contract?
Contract renewal or extension: here are the differences to be aware of
Before moving on to the focus of this guide, which is the methods available for contract extension and renewal, let’s try to analyze together the difference in meaning that characterizes these two actions, precisely to help you outline which one to choose in your condition.
Apparently, they might seem like two terms that mean the same consequence, but this is absolutely not the case.
With the term renewal, as regards a rental contract, we mean the stipulation of a new agreement between the same subjects which, however, may contain new and different clauses and information with respect to the setting of the expiring contract.
With the concept of contractual extension, on the other hand, we refer to a temporal continuation of the same existing and expiring contract. It is therefore clear that by choosing the extension, it will not be possible to modify clauses, but simply to accept to continue the agreement under the same conditions for both parties.
But then one would wonder … what other differences and consequences are there for the landlord by choosing the renewal rather than the extension, and vice versa?
First of all, it certainly depends on personal and life needs. If something has changed, or it has been noticed in the course of the time that has elapsed relating to the existing contract, that some points did not properly meet your needs, you can opt for a solution that allows you to change the cards on the table, i.e. renewal.
Otherwise, instead, it will be sufficient to propose to the owner a simple extension of the existing contract.
Regarding taxes, at the expiry of the contract in force, regardless of whether it is an extension or renewal, it will be necessary to pay the tax required annually to the Revenue Agency, or for the entire duration of the ” new ”agreement.
Before moving on to the various types of possible contract renewals, let’s define together the last aspect relating to the contract extension.
We report below the relevant article of the law, quoting verbatim the Decree currently in force in Italy, which deals with regulating precisely the aspect relating to real estate contracts for leasing:
Article 17 of Presidential Decree no. 131/86, was modified by article 17 of Legislative Decree n. 158/15, providing that:
- Within the term of 30 days from the day on which the extension of the lease occurs, the communication relating to the extension must be submitted to the Revenue Office where the lease was registered.
- The failure to register payment of the tax due by F24 Elis for extensions even tacit of real estate leases, is sanctioned in accordance with Article 13 of Legislative Decree n. 471/97.
As foreseen by article 36, paragraph 3, of Presidential Decree no. 131/86, for contracts with tacit extension agreement, the tax is applied :
- ” In relation to the agreed duration, without prejudice to the obligation of the parties to report, pursuant to Article 19, the additional period of duration of the relationship and to pay the related tax according to the regulations in force at the time when the contract became binding for the new period “.
Types of lease agreements: to each their own renewal (and their own extension)
The lease expiration is approaching and you have no idea what the next step is? We have drawn up for you a sort of scheme within which for each type of lease we correspond the respective renewal.
In this way, it will be much easier, based on the type of contract you already have in place, to identify which will be the next step to take.
A few readings ago, we studied together precisely the topic relating to the various types of lease agreements currently available in Italy.
Now, the time has come to associate each of them with its possible contract renewal.
- Transitional lease contract : minimum contract duration 30 days, maximum extension 18 months. The renewal of the transitional contract must take place at the end of the 18 months and is only possible if the transitory requirement for which it was initially stipulated persists. This means that to renew the contract it is necessary to send a registered letter to the owner by the deadline, documenting that the transitional need is still in place .
- 4 + 4 lease contract : the automatic extension of this type of contract, as can be seen from its name, is 4 years after the initial four. As for its renewal, it takes place at the end of the second four-year period. Thanks to this renewal, it will therefore be possible to grant new contractual clauses. It is important to underline that if you wish to proceed with the renewal, you must send a registered letter at least 6 months before the expiry of the second four-year period. The landlord will be obliged to reply to the tenant within 60 days of receiving the registered letter. If the tenant does not receive an answer, the contract will be tacitly not renewed.
- Lease contract 3 + 2: also, in this case, the contractual extension takes place tacitly for a period of two years, at the end of the first three. As regards the renewal at the end of the five overall, it will be tacitly renewed to the same agreements for the same period of time; It is good to remember, however, that if you wish to take advantage of the dry coupon mode, you will have to submit the completed RLI form to the Revenue Agency, maintaining the timing of the 30 days mentioned above.
- Commercial lease agreement: as regards commercial properties, renewal takes place every six years, unless the owner receives a notice by registered mail, at least 12 months before the established deadline.
Admit it: now everything seems clearer to you! A topic like that of the renewal of the lease no longer seems so foreign to you as it did before starting this reading, and that was precisely our intent.
Therefore, after specifying which are the possible lease agreements to choose from depending on the specific need, let’s talk about taxes, going into even more detail on how to calculate them.
Rental contract and taxes: do not panic!
We have already anticipated in the incipit of this guide that the payment relating to the tax on the lease, at the time of renewal, or in that of extension, must be released to the Revenue Agency by choosing one of the two methods currently available:
- In annual formula
- For the entire duration of the new agreement
Are you sure, however, that you know how to calculate how much the cost is?
For example, if you had to opt for the first option, then it will be necessary to pay the amount within 30 days from the expiry of the annuity, on the current annuity.
Even at the time of the extension of the lease, it is possible to choose whether to pay the registration tax over the entire duration of the extension, or from year to year.
If, on the other hand, you choose to pay the sum relating to taxes in full, this will be the procedure to follow:
- A tax reduction is applied, equal to a percentage determined by multiplying half the legal interest rate referred to in Article 1284 of the Italian Civil Code by the number of annuities for the duration of the contract.
- The tax calculated by applying the above reduction must, in any case, be higher than the minimum tax of € 67.00
Renewal, extension and dry coupon
Last but not least, before making yourself truly autonomous in practice, it is precisely that relating to the much-needed dry coupon chat. It is good to clarify what role this contractual method plays and why so many choose it.
Let’s start by saying that in the context of real estate lease contracts, by definition, the term “dry coupon” means an optional regime, which consists in the payment of a substitute income tax and additional taxes (for the resulting part from the income of the property).
In addition, the registration tax and stamp duty, ordinarily due for registrations, terminations, and extensions of lease agreements, will not be paid for contracts under coupon dry. The dry coupon does not replace the registration tax for the transfer of the lease.
The choice for the dry coupon implies the waiver of the right to ask, for the entire duration of the option, to update the rent, even if it is provided for in the contract, including the variation ascertained by Istat in the national price index. to consumption for the families of workers and employees of the previous year.
So what happens at the time of a contract renewal, or an extension? It will happen that the contracts stipulated in this way will not be subject to the payment of taxes during the extension phase, as instead seen and described in the previous paragraphs of this guide.
In the event of an extension of the contract, it is necessary to confirm the option of the dry coupon at the same time as the communication of the extension. Confirmation of the option must be made within 30 days of the expiry of the contract or of a previous extension.
Now you are really prepared, take action!
We wanted to outline the topic as much as possible to make it smooth and pleasant, even at first reading, by those who knew very little about leases, taxes, and flat rate coupons.
If you have come this far, it is probably because the subject touches you personally, or presumably, it will touch you shortly, perhaps at the expiration of your lease.
So then, after reading our advice carefully, you just have to do the last thing: start getting familiar with the various models that we have attached to this guide.
So yes, you will really have all the material available to face the moment of renewing your rental contract.