FAQ: Top 10 Tenants/Landlords’ Questions Answered
We asked our Rentals Consultant Elisa to collect the ten most commonly asked questions about rentals, to shed light on the most important topics involved: typologies of contracts, taxes, registrations, deposit, agency fee etc.
At Lakeside we’re here to help making both tenants’ and landlords’ life easier, so… continue reading to find the answers to any queries you might have about our rental services!
#1 What does transitory contract mean?
The “transitory contract” is a residential one, that lasts up to 12 or 18 months, and expires at the end. It can be renewed after the first year. This contract differs from the "primary home" one in terms of duration: “primary home contract” is a residential one in which tenants move their fiscal residence in the property; the duration is, per law, 4 years. The only difference between the primary home contract and the transitory is that, in the latter, tenants can not move their own fiscal residence in the property. Transitory contracts are the perfect solution for people from other cities or from abroad, who come to Lake Como for tourism/holiday reasons or to work in the tourism field (receptionist in the hotel, waiters, etc.). They can rent apartments for one year, keeping their main residence in their own city. This contract is also a good solution for people who lives in Como city or in Milan: they often rent apartments for 1 year (cheaper than weekly rentals) to use them during holidays or weekends.
#2 How to close a contract?
The tenant, in case of serious reasons, is allowed to close at every moment the contract communicating by means of registered mail to the landlord, with advance notice of at least two months. In turn, the landlord is expressly authorized, by means of registered mail to the tenant, again with advance notice of at least two months, to end the contract in the event that the owner needs to use the apartment object of the contract. The tenant takes charge the obligation to leave the property within the time limit indicated in that registered mail.
#3 How to make the renewal, if expected?
The renewal is the extension of the duration of the contract for a further period that must be communicated to the Income Revenue Agency. As per the first registration, the tax due for the renewal can be paid for the first year or for the entire duration of the rental period. The extension/renewal can be made in one of the following ways:
through the telematic services of the IR Agency (RLI or RLI-web software)
presenting the duly completed paper RLI form to the office where the contract was registered.
#4 How do gas and electricity work in the temporary contract, compared to the “first home” contract?
The electricity bill for second homes has undergone a significant increase due to the increase in system charges in 2017. For domestic users in holiday homes, electricity prices are higher than those for buildings where the fiscal residence is owned. So for non-resident customers the electricity bill is higher than that of resident customers. For the supply of gas, on the other hand, there have been no changes: the fixed charges are also paid for gas, but they are definitely lower.
#5 How do rubbish and water utilities work for the Municipality?
Rubbish and water are paid directly to the Municipality in which the property is located.
Rubbish tax is paid, once a year, based on the squared meters of the property; it is a fixed amount every year.
Water is paid once a year and depends on consumption. The Municipality needs to have every year the meter reading of the previous year, in order for them to calculate the consumption.
#6 Are there any costs for registering the contract?
In case of Registration Tax Regime, the registration costs are 2% on the annual amount - multiplied per the years of the contract and € 16 stamps every 100 lines of the contract. In case of “Cedolare Secca” Regime, no registration costs (and no stamps) are due.
#7 What are “Cedolare Secca” and “Imposta di Registro”?
These are two tax regimes applicable to rentals. In case of registration tax there are registration fees of the contract equal to 2% of the annual fee, with a minimum of 67 euros in addition to the stamps. The flat rate tax (Cedolare Secca) is the tax rate on rent that allows landlords to pay a fixed tax of 21% on rental income. In case of Cedolare Secca, no costs are due for the registration of the contract.
#8 How much is the deposit and how does it work?
The deposit usually consists of two monthly fees. It may happen that the landlord asks for 3 months of deposit in case the house has been recently renovated or has valuable furniture inside. The deposit is usually fully returned after the closure of the contract, but it could take time in case of bills that haven’t been paid yet, or if, for example, some repairs have to be done in the apartment (the legal deadline is anyway 2 months). If there are no damages, no lost keys, and no unpaid charges, the deposit will be fully returned to the tenant without any issue.
#9 How much is the agency fee?
Our agency commission is 10% on the total annual fee, + VAT (22%). This percentage is aligned with the one set by the Chamber of Commerce in Como. The real estate agency handles all the meetings with clients, takes care of the drafting of the contract and its registration, and finally provides support and assistance to both landlord and tenant for all the following steps:
transfer of all the utilities
bringing the paperwork for water and rubbish to the Municipality
arranging heater’s inspections
#10 Are utilities costs included in the monthly rental fee?
No, never! In case of long-term rentals it’s very difficult to establish a monthly average including the utilities costs of electricity, gas, water and rubbish. The only expenses that you can find included in the monthly rental fee are the condominium fees, that are pretty much fixed every year. It’s not possible to establish the cost for gas or electricity, as this depends significantly on consumption; for this reason, in case of long-term contracts, the utilities are paid directly by tenants, transferring the gas and electricity contracts in their name.
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