So, I've been renting out a studio apartment in Milan for about two years and I was wondering if I needed to declare this money to the tax authorities. I've never filed a specific tax return for it, and I think I've made a pretty big mistake. Can anyone tell me exactly what I need to do and whether I risk penalties?
Yes, you absolutely need to declare the money you're making from renting out your apartment. This isn't something to brush off - it's something you need to sort out as soon as possible. Cadastral income and rental payments are taxable income and have to be declared in your annual tax return (the 730 or Unico form, depending on your situation). If you have a registered contract, the tax authority already knows about it because the contract is filed with them - so hiding the income is really risky.
What you can do now is file an amended return for the years you didn't declare anything. It's better to do it yourself than wait for the tax authority to catch you, because if they discover it on their own you risk way steeper penalties (they start at 30% and can go up to 90% of the unpaid tax, plus interest). If everything else is in order, paying what you owe now is way less painful. You should go to a tax accountant or CAF because they know exactly how to handle this and what to declare - gross rent, deductible expenses, property depreciation if you own the place, all that stuff.
Get this done soon: amended returns get more complicated and expensive the longer you wait. Two years isn't a disaster yet, but don't put it off for more months.
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