Italian government approves €26 billion budget package — ANSA English

In Rome, the Italian government approved a budget package for 2027 worth approximately €26 billion. Prime Minister Giorgia Meloni said this after a Cabinet meeting, ANSA English reports.

Vehicle tax exemption

According to Meloni, the budget provides for a permanent exemption from the vehicle tax for low- and medium-power cars—up to 80 kilowatts—as well as for motorcycles. She estimated that this decision would affect approximately 70% of vehicles currently in use in Italy.

The prime minister stressed that the exemption would no longer be limited to 2027 alone. She also said that opponents were wrong to call the decision an election-related concession.

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Changes to income tax

The package also provides for raising the threshold for the second IRPEF personal income tax rate to €55,000 per year. This rate is 33%. According to Meloni, the maximum annual benefit from this tax cut will amount to €500.

She added that due to previous decisions regarding IRPEF, the state has forgone approximately €21 billion in revenue.

Schools and rental housing

The government plans to direct part of the funds related to energy flexibility toward installing air conditioners and heat pumps in schools. The budget also includes a reduction of the flat tax rate for regulated-rent lease agreements to 5%. For owners who rent housing to people under the age of 35, the rate will be 1%.