Assolombarda proposes tax deductibility of rents paid by companies to employees

On October 12, during the general assembly in Milan, Assolombarda presented a proposal to make rental payments made by companies on behalf of employees fully deductible, combined with favorable tax treatment for those receiving the benefit.

The measure stems from an attempt to link two problems that Lombard companies have long flagged: the rising cost of rent in areas with greater job appeal, and the difficulty of retaining or attracting staff in those areas. The proposed mechanism would work as a tax lever: the company that pays or contributes to an employee’s rent would obtain full deduction of the cost, while the worker would benefit from a more favorable tax regime on the portion received.

According to estimates released by Assolombarda, the measure’s potential pool exceeds 280,000 workers in Italy. The association has quantified the full cost to public finances at 551 million euros a year, a figure that becomes the first test the government will have to address should it decide to take up the request.

The proposal is part of a broader package of requests that companies have brought to the executive on housing, energy and incentives, according to what was reported at the association’s general assembly. It is not yet clear whether the government intends to adopt the measure, nor into which eventual legislative provision it might be incorporated: at present it remains a proposal put forward by an employers’ association, not a measure under study by any ministry.

The economic-political point is distinguishing between two levels that the proposal holds together: on one hand an incentive for companies (the deductibility of the cost), on the other a direct benefit for workers (the favorable tax treatment on the sum received). It is a structure that, if adopted, would shift part of the cost of housing from the worker’s net salary to the State’s fiscal balance, passing through the lever of the company. The figure of 551 million is the one indicated by Assolombarda itself, the association proposing the measure.

It remains to be seen whether the proposal will find space in the upcoming budget law or in a measure dedicated to the housing issue, a dossier on which distinct requests have accumulated in recent months from trade associations, local authorities and social partners.