IT | EN

black-and-white image depicting an Italian bed and breakfast or farmhouse holiday let

Setting up a farm holiday business or a bed and breakfast in Italy

Introduction

The idea of turning a country estate or a house into a small accommodation business is one of the most common entrepreneurial dreams amongst those who move to Italy. Small-scale tourism – characterised by a limited number of rooms, family-style hospitality and a direct connection to the local area – is, however, also one of the most regulated and sensitive sectors, as it involves a complex interplay of regulations relating to agriculture, tourism, public safety and taxation.

Furthermore, agriturismo and bed and breakfasts are often perceived as variations on the same concept. From a legal point of view, however, they are two profoundly different businesses, with requirements, obligations and eligible operator groups that do not overlap. This article offers a general overview to help navigate between the two models, particularly for those arriving from abroad who are interested in running this type of business.

The main difference between the two concepts lies in their underlying logic. Agritourism is, first and foremost, an agricultural activity with an additional hospitality component. A bed and breakfast, on the other hand, is established as a domestic hospitality business in its own right, with no necessary link to the land or to agricultural production. This distinction is not merely theoretical: it determines who can set up the business, what requirements are needed and even which tax regime applies.

Agritourism and Agricultural Activity

Definition

Agritourism is governed by National Framework Law No. 96 of 20 February 2006, which replaced the previous legislation of 1985. By law, only agricultural entrepreneurs within the meaning of Article 2135 of the Civil Code may carry out agritourism activities, using their own farm to offer accommodation in connection with the cultivation of the land, forestry or animal husbandry.

In practice, accommodation must remain a complementary activity to agricultural work, which must continue to form the core of the business. It is therefore not possible to ‘become an agritourism business’ without first actually being an agricultural holding.

Key requirements

Anyone wishing to open an agritourism business must, in addition to owning land, generally:

It should be noted that Law 96/2006 is a framework law: it lays down the general principles but leaves it to the Regions to establish specific criteria, limits and procedures, an aspect we shall return to later.

A point to bear in mind for non-Italian citizens

As agritourism requires the availability of agricultural land, those coming from a non-EU country must take an additional factor into account: the purchase of agricultural land in Italy by foreign nationals is subject to the so-called reciprocity condition (Article 16 of the preliminary provisions to the Civil Code). In short, the purchase is entirely unrestricted only if, in the buyer’s country of origin, an Italian citizen could do the same.

This condition does not apply to EU and EEA citizens, nor to those holding a residence permit for self-employment, employment or the running of a sole trader business, who are treated as equivalent to Italian citizens for these purposes. For non-EU citizens without such permits, however, this is an aspect that must be carefully checked before committing to the purchase of the land.

Bed & Breakfasts and hospitality businesses

Definition

A B&B is classified as a non-hotel accommodation facility governed, in terms of general principles, by the Tourism Code (Legislative Decree 79/2011), which, however, delegates operational regulations in this area to regional laws and municipal by-laws. It is a family-run business, operated from within the owner’s own home, offering accommodation and breakfast to guests.

Unlike a farm holiday, no agricultural qualifications or ownership of land are required: in principle, it is sufficient to have a few rooms in one’s own home and to comply with the requirements laid down by regional legislation.

Occasional or commercial operation

Regional laws generally distinguish between two types of operation:

The choice between the two models is not always a matter of free choice: it depends on the size limits (number of rooms, beds, opening periods) set by each region.

Why the rules vary from region to region

Tourism and agriculture are matters falling within the concurrent or residual competence of the regions pursuant to Article 117 of the Constitution. The State sets out the fundamental principles (i.e. what constitutes a farm holiday and what constitutes a B&B), but it is the individual Regions that determine the operational details: maximum number of rooms and beds, structural requirements, start-up procedures and any classification systems.

The result is that, for both farm holidays and B&Bs, there is no single set of rules applicable throughout the country. Different regions may set different thresholds to distinguish family-run businesses from commercial ones, require registration with specific regional registers, or stipulate administrative procedures that vary from one local authority to another. For this reason, before starting the business, it is essential to check the regional legislation and the local authority regulations of the area in which you intend to operate, as guidelines that apply in one region may not apply in another.

Common requirements

Beyond regional differences, farm stays and B&Bs share certain cross-cutting obligations, as set out in national legislation.

Both types of business require, subject to regional specifics, the submission of a SCIA to the relevant local authority, generally via the SUAP or the national ‘Impresa in un giorno’ portal.

Furthermore, from 2 November 2024, the National Identification Code (CIN), introduced by Decree-Law 145/2023, will be mandatory for all hotel and non-hotel accommodation establishments (including agritourism and B&Bs) and for properties intended for tourist or short-term lettings. The code is issued via the Ministry of Tourism’s Accommodation Establishments Database (BDSR); it must be displayed outside the premises and included in all advertising, whether online or otherwise. The penalty regime for failure to apply for the code will be fully operational from 1 January 2025.

Reporting guests to the Police Headquarters (Alloggiati Web)

Under Article 109 of the Consolidated Law on Public Security (Royal Decree 773/1931), anyone providing accommodation for a fee – including, therefore, the operator of a farmhouse or a B&B, regardless of whether the business is run on a commercial or occasional basis – must report the guests’ identification details to the relevant local Police Headquarters within 24 hours of arrival (or within 6 hours for stays of less than 24 hours). This notification must be made exclusively via the Alloggiati Web portal of the State Police, following a request for login credentials from the relevant Police Headquarters.

Tax Overview

The tax regime applicable varies significantly depending on the chosen business structure. Agritourism establishments, as activities linked to agriculture, benefit from special VAT rules (including a flat-rate deduction) and, under certain conditions, the income generated is considered agricultural income for the purposes of direct taxes. B&Bs run on an occasional basis, on the other hand, follow a simplified scheme, whilst those run on a commercial basis are subject to the standard rules applicable to business activities (flat-rate scheme or ordinary scheme, depending on the requirements). This is an aspect that warrants separate consideration, given its complexity and the speed with which tax rules can change.

When it was passed, Law 96/2006 actually sought to introduce certain uniform rules applicable throughout Italy, including a numerical threshold: agricultural activity was still considered the primary activity (and therefore accommodation fully legitimate as an agritourism business) when the number of guests did not exceed ten. However, the Lazio and Tuscany regions challenged the law before the Constitutional Court, arguing that the State had encroached upon a matter falling within regional competence. The Court ruled in their favour with Judgment No. 339 of 2007, striking down not only that threshold but also other detailed provisions of the law.

Since then, the national framework has remained deliberately sparse: the variety of regional rules encountered today is therefore not merely an administrative choice, but the direct result of that ruling.

The condition of reciprocity in the Italian Law https://antonellolawfirm.com/2024/05/24/the-condition-of-reciprocity-in-the-italian-law/

References