Authored by the expert who managed and guided the team behind the Italy Property Pack
Everything you need to know before buying real estate is included in our Italy Property Pack
Americans can legally purchase property in Italy without EU citizenship, benefiting from equal ownership rights under the US-Italy reciprocity treaty. However, buying property doesn't grant residency rights, requiring separate visa applications for long-term stays exceeding 90 days.
As we reach mid-2025, the Italian property market offers diverse opportunities for American buyers, from high-yield southern cities like Palermo (8.29% rental yield) to appreciation hotspots like Florence (+6.1% year-over-year growth). The process involves obtaining a Codice Fiscale, navigating mandatory notary requirements, and understanding Italy's tax structure for foreign property owners.
If you want to go deeper, you can check our pack of documents related to the real estate market in Italy, based on reliable facts and data, not opinions or rumors.
Americans enjoy full property ownership rights in Italy but must obtain a Codice Fiscale and work with a notary for the final deed.
Purchase taxes range from 2-9% depending on property type, with ongoing annual municipal taxes (IMU) at 0.4-0.8% of property value.
| Aspect | Requirements for Americans | Key Details |
|---|---|---|
| Property Purchase Rights | No restrictions | Equal rights to Italian citizens under reciprocity treaty |
| Residency for Purchase | Not required | Separate visa needed for stays >90 days |
| Down Payment (Mortgage) | 40-50% typically | Stricter terms than for EU residents |
| Purchase Tax | 2-9% of value | Varies by property type and use |
| Annual Property Tax | 0.4-0.8% IMU | Municipal tax on property value |
| Rental Income Tax | 23-43% | Subject to Italian income tax rates |
| Capital Gains Tax | 22% if sold <5 years | Exempt after 5 years of ownership |
Can Americans legally buy property in Italy without having EU citizenship?
Yes, Americans can legally purchase property in Italy without EU citizenship or any residency requirements.
The US-Italy reciprocity treaty grants Americans the same property ownership rights as Italian citizens. This means you face no restrictions on the type, size, or location of property you can purchase throughout Italy.
You don't need to establish Italian residency, obtain any special permits, or demonstrate ties to Italy before buying property. The legal framework treats American buyers identically to Italian nationals in terms of property ownership rights.
However, purchasing property doesn't automatically grant you residency rights or the ability to stay in Italy beyond the standard 90-day tourist limit. Property ownership and residency status remain completely separate legal matters under Italian law.
It's something we develop in our Italy property pack.
Do Americans need a visa or residency permit to buy a house in Italy or to stay long-term?
Americans don't need any visa or permit to purchase property in Italy, but long-term stays require separate residency applications.
For the property purchase itself, you only need a valid US passport. The buying process can be completed during tourist visits or even handled remotely through Power of Attorney arrangements.
If you want to stay in Italy longer than 90 days within any 180-day period, you must apply for appropriate residency permits. The most common options for American property owners include the Elective Residency Visa for retirees with passive income (requiring proof of €31,000+ annual income) or the Investment Visa requiring €500,000+ in Italian government bonds or businesses.
Standard Schengen area rules apply for short-term stays, allowing 90 days of tourist visits within any 180-day period. Property ownership doesn't extend these limits or provide any immigration benefits.
Many Americans purchase Italian property as vacation homes while maintaining US residency, visiting within the 90-day tourist allowance without needing any special permits.
What are the step-by-step procedures for an American to buy a home in Italy, and which documents are required?
The Italian property purchase process follows six mandatory steps, each with specific documentation requirements.
| Step | Action Required | Documents Needed |
|---|---|---|
| 1. Codice Fiscale | Obtain Italian tax identification number | Valid US passport, completed application form |
| 2. Bank Account | Open Italian bank account for transactions | Codice Fiscale, passport, proof of address |
| 3. Property Search | Find property and make formal offer | Pre-approval letter (if financing), financial documentation |
| 4. Preliminary Contract | Sign Compromesso with 10-30% deposit | Property details, deposit payment, identification |
| 5. Due Diligence | Legal verification and property inspection | Title search results, habitability certificate, survey |
| 6. Final Deed | Complete Rogito Notarile with notary | Remaining balance, all previous documents, notary presence |
The Codice Fiscale serves as your Italian tax ID and is required for all property transactions. You can obtain it at Italian consulates in the US or at local Agenzia delle Entrate offices in Italy.
Opening an Italian bank account simplifies the transaction process and demonstrates financial capability to sellers. Most banks require the Codice Fiscale and proof of income or assets.
The preliminary contract (Compromesso) legally binds both parties and typically requires a 10-30% deposit. This stage includes agreed-upon completion dates and any special conditions.
Due diligence involves verifying clear title, checking for liens or debts, and ensuring the property has proper habitability certificates and building permits.
Is it mandatory for Americans to hire a local lawyer or notary during the buying process?
A notary is mandatory for the final deed, while hiring a lawyer is optional but highly recommended for Americans.
Italian law requires a notary (notaio) to oversee the final property transfer deed (Rogito Notarile). The notary verifies the legality of the transaction, ensures clear title transfer, and registers the deed with local authorities. This is a non-negotiable legal requirement.
Hiring a separate lawyer isn't legally required but provides crucial protection for American buyers. Italian real estate contracts are written in Italian, and the notary represents the state's interests rather than acting as your advocate.
A lawyer can review contracts before signing, explain complex terms, negotiate on your behalf, and ensure your interests are protected throughout the process. This is particularly valuable for Americans unfamiliar with Italian property law and language barriers.
Legal fees typically range from €1,500 to €3,000 depending on the property value and complexity. Notary fees are usually 1-3% of the property value and are paid at closing.
Many Americans find the lawyer's assistance invaluable for understanding tax implications, residency requirements, and ongoing obligations as foreign property owners in Italy.
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Can Americans get a mortgage from an Italian bank, and what are the typical rates and conditions?
Yes, Americans can obtain mortgages from Italian banks, but with stricter conditions than EU residents face.
Italian banks typically require American borrowers to make 40-50% down payments, significantly higher than the 10-20% often required for Italian citizens. This higher requirement reflects the perceived risk of lending to non-resident foreign nationals.
As of June 2025, mortgage rates range from 3-5% for fixed-rate loans, with variable rates slightly lower but subject to market fluctuations. Loan terms typically extend 15-25 years for foreign borrowers, shorter than the 30-year terms available to Italian residents.
Banks require extensive documentation including your Codice Fiscale, Italian bank account, proof of US income (translated and apostilled), tax returns for the past 2-3 years, and demonstration of stable employment. Some banks also require proof of existing assets or savings.
Major Italian banks like UniCredit, Intesa Sanpaolo, and Banco BPM offer foreign mortgages, though each has different criteria and requirements. The approval process typically takes 6-8 weeks and requires in-person meetings or properly executed Power of Attorney arrangements.
Monthly payments cannot exceed 30-35% of your proven net income, and banks often require mortgage insurance for the loan duration.
Do Americans need to be physically present in Italy to complete the purchase or can it be done remotely?
Americans can complete Italian property purchases remotely using Power of Attorney, though physical presence simplifies the process.
The Power of Attorney (procura) must be executed at an Italian consulate in the US or notarized by a US notary and then apostilled. This document authorizes a representative in Italy to sign documents and complete transactions on your behalf.
Remote purchases work well for straightforward transactions but become complex when issues arise requiring immediate decisions or document clarifications. Many Americans choose to be present for the preliminary contract signing and final deed to ensure full understanding of all terms.
If using Power of Attorney, your representative (often your Italian lawyer) can attend viewings, negotiate terms, sign contracts, and complete the final deed. You'll still need to provide all required documents and arrange financing from the US.
Physical presence is particularly valuable during the due diligence phase, allowing you to inspect the property personally and understand any local factors affecting the purchase decision.
Some Americans use a hybrid approach: visiting Italy to view properties and sign preliminary contracts, then completing the final deed remotely if no complications arise. This balances convenience with personal oversight of the major decision points.
What are the taxes and ongoing fiscal obligations for Americans owning property in Italy, including rental income?
American property owners in Italy face multiple tax obligations both in Italy and potentially in the US.
Purchase taxes vary by property type and intended use. Primary residences qualify for reduced rates (2-3% registration tax), while second homes and investment properties face higher rates (9% registration tax plus additional fees). These taxes are paid at the time of purchase.
Annual property taxes include the IMU (municipal property tax) ranging from 0.4-0.8% of the property's cadastral value, calculated annually. The exact rate depends on the municipality and property type. Primary residences often qualify for exemptions or reduced rates.
If you rent the property, rental income is subject to Italian income tax at rates of 23-43% depending on your total Italian income. You can choose between the standard progressive tax regime or a flat 21% cedolare secca tax specifically for rental income.
Capital gains taxes apply at 22% if you sell the property within five years of purchase. Properties held longer than five years are exempt from capital gains tax, making Italy attractive for long-term investments.
As a US citizen, you must also report the Italian property on US tax returns (Form 8938 if value exceeds $200,000) and may need to file FBAR forms for Italian bank accounts. The US-Italy tax treaty helps prevent double taxation on most income types.
It's something we develop in our Italy property pack.
What are the average property prices per square meter in key Italian cities and regions, like Rome, Milan, Tuscany, Puglia, and Sicily?
Italian property prices vary dramatically by location, with northern cities commanding premium prices while southern regions offer more affordable options.
| City/Region | Average Price per sqm (€) | Rental Yield (%) |
|---|---|---|
| Milan | 4,986 | 5.44 |
| Rome | 3,124 | 7.55 |
| Florence (Tuscany) | 4,331 | 7.35 |
| Naples | 2,712 | 7.41 |
| Palermo (Sicily) | 1,341 | 8.29 |
| Bari (Puglia) | 1,850 | 7.8 |
| Catania (Sicily) | 1,200 | 8.55 |
Milan represents Italy's most expensive property market, driven by its status as the economic capital and fashion hub. Prime central areas can exceed €8,000 per square meter, while outer districts average €3,000-4,000.
Rome prices vary significantly by neighborhood, with historic center properties reaching €6,000+ per square meter while suburban areas average €2,000-2,500. The market shows steady 3.4% year-over-year appreciation as of 2025.
Tuscany beyond Florence offers diverse pricing, with rural properties starting around €1,500-2,500 per square meter, while prestigious areas like Chianti and coastal regions command €3,000-5,000 per square meter.
Southern regions like Puglia and Sicily present excellent value, with coastal properties in desirable areas like Lecce or Taormina averaging €2,000-3,000 per square meter. Rural properties and renovation projects can be found for under €1,000 per square meter.
These prices reflect current market conditions as of June 2025, with northern cities showing stability while southern markets demonstrate strong growth potential.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Italy versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Where do Americans typically choose to settle in Italy and why—lifestyle, language, expat communities, healthcare access?
Americans gravitate toward four main regions in Italy, each offering distinct lifestyle advantages and expat communities.
Rome attracts Americans seeking cultural immersion and international career opportunities. The city hosts numerous multinational organizations, English-language schools, and established expat networks. Healthcare access through both public and private systems is excellent, and the international atmosphere makes language barriers more manageable for newcomers.
Milan appeals to Americans in finance, fashion, and business sectors. The city offers the highest salaries in Italy, LGBTQ+-friendly districts, and extensive English-speaking professional networks. The efficient public transportation and proximity to other European business centers make it ideal for career-focused Americans.
Florence and broader Tuscany attract Americans interested in art, culture, and the classic Italian lifestyle. The region has well-established expat communities, particularly around Florence and Lucca, with numerous American-run businesses and English-language services. The landscape and slower pace appeal to retirees and remote workers.
Southern Italy, particularly Puglia and Sicily, increasingly attracts Americans seeking affordable coastal living and authentic Italian culture. These areas offer lower living costs, stunning beaches, and growing expat communities, though with fewer English-speaking services and more language immersion requirements.
Healthcare access varies by region, with northern cities offering more private options and English-speaking doctors, while southern areas rely more heavily on the public system with fewer English-language services.
Which areas in Italy are best right now in terms of rental yield, capital appreciation, tourism demand, and growth forecasts?
As of mid-2025, southern Italian cities lead in rental yields while northern markets show stronger capital appreciation potential.
For rental yields, Sicily dominates with Catania offering 8.55% and Palermo 8.29% average yields. These cities benefit from growing tourism, university students, and increasing remote worker interest. Puglia cities like Bari and Lecce also deliver strong yields around 7.8-8% due to tourism growth and affordable property prices.
Capital appreciation leaders include Florence with +6.1% year-over-year growth, driven by international buyer demand and limited historic center inventory. Rome follows with +3.4% annual appreciation, supported by steady tourism recovery and infrastructure investments.
Tourism demand hotspots include coastal Puglia (particularly Monopoli and Polignano a Mare), Sicilian baroque towns like Noto and Ragusa, and emerging Calabrian destinations. These areas benefit from Italy's growing domestic tourism and international visitors seeking alternatives to overcrowded Tuscany and Amalfi Coast.
Growth forecasts favor markets with infrastructure development, including cities along new high-speed rail lines, areas near expanding airports, and regions benefiting from EU recovery funds. Southern Italy receives significant EU investment for tourism infrastructure and economic development.
Bologna and secondary Emilian cities offer balanced opportunities with moderate yields (6-7%) and steady appreciation potential, benefiting from proximity to Milan and growing tech sectors.
It's something we develop in our Italy property pack.
What are the most common pitfalls or mistakes Americans make when buying real estate in Italy?
Americans frequently underestimate renovation costs and fall into language-related traps during Italian property purchases.
The most expensive mistake involves underestimating renovation costs for older Italian properties. Americans often budget €500-800 per square meter for renovations but face actual costs of €1,200-2,000 per square meter due to Italy's high labor costs, strict building codes, and requirements for specialized artisans for historic properties. This can double the total investment unexpectedly.
Under-declaration schemes represent a serious legal pitfall. Some sellers or agents suggest falsely declaring a lower purchase price to reduce taxes, but this creates legal liability for Americans and complicates future sales, insurance claims, and inheritance issues. Italian authorities actively investigate these schemes and impose severe penalties.
Language barriers cause contract misunderstandings, with Americans signing documents they don't fully comprehend. Italian real estate contracts contain complex legal terminology, and literal translations often miss crucial nuances about payment schedules, completion dates, and buyer obligations.
Climate and environmental risks are often overlooked, particularly for coastal properties. Many Americans don't research flood risks, earthquake zones, or erosion issues that could affect property values and insurance costs. Southern Italy faces increasing wildfire risks that impact rural properties.
Americans also frequently misjudge ongoing costs including utility connections, waste management fees, building maintenance requirements, and mandatory insurance policies. These can add €2,000-5,000 annually to ownership costs beyond basic property taxes.
Are there any restrictions or extra costs that apply only to Americans compared to Italian citizens or EU buyers?
Americans face no additional purchase restrictions or taxes compared to Italian citizens, but encounter stricter mortgage conditions and different tax reporting requirements.
Property ownership rights are identical under the US-Italy reciprocity treaty. Americans pay the same purchase taxes (2-9% depending on property type), annual property taxes (IMU at 0.4-0.8%), and face identical legal requirements for the purchase process.
Mortgage conditions differ significantly, with American borrowers typically requiring 40-50% down payments versus 10-20% for Italian citizens. Interest rates may be 0.5-1% higher for non-resident foreign nationals, and loan terms are often shorter (15-25 years versus 30 years for Italians).
Banking relationships prove more complex for Americans, with some Italian banks requiring higher minimum balances, additional documentation, and in-person account management. Opening accounts without Italian residency can take longer and require more paperwork.
Tax reporting obligations extend beyond Italy for Americans. While Italians only report to Italian authorities, Americans must file additional US forms (8938, FBAR) and navigate potential double taxation issues, requiring specialized tax advice.
Residency limitations affect Americans more significantly. While EU citizens can live indefinitely in Italy, Americans face 90-day tourist limits and must obtain separate visas for long-term stays, regardless of property ownership.
These differences primarily affect financing and residency rather than fundamental ownership rights or purchase costs.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Americans can successfully purchase Italian property by understanding the legal requirements, following proper procedures, and avoiding common pitfalls.
The key to success lies in thorough preparation, including obtaining proper documentation, understanding tax obligations, and working with qualified local professionals throughout the process.
Sources
- Taxes for Expats - Buying Property in Italy as Americans
- Exiap - Buy Property in Italy Guide
- Lexidy - How to Buy Property in Italy as an American
- DeTullio Law Firm - Buying Property in Italy as US Citizen
- My Lawyer in Italy - Real Estate for Americans
- Idealista - Legal Requirements for Foreigners
- Gate Away - Purchase Process
- InvestRopa - Italy Real Estate for Foreigners
- Property Guides - The Notary and Your Italian House Purchase
- Wise - Getting a Mortgage in Italy