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Italy, with its breathtaking scenery, captivating history, and hospitable locals, draws in many foreigners looking for real estate investment opportunities.
Actually, in Italy, according to the Italian National Institute of Statistics, the rate of homeownership is relatively high, with over 70% of people owning their homes. This statistic is attributed to several factors, including cultural traditions and government policies that promote property ownership.
Nevertheless, navigating the complexities of buying property in a foreign country can be difficult, especially when it comes to the legal framework and regulations involved.
That's why this guide is here to help! We'll explain how the property market works in Italy in an uncomplicated and easy-to-grasp way, covering all the information you need.
Can you purchase and own a property in Italy as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Italy for US citizens.
Absolutely! Foreign nationals are indeed permitted to buy property in Italy.
In fact, Italy is considered foreigner-friendly and has attracted approximately 5.2 million foreign property owners. This openness to foreign investment and ownership has contributed to the country's appeal and popularity among international buyers.
Also, yes, foreigners in Italy are allowed to purchase various types of properties, including houses, commercial and residential properties, as well as land plots. They are also authorised to rent it out and sell it later.
If almost everyone can buy a property in Italy, it is not the same process for everyone. We will make it clear for you.
Also note that, in order to complete the purchase, it is necessary to obtain an Italian Tax Number. This is the case for everyone.
If you reside in Italy
Foreigners living in Italy can buy property, regardless of how long they have resided in the country.
To be eligible, your residence permit must be for one of these reasons:
- employment or self-employment
- owning a business
- family-related reasons
- studying
Of course, your family members must also have a residence permit.
However, if you are a refugee or a stateless individual, you must have lived at least 3 years in Italy.
If you don't reside in Italy
You are a EU citizen
If you are a citizen of a European Union (EU) country or a European Economic Area (EEA) country (basically Iceland, Liechtenstein or Norway), you are allowed to buy property in Italy without any special restrictions.
The process for buying a home in Italy is the same as it is for Italian citizens.
You are not a EU citizen
For foreigners who are not EU or EEA citizens, they can buy a property in Italy if there is an international treaty that allows Italian citizens to buy property in the foreigner's home country.
This means there needs to be a reciprocal agreement between the two countries.
For example, American citizens are allowed to buy a property in Italy because there is an agreement between the two countries. It's also the case for UK nationals.
You can check if such a treaty exists on the website of the Ministry of Foreign Affairs. Additionally, Italian embassies or consulates in your country of residence may also be able to assist you by providing information on the specific treaty provisions between Italy and your home country regarding property ownership.
This rule is very clear and strict. Actually, Italian notaries are prohibited from creating any types of contracts for purchasing property when the parties involved are citizens of countries that do not have a reciprocal agreement in place.
Can you get a residence permit by purchasing and owning a property?
Foreigners who wish to reside in Italy are required to obtain a residence permit (permesso di soggiorno), which grants them the right to live in the country.
For immigrants, one important consideration is whether purchasing property can facilitate the process of obtaining a residence permit in Italy.
Unfortunately, currently, owning property alone does not fulfill the requirements for obtaining a residence permit in Italy.
To obtain an Italian residence permit, you may explore various visa options, choose the most suitable one for your situation, and then apply for permanent residency using the standard procedures.
Should you buy or rent a property in Italy?
Renting a property in Italy is recommended if you prefer flexibility, have a limited budget, or are uncertain about long-term plans, while buying is more suitable for those seeking stability, customization, potential rental income, and long-term investment.
Why it may be better to rent
It's better to rent a property in Italy if:
- You are unsure about your long-term plans or the area you want to settle in.
- You prefer to avoid the costs and responsibilities of property maintenance.
- You have a limited budget and want to avoid high upfront costs.
- You enjoy the flexibility to move around different regions or cities within Italy.
- You want to avoid potential fluctuations in property values.
- You want to avoid the complexities of the Italian real estate market.
- You prefer to invest your money in other opportunities or assets.
- You want to avoid the legal and bureaucratic processes involved in buying a property.
- You are uncertain about the stability of your personal or professional circumstances.
- You want to test living in Italy before committing to a long-term investment.
Why it may be better to buy
However, it's definitely better to buy a property in Italy if:
- You plan to establish a permanent residence in Italy.
- You have a stable financial situation and can make a substantial investment.
- You want to customize and personalize your living space according to your preferences.
- You want to take advantage of potential appreciation in Italy's real estate market.
- You are looking for a potential source of rental income.
- You value stability and want to avoid rising rental costs.
- You want to secure a fixed housing cost over time.
- You want to build equity and have a tangible asset in Italy.
- You have a deep attachment to a specific area or community in Italy.
- You want to take advantage of Italy's favorable mortgage interest rates.
Financial considerations
If you're unsure whether to buy or rent a property in Italy, understanding rental yields can help.
Rental yield is the percentage of income you can expect to earn from renting out a property compared to its total cost. In Italy, the rental yields typically range from 2.5% to 5.5%.
Then, it depends on you.
If you can find a way to generate a return on your capital that exceeds 5.5%, such as trading stocks or buying government bonds, it would be more advantageous to pay rent and utilize your capital for these purposes.
However, if you are unable to achieve such returns, it would be better to use your capital to purchase a house in Italy and eliminate the need for paying rent.
Buying a property in Italy can be risky
An increasing number of foreign investors are showing interest in Italy. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
How is the property market in Italy?
Market data
First and foremost, Italy is considered a stable country, which attracts sustainable development and investor confidence.
Based on the the the GDP per capita indicator, it is apparent that Italian people have become 28.9% richer throughout the past 5 years.
When people have more money, they tend to buy more real estate, and that can make prices increase in the future.
Looking at the data reported by Numbeo, we can see that rental properties in Italy offer gross rental yields between 2.6% and 5.3%.
These moderate rental yields indicate a balanced return on investment for property owners or investors
Also, the Italian housing market has shown signs of stagnation, with limited market activity and modest increases in property values. Then, it could be a good time to buy a property (prices are stable, there is not too much movement).
Finally, Italy is projected to experience moderate inflation, with an average yearly increase of 2.5% over the next five years. Housing prices are likely to increase then.
To know more, you can also read our dedicated article: is it a good time to buy a property in Italy?
How much does it cost to buy property in Italy?
As a general range, property prices in popular cities like Rome, Milan, and Florence can start from around €200,000 for apartments, while luxury properties or waterfront properties in Venice can range from €400,000 to €800,000 and above.
To provide you with a clearer understanding of the situation, here is a more detailed table:
| City | Budget (EUR) | What you will get |
|---|---|---|
| Rome | €200,000 - €400,000 | Apartments in historic buildings near the city center |
| Milan | €350,000 - €700,000 | Modern luxury condos with city skyline views |
| Florence | €250,000 - €500,000 | Renovated historic townhouses with Tuscan charm |
| Venice | €400,000 - €800,000 | Waterfront apartments with canal views |
| Naples | €120,000 - €300,000 | Spacious apartments with a balcony overlooking the sea |
| Turin | €150,000 - €350,000 | Cozy apartments in charming neighborhoods |
| Bologna | €250,000 - €500,000 | Elegant apartments in the historic city center |
| Verona | €200,000 - €400,000 | Quaint houses with beautiful views of the Adige River |
| Genoa | €180,000 - €400,000 | Apartments with balconies offering stunning sea vistas |
| Palermo | €100,000 - €250,000 | Bright apartments in vibrant neighborhoods |
The life as an expat
As an expat in Italy, life can be a delightful and enriching experience.
Italy is known for its rich culture, history, and stunning landscapes, making it an attractive destination for many people.
Here's a perspective on various aspects of expat life in Italy.
Integration with locals
Italians are generally warm, friendly, and welcoming to expats.
However, integration largely depends on your efforts to learn the Italian language and embrace the local customs and traditions.
According to recent estimates, slightly more than one-third of Italians can speak English. Also, within this group, a significant portion can only communicate in very basic English.
Then, speaking Italian will greatly enhance your interactions and enable you to form deeper connections with locals.
Education
Italy offers a diverse range of educational opportunities for expat families.
The country has excellent international schools in major cities like Rome, Milan, and Florence, providing high-quality education following various curricula.
For example, Bocconi University in Milan consistently achieves high rankings among universities worldwide.
Public schools are an option as well, but proficiency in Italian is usually required for enrollment.
Safety
Italy is generally considered a safe country to visit or live in.
While petty theft and pickpocketing can occur, especially in crowded tourist areas or on public transportation, exercising common sense precautions such as keeping belongings secure and being aware of your surroundings can minimize these risks.
Violent crimes are relatively rare, and the overall crime rate is moderate. It's advisable to follow local laws, respect cultural customs, and stay updated on travel advisories, particularly in larger cities where some areas may have higher crime rates.
Healthcare
Italy has a well-developed healthcare system that provides universal coverage to its residents, including expats.
The system comprises both public and private healthcare facilities.
Public healthcare is generally of good quality but can be bureaucratic and experience longer waiting times. Private healthcare is also available, offering quicker access and a wider range of services.
Also, it's advisable to have comprehensive health insurance to cover any medical expenses.
Cost of living
The cost of living in Italy varies depending on the region.
Major cities like Rome and Milan tend to be more expensive, while smaller towns and rural areas can offer a more affordable lifestyle.
Housing, transportation, and dining out can be significant expenses, but Italy also provides numerous opportunities to enjoy affordable cultural activities and local cuisine.
Here is some data to help you get a better understanding:
- A weekly grocery bill for a family of four can average around €150.
- Monthly public transportation passes in major cities can cost approximately €35-50.
- A meal for two at a mid-range restaurant can cost around €50-70.
- Monthly expenses for electricity, water, and heating can add up to €150-200.
- Basic health insurance for an individual can cost around €150-200 per month.
- Annual tuition fees for a public university program can range from €1,000 to €4,000.
- Going to the cinema can cost around €8-10 per ticket, while a concert ticket can vary from €30-100.
Cultural experience
Living in Italy provides an unparalleled cultural experience.
You'll have the chance to immerse yourself in the vibrant arts scene, historical sites, and culinary delights.
You probably know it already but Italians have a deep appreciation for their heritage and enjoy sharing it with others, making it easier for expats to participate in local festivals, events, and traditions.
What are the best places to buy a property in Italy?
It really depends on you!
If you're looking for a historic and picturesque location, consider buying a property in the charming city of Florence, known for its Renaissance art and cultural richness.
If you're seeking a coastal retreat, explore the options in the stunning Amalfi Coast, where beautiful cliffs, azure waters, and Mediterranean lifestyle await.
If you desire a tranquil countryside escape, Tuscany offers idyllic landscapes, vineyards, and quaint villages that make it an appealing choice for property investment.
If you're interested in a bustling urban environment, consider buying property in Rome, Italy's vibrant capital, where ancient landmarks and modern amenities converge.
If you're a fan of beautiful lakeside settings, explore the property market around Lake Como, offering breathtaking views and upscale living in northern Italy.
Also, this table summarizes some of the best places to buy a property in Italy.
| City / Region | Population | Average Price per sqm (EUR) | Strengths |
|---|---|---|---|
| Rome | ≈ 2.8 million | 4,000 - 8,000 | Capital city, historical landmarks, cultural treasures, vibrant atmosphere |
| Milan | ≈ 1.4 million | 5,000 - 10,000 | Financial and fashion capital, thriving business hub, cultural scene |
| Florence | ≈ 380,000 | 4,000 - 8,000 | Artistic and architectural masterpiece, UNESCO World Heritage Site |
| Venice | ≈ 260,000 | 5,000 - 10,000 | Canal city, romantic atmosphere, historic landmarks, cultural events |
| Naples | ≈ 950,000 | 2,000 - 4,000 | Historical city, culinary delights, vibrant street life, nearby Pompeii |
| Verona | ≈ 260,000 | 3,000 - 6,000 | Shakespeare's setting for Romeo and Juliet, Roman amphitheater |
| Bologna | ≈ 400,000 | 3,000 - 6,000 | University town, rich gastronomy, cultural heritage, vibrant markets |
Want to explore this further?
- Is it worth it buying property in Rome?
- Is it worth it buying property in Milan?
- Is it worth it buying property in Florence?
- Is it worth it buying property in Turin?
- Is it worth it buying property in Lucca?
- Is it worth it buying property in Sicily?
- Is it worth it buying property in Tuscany?
- Is it worth it buying property in Sardinia?
- Is it worth it buying property in Lake Como?
- Is it worth it buying property in Lombardy?
Do you need a lawyer to buy a property in Italy?
When purchasing a property in Italy, a local lawyer can play a crucial role in guiding you through the legal aspects and ensuring a smooth process.
One important document they can assist with is the "Contratto di Vendita," which is the official deed of sale between the buyer and seller, typically signed before a notary public.
The Italian lawyer can also help you obtain the "Codice Fiscale," which is a tax identification number required for non-residents who wish to buy property in Italy.
Additionally, they can assist with the verification of property titles and registrations, ensuring that there are no legal encumbrances or disputes affecting the property.
They will ensure that all necessary taxes, such as the "Imposta di Registro" (Registration Tax), "Imposta ipotecaria" (Mortgage Tax), and "Imposta catastale" (Cadastral Tax), are paid correctly and advise you on other fees and costs associated with the purchase.
Navigating the legal aspects of purchasing a property in Italy can be complex, so having a knowledgeable local lawyer by your side can provide valuable assistance and peace of mind throughout the process.
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What are the risks when buying real estate in Italy?
We've got an article dedicated to the risks associated with purchasing property in Italy.
1. Restrictive Property Regulations in Historical Areas
Italy is known for its rich historical heritage, and there are strict regulations governing properties located in historical areas.
These regulations aim to preserve the cultural and architectural integrity of these regions.
Familiarize yourself with the restrictions, permits, and renovation guidelines applicable to properties in historical areas before making a purchase.
2. Local Property Market Dynamics
Italy's property market can vary significantly between regions, cities, and even neighborhoods.
Research and understand the local property market dynamics in the specific area where you intend to buy. Also, you can download our documents.
Factors such as market trends, property prices, and rental demand can influence the long-term viability and potential returns on your investment.
3. Italian Bureaucracy and Administrative Processes
Italy has a reputation for bureaucratic processes and administrative complexities.
Be prepared for potential delays and navigate through the paperwork required for property transactions.
Engage with professionals, such as real estate agents and legal experts, who have experience with the Italian system to streamline the process.
4. Property Taxation and Additional Costs
Understand the Italian property tax system and additional costs associated with property ownership.
This includes property transfer taxes, annual property taxes (Imposta Municipale Unica), and other charges.
Consider these costs in your budgeting and financial planning to ensure a comprehensive understanding of the financial implications of owning property in Italy.
5. Seismic Activity and Natural Disaster Risks
Italy is located in a seismically active region and experiences earthquakes.
Assess the property's vulnerability to seismic activity and consider appropriate measures, such as earthquake-resistant construction or insurance coverage, to mitigate potential risks and protect your investment.
6. Italian Language and Contracts
Italian language proficiency is advantageous when dealing with property transactions in Italy.
Many contracts and legal documents are in Italian, so having a good understanding of the language is helpful.
Consider working with a trusted interpreter or bilingual professional to ensure clear communication and understanding of the terms and conditions of the contract.
7. Cultural Adaptation and Local Customs
Moving to Italy involves adapting to a new culture and local customs.
Familiarize yourself with Italian customs, etiquette, and social norms to integrate into the local community.
Respect cultural traditions and engage with the community to foster positive relationships and a smooth transition into Italian life.
What are the required documents for a real estate transaction in Italy?
When buying a property in Italy, the following documents are needed:
- sale-purchase agreement
- title deed
- cadastral documents
- building permits
- energy certificate
How do you negotiate effectively with individuals from Italy?
Italians place a high value on personal relationships, which is important to consider when negotiating the purchase of a property in the country.
To initiate the negotiation, it is advisable to establish a personal connection and build rapport with the seller or their representative. Take the time to engage in casual conversation, showing genuine interest in their culture and background. This will help create a friendly and trusting atmosphere.
Before entering into negotiations, thoroughly research the local property market in the specific region of Italy where you are buying. Familiarize yourself with average property prices, recent sales data, and any factors unique to the area that may impact the property's value.
During the negotiation process, be prepared to make compromises and demonstrate flexibility. This shows your willingness to find a mutually beneficial agreement.
Italians appreciate politeness and friendliness in negotiations. Maintain a respectful and amicable demeanor throughout the discussions, as this will contribute to a positive and constructive dialogue.
Make a profitable investment in Italy
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Are bank loans available to foreign nationals in Italy?
Foreigners can get property loans in Italy, but the eligibility criteria and requirements vary depending on the lender and loan terms.
If you're a foreigner looking to get a property loan in Italy, you'll typically need a valid residence permit, evidence of income or employment, and meet the specific requirements of the lenders.
Intesa Sanpaolo, UniCredit, and Monte dei Paschi di Siena are banks in Italy that have been known to consider mortgage applications from foreigners.
Moreover, mortgage rates in Italy for a 20-year term range from 0% to 4%, which are considered favorable, presenting borrowers with appealing financing opportunities.
What are the taxes related to a property transaction in Italy?
Here is a breakdown of taxes related to a property transaction in Italy.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Rental Income Tax | Tax on rental income generated from the property | 23% to 43% of gross rental income | Owner |
| Registration Tax | Tax on the transfer of an old property | 3% to 7% depending on the status of the property and the buyer | Buyer |
| Value Added Tax (VAT) | Tax on the sale of new residential properties | Between 4% and 22% of the property value, depending on its status | Buyer |
| Capital Gains Tax | Tax on the capital gain on the sale of a property held for less than five years | 20% on the net capital gain (the difference between sale price and acquisition cost) | Seller |
| Property tax (IMU) | Local property taxes imposed by the municipality | Varies from 0.4% to 0.7% of the cadastral value of the property, depending on its location and type | Owner |
What fees are involved in a property transaction in Italy?
Below is a simple breakdown of fees for a property transaction in Italy.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Land Registry Fee | Fee for registering the property transfer with the Land Registry | 1% of the value of the property | Buyer |
| Legal Fee | Fee for legal services related to the property transfer | Usually around 1% to 2% of the declared price of the property | Buyer |
| Notary Fee | Fee for notarizing the property transfer documents | Ranges from 1% to 2.5% depending on the property value, complexity of the transaction and the notary's fees | Buyer |
| Real Estate Agent Fee | Fee charged by real estate agents for their services | Between 3% and 8% of the property sale price, shared between the buyer and seller | Seller and Buyer |
-Buying a property as a foreigner in Switzerland: the guide
Buying real estate in Italy can be risky
An increasing number of foreign investors are showing interest in Italy. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.