The value of the Italian real estate market will hit an impressive US $8.03 trillion by the end of this year. It is also expected to grow with a 1.02% CAGR between 2024 to 2029.
So, what does this all mean for the buyers? The market is looking pretty good so, if you want to get a high return on your investment, this might the right time to buy property in Italy.
Today, we will discuss how you can do that. Whether you are a foreigner or local, this comprehensive guide will walk you through the entire process of buying property in Italy. Here’s what we will talk about:
- Cost & Market Analysis
- 5 Best Places for Investment
- Step-by-Step Buying Procedure
- Tips to Make the Right Choice
Ready to become an Italian property owner? Let’s explore how!
Can a Foreigner Buy Property in Italy?
Yes, foreigners can buy property in Italy. However, there are some rules and policies that apply – even though the country is largely known to be a “no-restriction zone”.
Residents
Italian residents are not necessarily citizens. If you migrated to the country or are living there for business, employment, or education reasons, you are considered a resident. Your valid resident permit makes you eligible to buy a property just like any other local.
However, people who have stateless or refugee status must have lived at least 3 years in the country to buy a property.
Non-Residents
Foreigners who don’t reside in Italy can only purchase property if their home country has a reciprocal treaty. This means that their home country and Italy should have an agreement to purchase properties.
As of 2024, nationals of the US, UK, and Canada can purchase real estate in Italy.
EU/EFTA Citizens
People living in the European Union (EU) or European Economic Area (EEA) can buy properties in Italy like locals. There are no legal requirements for them.
Italian Golden Visa Holders
You can invest in real estate through Italy Golden Visa if you meet none of the above categories. It is an investor visa that allows you to gain residence through investment.
You have the following options:
| €2 million | Italian Government Bonds |
| €500,000 | Italian Limited Company |
| €250,000 | Italian Business Startup |
| €1 million | Donation to an Italian Philanthropic Cause |
It’s possible to indirectly invest in real estate through the 2nd and 3rd options. You can also buy properties once you have gained a residence permit via investment in any option.
Buying a Property in Italy: Reasons Behind
The Italian real estate market is long known to be stable and healthy. It suffered in the first quarter of 2020 because of the global pandemic and its economic setbacks. However, since then, the market has recovered greatly.
Residential real estate is the most popular option in Italy. It is currently taking the lead with a market volume of $8.03 trillion. This means people are more inclined towards buying and selling homes.
72% to 74% of the locals already own a residential property – a figure that has remained stable since 2008. However, 1 in 5 Italians also have at least one additional property. So, we can tell that, even among locals, there’s a huge buyer market.
Moreover, thanks to the tourism industry, rentals are in very high demand. It takes less than 24 hours for most Italian properties to get tenants. The average rent of a 2-bedroom apartment is also $1,080/month in 2024 (13.9% more than last year).
Here are some other reasons why buying a property in Italy is a great idea:
1. Low IMU Tax
Italy does not impose heavy taxes on real estate. The Imposta Municipale Unica or the main property tax is very cheap compared to other countries and is assessed by the government. So, it may vary between 0.4% to 0.8%.
You may also have to pay a TASI tax for government services and a TARI tax for trash collection. However, for primary residences (in which you have lived for more than 6 months), these taxes are waived.
If your primary residence is a luxury home or you own an additional property, the IMU tax will apply in full.
2. Cheap Cost of Living
This is a subjective aspect because if you’re from a third-world country, the cost of living in Italy will seem too high. However, generally, the Italian lifestyle is more economical and affordable than most Western countries.
For example, if you compare the USA and Italy, the latter is 20% cheaper. This includes property rent, food, transportation, and other important expenses. You can live a very comfortable life for just $1900 per month.
So, if you want to move to Italy with your family or buy your retirement home there, it’s actually a great plan that can save you thousands annually.
3. Beautiful Landscape
It goes without saying that Italy is a stunning country with a diverse landscape. You can find mountains, valleys, lakes, rolling hills, and even a sea. It’s also home to iconic ruins, cinematic small towns, and romantic cities.
The US News & World Report ranks it as the third most scenic country in the world. More than 60 million tourists visit every year, too. So, purchasing property on this land can be truly rewarding in terms of both – personal use and investment.
How Much Does It Cost to Buy Property in Italy?
On average, you can buy a 2000-square-foot house in Italy for €380,000. This price fluctuates up and down based on the location and property type.
For example, Milan has experienced a 3.1% increase in property prices since 2023. The current average is €432,000. Similarly, real estate prices in Florence increased by 2.8% and 1.3% in Rome.
This is because these cities are most popular among tourists and foreign investors. They also have better luxury and modern design properties than Italian small towns. So, you should expect to spend more in these locations.
Some other pricing factors you should consider for property purchase in Italy:
1. Imposta Di Registro
The property registration tax is between 2% to 9%. If the house is your primary residence, you will pay a 2% property tax at the time of purchase. For investment or secondary properties, the tax is 7% to 9%.
2. Value Added Tax
VAT is applied on newly built or renovated properties. In Italy, this value-added tax is around 4% to 22%. This huge range is influenced by the property’s location.
3. Notary & Legal Fees
During the purchase process, you may have to pay up to 2% in notary and legal fees. Most foreigners also rely on realtors and companies for successful deals, so you may want to consider their commission (3% to 6%), too.
Pros & Cons of Buying Italy Real Estate
| For Investors | |
| Pros | Cons |
| Has a strong rental market | Buying from abroad can be difficult |
| Property value appreciates over time | Transaction costs may be high |
| Diversifies your portfolio | Economic fluctuations |
| May receive government incentives for property renovation or new development | |
| For Personal Buy | |
| Pros | Cons |
| Has a rich culture & history | Residency requirements for foreigners |
| Better & cheaper quality of life | Higher costs in popular cities |
| Pleasant Mediterranean climate | |
| Authentic Italian cuisine | |
5 Best Places to Buy Italian Properties
Italy offers a range of attractive locations for property buyers, each with its unique charm and benefits. Here are five of the best places to consider for buying property in Italy:
1. Florence (Firenze)
Florence is situated in the heart of the Tuscany region. Offering excellent restaurants, shops, and cultural events make this city an attractive place for visitors. It also has a strong tourism industry that potentially makes rental properties highly lucrative, although prices can be on the higher side.
As of June 2024, residential properties in Florence have an average price of €4,279 per sqm. There is a 3.38% increase from the previous year.
2. Rome
As Italy’s capital, you can find a diverse range of properties in Rome, from historic apartments to luxury homes. It also has a dynamic job market as well as educational institutions, and entertainment options. These are also some aspects making Rome an attractive location for both residents and investors.
The real estate market is competitive. However, there is favorable potential for short-term and long-term rental investments. It is possible to expect spending an average of € 3,395 per sqm. when buying property in Italy.
3. Milan (Milano)
Milan is an important city for business and finance. As a hub, it is one of the most expensive places to buy property in Italy. For example, the average price per square meter can be €5,456 if you plan to buy property.
However, we need to mention how strong the rental market is and the growing property values. Investment potential in Milan is significant too. Especially, it is true for central districts and emerging neighborhoods.
When it comes to finances, we can share some results from a study in 2023. Based on that, a residential property in Milan provided an 8.8% gross return in rentals. On the other hand, commercial properties had a greater profitability of 12%.
4. Lake Como
As a specific area, Lake Como is surrounded by the beautiful Lake Cosmo, an Italian city. People who want to invest in the top-tier real estate market of Italy may prefer this region.
Lake Como has a natural beauty that stands near small towns like Bellagio and Varenna. That is why it is a popular rental choice for tourists. You can add Lake Como to your list and go back-to-back bookings during the holiday season.
About the economics, you may keep in mind that the average cost per square meter is €2,784. It is actually way cheaper than other cities in Italy.
5. Palermo
Palermo, on the island of Sicily, is rapidly growing regarding popularity. Tourists keep discovering its attractions and locals are eyeing its real estate potential day by day. When it comes to the property prices, we can say that Palermo is generally more affordable.
The average price per square meter, which is €1,469, makes Palermo an attractive option for budget-conscious buyers.
| Italian City | Avg. Cost for Real Estate (per sq. m) |
| Florence | €4,279 |
| Rome | €3,395 |
| Milan | €5,456 |
| Como | €2,784 |
| Palermo | €1,469 |
How to Buy Property in Italy? A Step-by-Step Guide
Buying property in Italy can be a challenging experience, especially for foreigners. Let’s see the detailed step-by-step guide to help you make smoother decisions:
1. Choose a Route
You can choose between two routes to buy property in Italy. It can be weathered with the help of a realtor or a self-buy. In general, real estate agents or realtors can be considered more reliable and safe. As they are professionals with in-depth knowledge of the local market, they can guide you through the entire process. They can also help you understand property values, negotiate deals, and handle the paperwork.
When you find the right realtor for you, they will have access to properties that might not be listed online. So it will provide you with a broader range of property options. Remember that there might be commissions of around 3% to 8%.
Also, you have an option to avoid this if you prefer to buy property using online websites. You can compare and browse properties at your own pace. However, you need to be more proactive in researching and understanding the legal aspects of buying property in Italy when you do not collaborate with a realtor or real estate agent.
2. Pick a Place for Property Purchase
Italy has diverse regions, each with its unique characteristics. Think about what’s important to you – whether it’s proximity to work, quality of schools, or the lifestyle you want. Make a decision around these needs.
To give you an idea, Northern Italy is known for its vibrant cities like Milan and Venice, and scenic areas such as Lake Como. You can find a blend of urban and countryside lifestyles in this part.
Central Italy includes the Tuscany region, which is famous for its rolling hills and historic towns like Florence. Moreover, southern Italy Southern Italy features regions such as Sicily and Naples.
3. Browse Available Properties
Once you’ve decided on a location, it’s time to explore available properties. In Italy, you’ll find a variety of property types:
- Apartments (Appartamenti): These are common in cities and towns. They range from small studio apartments to large multi-bedroom units. Urban apartments often come with modern amenities and may be located in historic buildings.
- Villas: Ideal for those seeking more space, villas are usually detached homes with gardens. They are popular in rural areas and offer more privacy. Villas can vary from charming country homes to luxurious properties with extensive grounds.
- Farmhouses (Casali): These are traditional rural properties that often come with land. They are perfect for those looking to live in the countryside and might be in need of renovation.
- Townhouses (Case a Schiera): These are typically found in both urban and rural settings. Townhouses are often multi-story and share walls with neighboring properties. They offer a balance between apartment living and the space of a detached house.
- Historic Properties: Italy is filled with historic buildings, such as old palaces, castles, and converted monasteries. These properties can be unique investments but may require more maintenance and restoration work.
4. Visit the Top 3 Choices
After narrowing down your options, schedule visits to the top three properties. Seeing the properties in person is very important because it allows you to understand their condition and suitability.
During your visit, make sure to check for any signs of damage or required repairs. Also, explore the neighborhood to ensure it meets your needs. For example, if you have a family with kids, try to invest in a location that has amenities like schools and shops nearby.
It’s also best to talk to the property owner about legality during this visit. Ask about whether the property complies with local building codes and regulations. You definitely don’t want to buy a property with legal issues.
5. Discuss & Secure the Deal for Property Price
Once you’ve found the property you want, it’s time to discuss and secure the deal. You can start this process by negotiating the price to ensure it fits your budget. If you’re working with a realtor, they will automatically do this task for you.
You should also consider engaging a local lawyer to review the contract. They will help point out any legal concerns in the property or its title. When satisfied, you will have to pay the deposit (around 10% of the purchase price) to secure the real estate.
A purchase agreement will be created and signed by both parties. And once its conditions are met, you can pay the full amount and get ownership.
A Few Tips from the Experts!
All in all, buying property in Italy is an excellent decision that benefits you in the short as well as long term. There are many properties available with a lot of ROI potential.
However, whether you’re a foreigner or local, it would be more secure to involve a realtor in your buying process from the start. They will help you find the best Italian properties in your budget.
Frequently Asked Questions
Can I buy a house in Italy as a foreigner?
Yes, you can buy a house in Italy as a foreigner and there are no restrictions in Italy for foreigners to buy property. It is a similar process for foreigners and Italian citizens. Though, non-EU citizens may need to prove additional documents. This process may require you to open an Italian bank account to buy property in one of the Italian cities.
Is buying a house in Italy a good investment?
There has been a steady growth in Italy’s property market in recent years. This makes it an attractive investment option. However, researching the specific location is important, and understanding the property type may help investors move forward smoothly. Property prices in Italy vary depending on the location. While some areas experience higher demand, others have less price growth.
How long can you stay in Italy if you own property?
When you own a property in Italy, it does not mean that you automatically get a visa or residency permit in ıtaly. If you are a non-EU citizen, you need to get the appropriate visa for extended stays.
What city in Italy is the cheapest to buy property?
Calabria, Molise, and Abruzzo are some of the cheapest cities to buy property in Itlay and they are often smaller towns in the southern regions. Also, house prices will change in various cities.
