How to buy a property in Italy if you are a foreigner

Between taxes and bureaucracy, it is not easy to buy a property in Italy if you are a foreigner. In order to get you on you way, we've put together a brief guide for foreign buyers to help you navigate the decision to purchase a home in Italy.

Requirements for foreigners buying a property in Italy

To buy a house in Italy, a non-Italian citizen must meet certain requirements:

• Residence permit in Italy: if the buyer is staying in Italy, they must have a residence permit, as must their family members.
• Foreigners not residing in Italy: if the buyer does not reside legally in Italy, the country of origin must adhere to an international treaty that allows the purchase of property in Italy, with a principle of reciprocity (therefore it must also be possible for an Italian to purchase a home in the country of the person in question). You can check the existence of this treaty on the website of the Ministry of Foreign Affairs.
• Foreigners who are EU citizens or part of an EEA country or stateless persons resident for more than three years: in this case, there are no limits to the purchase of property in Italy.
• Tax number: for both foreigners residing in Italy and non-residents, an Italian fiscal code must be acquired in order to complete the purchase.
• Passport: necessary to travel to Italy to visit the property, although you can technically buy a house remotely even with just a virtual visit.
• Current account: necessary for the transfer of money to pay the agreed sum, as well as transaction-related expenses and taxes. Find out how to open a bank account in Italy.

Procedures to buy a property in Italy

Foreigners purchasing a home in Italy must also comply with the three stages of buying a property in Italy.

In particular:

• Purchase proposal: an irrevocable offer containing the main terms of the transaction, such as details of the parties, details of the building subject to transaction, and the agreed sum.
• Preliminary sales contract: a written agreement that is drawn up once the proposal has been accepted, in which the payment of the deposit is provided for in addition to the other conditions for the purchase.
• Transcription of the deed: transcription in the notarial registers of the notarial document confirming the transfer of ownership.

Foreigners buying a house in Italy: what are the potential pitfalls?

A foreigner buying a house in Italy may have some difficulties or certain issues to overcome linked to their situation. Here are some of them:

• Knowledge of the language: if the foreigner buying a house in Italy does not know the Italian language, the notary must be made aware of this fact. The acts relating to the purchase and sale must be carried out in the presence of an interpreter and the notarial deed in Italian must be followed by an official translation into the purchaser's language.
• The purchaser is not in Italy: if the purchaser is not physically present in Italy at the time of the purchase, the sale can still be concluded by proxy, i.e. by means of a document delegating to a third person the power to perform the legal act in the absentee's place.

Buying a property in Italy, taxes and tax benefits for foreigners

Even if the buyer of the property is a foreigner, they must pay the taxes and duties connected with buying a property in Italy, in particular registration, mortgage and cadastral taxes.

Even foreigners, however, can access the concessions for the purchase of a home if they meet the requirements of Italian law, i.e. those defining the main house as a non-luxury registered house and located in the municipality where the buyer has residence or will have it within 18 months. The purchaser must also not be the owner of other houses, even if only a share or bare ownership. In particular:

• First home purchase from a private individual, from a non-construction company or from a construction company more than 4 years after completion of works: registration tax of 2% on the cadastral value of the home and fixed mortgage and cadastral taxes of € 50 each;
• Purchase from a builder, before 4 years from completion of works: 4% VAT, fixed registration, mortgage and cadastral taxes of € 200 each.

If, on the other hand, the property is a luxury home and does not qualify as a 'first home', registration, cadastral and mortgage taxes must be paid at a fixed rate if the transaction is subject to VAT or at a proportional rate of 9% if exempt from VAT.