Buying a home in Italy: what you need to know

A first step is to understand whether, and in which category, a foreign national falls among those allowed to purchase property in Italy.The law distinguishes between three main categories of foreigners who can buy a home without particular issues:

1. Foreigners legally residing in Italy, together with their family members and stateless persons residing for less than three years, must hold a valid residence permit or residence card.

   
   

2. Foreigners not legally residing in Italy may purchase property only if there is an international agreement allowing such a purchase, or under the so-called “reciprocity condition,” meaning that in the foreigner’s country of origin, Italian citizens are likewise allowed to buy property.

   
   

3. Citizens of the EU and/or EFTA (European Free Trade Association) and stateless persons residing for more than three years have no restrictions.

   
   

Once the eligibility to proceed has been confirmed, the next step is to determine the type of property to be purchased (whether it will be a first or second home, a luxury property, a condominium unit, a purchase from a private seller, etc.).

The actual purchase procedure: the role of the Notary

As with any real estate transaction, there are three stages in the purchase process:

1. The purchase offer;

2. The preliminary sale agreement (or “compromesso”);

3. The final sale contract.

   
   

In both the intermediate and final stages, the presence of a Notary ensures that the agreement between the parties is given full legal validity.

While the Notary’s participation in the preliminary agreement is not mandatory—although strongly recommended—in the case of the final contract, the notarial deed is essential. It formalises the parties’ commitments (most importantly, the payment of the price and the transfer of ownership to the buyer) and triggers a series of post-signing obligations.

As a public official, the Notary must record the sale in the public registers and forward all relevant documentation to the Land Registry and the Real Estate Registries for official registration. Only then is the transfer of ownership from A to B legally recognised vis-à-vis third parties.

What if the foreign buyer does not speak Italian?

If the buyer does not speak Italian, it is necessary to account for this by involving an interpreter/translator, appointed according to notarial law, in the presence of the Notary and the witnesses (if none of them speaks the foreign language).

Furthermore, the Italian notarial deed must be accompanied by a translation into the buyer’s language, certified by an official translator (which may be the Notary himself/herself, if fluent in that language) and matching the Italian text.

Who appoints the interpreter?

Notarial law explicitly states that, in cases involving a foreign party, it must be verified whether the parties and the Notary speak the foreign language. If the Notary does not know the foreign language of the party, it is up to the contracting parties to appoint the interpreter.

The interpreter must translate the notarial act and sign the sale contract together with the two witnesses, the parties, and the Notary. Their role is to facilitate communication between the parties and the Notary. Before proceeding with the translation, the interpreter must swear before the Notary to carry out their duties faithfully, and this oath must be recorded in the notarial deed.

Interpreter’s requirements

According to notarial law, the interpreter must meet the same requirements as witnesses: be of legal age, be an Italian citizen, and have no personal interest in the transaction. A foreign citizen can also serve as interpreter but must be a resident in Italy.

The following are not eligible: blind, deaf, or mute persons; relatives and in-laws of the Notary or the parties within the degrees indicated in Article 28; the spouse of any of them; and anyone unable to sign. The Notary must check that the interpreter meets the legal requirements.

Must the witnesses speak the foreign language?

If all parties can sign their names in full, only one of the two witnesses must know the foreign language. If one of the parties cannot sign, both witnesses must speak it. In any case, the witnesses must always know Italian.

What if the foreign buyer is not in Italy to finalise the deal?

Sometimes the prospective buyer cannot attend the signing in person. In such cases, the issue can be resolved by granting a power of attorney, a document authorising another person to perform a legal or factual act on behalf of the grantor.

For example, if a French citizen cannot be present at the notarial signing in Italy, she could give power of attorney to her husband to finalise the sale. With this document, she can still purchase the property.

What taxes must a foreign buyer pay?

The taxes payable in Italy depend on the property purchased, the buyer’s assets, and the seller’s status.

Taxes related to the purchase include registration, mortgage, and cadastral taxes. Taxes related to property ownership include IMU and TASI.

Focusing on purchase-related taxes:

• If the seller is a private individual, the Consolidated Registration Tax Act requires the buyer to pay registration, mortgage, and cadastral taxes. These are fixed if the sale is subject to VAT, or proportional at 9% if exempt from VAT. A reduced rate of 2% applies if the purchase qualifies for “first home” benefits.

• If the seller is a company, the sale is subject to VAT under Presidential Decree 633/1972.

  
  

“First home” benefits for foreign buyers

As mentioned above, if the property is intended as the buyer’s main residence, reduced taxes apply, with different amounts depending on whether the purchase is from a private seller, a construction company, or a non-construction company:

• From a private seller or from a company more than four years after completion: registration tax at 2% of the cadastral value.

• From a construction company within four years of completion: VAT at 4%, with fixed registration, mortgage, and cadastral taxes.

  
  

Requirements for properties to qualify for tax relief

To benefit from the tax relief, the property must meet certain conditions:

• It must be classified as a “residential property” within categories A/1 to A/11.

• It must not be a luxury property (as per Ministerial Decree 218/1969).

• It must be located in the municipality where the buyer resides or intends to move.

The benefit also applies to appurtenant properties such as cellars, garages, sheds, attics, etc.

Accordingly, the buyer must take up residence in the municipality where the property is located within 18 months of purchase, if not already residing there.

Moreover, the buyer must not be the sole or partial owner of another property with ownership, bare ownership, usufruct, or habitation rights purchased by them (or by their spouse) as a main home.

Access to housing and financing

Foreigners holding a valid residence permit or other document proving lawful residence, and registered with the employment office, are entitled—under the same conditions as Italian citizens—to:

• access public residential housing;

• obtain subsidised loans for the purchase or rental of a first home;

• benefit from income tax deductions applicable to a main residence.