Buying Real Estate in Italy for Foreigners in 2024: What You Need to Know About Taxes

Purchasing a home in sunny Italy is a dream for many foreigners. However, before making this dream a reality, it’s important to understand the tax obligations that fall on the shoulders of new owners.

When buying property in Italy, foreigners need to calculate all the tax expenses in advance.

Under Italian law, foreigners have the same rights to buy property as citizens do.

However, buying a home does not automatically grant an immigrant residency status, but it can be a significant advantage when applying for residency on other grounds such as education, work, or family reunification.

Taxes: What to Pay Attention To

 Once you purchase an apartment or villa, new owners are required to pay property taxes, which depend on several factors:

1. Whether it is a "first" or "second" property. A "first home" is considered to be the residence for the owner's permanent living and benefits from tax breaks. A "second home" is a property where the owner does not actually live—taxes on such properties are significantly higher.

2. The purpose of the purchase—whether it's for living, vacationing, or investing.

3. The type of property purchased, its cost, and the number of properties.

Types of Taxes 

In Italy, several types of tax levies apply to foreigners' properties:

- A registration fee paid upon purchase. Its rate varies from 2% to 9% of the property's cost.

- An annual municipal property ownership tax. Its amount depends on the cadastral value of the property and is set by local authorities.

- VAT when buying new buildings - 10% of the cost.

Other taxes that need to be paid when renting include registration and stamp duty.

The registration tax is paid upon the registration of the lease agreement: the home owner and the tenant split the sum in half.

Thus, when buying property in Italy, foreigners need to calculate all the tax expenses in advance. The amount can vary significantly depending on the status of the property and the purpose of the purchase.

Contact Mercury Group experts to select profitable real estate in Italy! info@mercuryestate.com