Your Complete Guide to Buying a Property in Italy in 2023

Buying a property in Italy

Known for its beautiful scenery, delicious cuisine, and rich history, Italy is a popular destination for Western tourists. As a result, it can be a great place to consider if you’re looking to buy international real estate for rental income or for relocating abroad.

To help you learn more about how to buy a house in Italy, our team here at Remitly created this guide. In it, we cover the benefits and drawbacks of buying property in Italy, introduce some of the best places in Italy to buy property, and provide tips and resources to assist you during the buying process.

Can Americans and other foreigners buy property in Italy?

Foreigners from countries with reciprocity agreements in Italy can purchase homes and condos, commercial properties, and raw land in Italy.

The UK, the U.S., EU nations, and several other countries have these agreements already in place. As a result, if you’re buying property in Italy as an American, you won’t face any restrictions in terms of where you can purchase property or how much you can spend. You also won’t have to lease your property from the government or have a citizen listed as a co-buyer the way you’d need to in some other foreign countries.

Why buy property in Italy?

There are a few potential benefits to buying property, like a house in Italy. Read on to explore them.

Lower cost of living

Compared to the U.S., Italy has a much lower cost of living. In fact, it’s 40% less expensive to live in Italy. While the U.S. ranks as the fifth most expensive place to live in the world, Italy is only 36th.

A lower cost of living benefits those looking for homes for sale in Italy in a couple of ways. If you’re looking to buy international real estate in hopes of moving abroad, you’ll spend less on things like food, utilities, clothing, and entertainment in Italy. If you’re renting out your property, you’ll also typically pay less to hire housekeepers to clean up after guests.

Low property taxes

Compared to many other Western countries, Italy has lower property taxes.

Called the IMU, the regular property tax in Italy is waived for primary residences that you live in for more than six months out of the year and that aren’t considered luxury residences. If you do need to pay the tax, the amount varies based on where you live but is often around 1.06% of the value assessed by the local government.

Many municipalities also charge a TASI tax for services provided by the local government and a waste collection tax called TARI. The amount of these taxes varies based on where you live.

Possibility for financing with low rates

Obtaining financing can be one of the most challenging parts of purchasing international real estate. One of the perks of buying houses for sale in Italy is that Italian banks will often approve foreigners who haven’t yet built credit in Italy for mortgage loans.

Banks do have strict criteria for extending mortgages to non-citizens. To qualify, you’ll need to have a strong credit score and credit history in your home country and a reliable source of income. If you’re approved, you’ll generally pay a lower interest rate than you would in the U.S.

Potential for rental income

As previously mentioned, Italy is a popular destination for tourists. In 2019, 6.2% of Italy’s GDP came from tourism, and the country’s Ministry of Tourism invests heavily in programs and promotions to attract visitors. That year, 96 million international travelers visited Italy.

While tourists do travel throughout Italy, Rome, Venice, Florence, Milan, and Naples are the biggest hot spots for international travelers.

Opportunity for home price savings

Like many other Western nations, Italy experienced a housing crash in 2008. Although the market has begun to recover, prices remain low in many parts of the country. As a result, how much a house is in Italy is often less than what you’d expect to pay in the U.S. for a similar home.

What’s the real estate market like in Italy?

Real estate market

In Italy, the real estate market has had setbacks in recent years. The housing crash in 2008 caused prices to drop, and they have yet to return to their levels before the economic turmoil.

As of 2023, experts predict that demand for homes among Italian buyers will be negatively impacted by concerns over inflation. With fewer Italians looking to buy, home prices will likely remain low, likely giving foreigners an opportunity to get deals, even in popular areas.

How much does it cost to buy property in Italy?

When considering houses in Italy to purchase, it’s important to remember that you’ll have costs beyond the sale price. Let’s look at what factors into the total cost of buying real estate in Italy.

Home prices

How much you can expect to pay for a home in Italy depends on where you plan to purchase. Here’s a look at the average prices for a 2,000-square-foot home in various regions as of 2023:

  • Abruzzo: $244,000
  • Aosta Valley: $550,000
  • Basilicata: $242,000
  • Calabria: $188,000
  • Campania: $336,000
  • Emilia-Romagna: $376,000
  • Friuli-Venezia Giulia: $288,000
  • Lazio: $450,000
  • Liguria: $516,000
  • Lombardy: $436,000
  • Marche: $312,000
  • Molise: $178,000
  • Piedmont: $262,000
  • Puglia: $248,000
  • Sardinia: $320,000
  • Sicily: $212,000
  • Trentino-South Tyrol: $578,000
  • Tuscany: $490,000
  • Umbria: $222,000
  • Veneto: $352,000

As you can see, home prices are highest in Trentino-South Tyrol, the Aosta Valley, and Liguria and lowest in Sicily, Calabria, and Molise.

Taxes

When purchasing property in Italy, you’ll need to pay a few different taxes to the Italian government. They include:

  • Registration tax: Equal to 3% for main residences or 7% for non-main residences
  • VAT: Equal to 4% for primary residences or up to 22% of the sale price for other homes
  • Land registry tax: Equal to 1% of the sale price for foreigners

Fees

In addition to taxes, you should expect to pay some fees when buying Italian property. These include:

  • Notary fee: Equal to 1 to 3% of of the sale price
  • Translator fee: Typically costs €250 to €350
  • Real estate agent fees: Ranging from 3 to 8% of the sale price, the buyer and the seller usually split the cost evenly.
  • Mortgage fees: Closing costs or mortgage fees vary greatly from lender to lender. Generally, they range from 1.25 to 4% of the sale price.

Insurance

Insurance can help protect your investment and is often required when you take out a mortgage. There are three types of insurance for homes in Italy:

  • Building insurance: This is the Italian version of homeowners’ insurance, which covers costs to repair a home if it’s damaged due to weather, a natural disaster, fire, or vandalism
  • Contents insurance: This type of insurance covers repair and replacement costs for furniture and other items in a home if they are stolen or damaged.
  • Liability insurance: This type of insurance covers costs if someone gets injured in your home or on your property and is important for those who intend to rent out their home.

The amount you can expect to pay for insurance depends on where your home is and its worth. Generally, insurance costs less in Italy than it does in the U.S. and can be as low as €25 per year to over €500 annually.

When shopping for insurance, get quotes from a number of different insurers to get the best deal.

Also, take the deductible into consideration. The deductible is how much you have to pay out of pocket before the insurance company will pay a claim. Policies with higher deductibles often have lower premiums but leave you responsible for paying more on your own.

Where is the best place to buy Italian real estate?

Italy real estate

The best place to buy property in Italy depends on your preferences, budget, and goals.

If you’re looking for somewhere to retire, access to hospitals and other services, the availability of recreational and cultural activities, and the weather may be some of your biggest concerns. Families may prioritize areas with great schools, while those looking to purchase investment properties will likely want to focus on areas that are popular with tourists.

To help you get started with your research, here is a list of some popular places for purchasing real estate in Italy:

  • Catania, Sicily: An affordable area with vineyards, beaches, and large farms
  • Costa Smeralda, Sardinia: A beach town that is home to many luxury planned communities
  • Florence, Tuscany: A major center for tourism due to its art and architecture
  • Italian Lakes, Lombardy: A popular destination for outdoor enthusiasts because it’s a great place for hiking, skiing, and watersports
  • Lucca, Tuscany: Home to a large summer music festival and the ruins of an ancient Roman amphitheater
  • Milan, Lombardy: A major economic center known for having high-quality hospitals and many great international schools
  • Rome, Lazio: The capital of Italy and the number one tourist destination in the country

The pitfalls of buying property in Italy

Although there are many benefits to buying homes in Italy, there are some potential drawbacks that you need to be aware of, including all of the following.

Cost of renovations

Although the cost of living is lower in Italy than in the U.S., construction prices are high. If you purchase a home with the intention of renovating or restoring it, obtain some quotes from contractors in the area so you’re aware of the additional costs.

Language barrier

Fewer than 30% of Italians speak English, which can complicate the buying process for Americans, Canadians, and other foreigners from English-speaking nations. Not only can it make communicating with sellers difficult, but it also means that you’ll need to have contracts translated before you can review and sign them.

Under-declaring price schemes

In Italy, many sellers ask buyers to declare a lower sale price and then settle the difference in cash, so they can pay less in taxes. To make the offer enticing, they might even agree to a lower price if you pay a portion in cash and under-declare.

Be careful not to fall into this trap. Under-declaring prices is illegal, and you could end up paying a hefty fine if you’re caught.

Impact of climate change

Due to climate change, Italy is seeing an uptick in severe weather events like landslides, floods, hurricanes, and heavy rainfall. In 2020, there were 1,499 of these events compared to 380 back in 2010. In the not-so-distant future, rising sea levels could make some coastal areas of Italy uninhabitable.

Political instability

In recent years, Italy’s politics have been turbulent. In 2021, the country scored only .058 on the Political Stability Index, which is a scale that ranges from -2.5 to 2.5.

While Italy is unlikely to see widespread political violence, a lack of stability could lead to economic problems like a devaluation of the currency that could negatively impact the value of homes in the future.

Tips and resources for buying Italian property

To make the buying experience as smooth and safe as possible, follow these tips when considering properties in Italy.

Do your research

As you consider homes for sale in Italy, research the following for all properties:

  • Ownership: Double-check who owns the property to verify that the seller has the right to sell it
  • Building compliance: Examine the property plan recorded with the local municipality to ensure that the property complies with local laws and that the home’s details match what’s on the plan
  • Occupancy status: If you’re purchasing a property that’s currently a rental, find out if there’s a current tenant and how long is left on their lease

Also, consult a tax professional to find out how buying property in Italy will impact your tax situation in your home country. For example, will you need to pay income tax on rentals?

See the property in person

While it is possible to buy property remotely in Italy, purchasing a home without seeing it first can be a big mistake. Virtual tours are no substitute for the real thing, and it’s important that you tour the surrounding neighborhood before you buy.

If you plan to use your home as a vacation rental, walk through the property and the surrounding area imagining yourself as a tourist. Remember that the success of a rental business largely depends on positive reviews, so you don’t want to overlook anything that might make guests feel uncomfortable or unsafe.

Hire a real estate agent and an attorney

A real estate agent showing a home to his clients

Even if you’re fluent in Italian, it’s important to hire professionals to assist you during the buying process. An Italian real estate agent can help you find properties that fit your budget and handle negotiations with the seller. They can also serve as a valuable resource for learning more about schools, medical facilities, and other services in the area.

A knowledgeable real estate attorney can protect your interests by ensuring the contract is complete and legal. They can also help file all the necessary paperwork with the appropriate government agencies.

When looking for a real estate agent and a real estate attorney, read online reviews and interview a few candidates. You can also ask for referrals from expats on social media.

Consider using a remittance service for payments

Italian banks are known for charging steep fees for international transfers and may often have less-than-favorable rates for currency exchanges. Using an online remittance service like Remitly may help you save money on fees and get a better exchange rate. Download the Remitly app to learn more.

Resources for buying property in Italy

Check out the following resources for more information about tourism, taxes, immigration, and other concerns.