Property Investment in Italy: Foreigner's Guide (2025)

Italy welcomes foreign non-residents from EU-based countries and many other nations wanting to invest in Italian real estate. From modern apartments in major cities to beautiful countryside villas, Italy offers a wide range of real estate opportunities for international buyers.

This newly updated 2025 edition guide will take you through the basic steps and important things to consider when buying property in Italy as a foreign first-time buyer.

Table of contents:

1. Can Foreigners Buy Property in Italy
2. Best Cities and Regions to Invest
3. Square Meter / Square Foot Prices
4. Median Asking Prices
5. Rental Yields and Rents
6. Market Performance (Past and Present)
7. Landlord and Tenant Laws
8. Property Related Taxes
9. Buying (and Selling) Costs
10. Short-Term Rental Regulations
11. Mortgage and Financing Options
12. How to Buy Property in Italy: Step-by-Step

1. Can Foreigners Buy Property in Italy?

Yes, foreign nationals can purchase property in Italy – with some restrictions.

Citizens of countries in the European Union have the same property ownership rights as Italian citizens. Non-EU citizens, however, fall under Italy’s “reciprocity principle.” This means a buyer’s home country must allow Italian citizens to purchase property under similar terms as Italy’s.

Most Western countries – including the US, Canada, UK, and Australia – abide by these agreements, which allow citizens to purchase residential and commercial property in Italy.

2. Best Cities and Regions to Invest

Italy remains one of Europe’s most attractive real estate markets thanks to its combination of lifestyle, tourism, and relatively low property prices compared to other Western European countries.

• Florence offers a rare combination of strong rental yields (especially short-term) and consistent price growth (+6.1% YoY). Its global tourism appeal, cultural prestige, and limited housing supply make it a top-tier investment location.
• Rome balances healthy rental returns with long-term capital appreciation. As Italy’s capital and a year-round tourist and business hub, it has stable demand from both tenants and buyers, making it one of the safest bets for long-term investors.
• Milan is Italy’s financial and fashion capital, with a deep rental market and steady international interest. While property is more expensive, it offers stability, high tenant quality, and excellent liquidity in both rental and resale markets.
• Turin is one of the most affordable major cities in northern Italy, yet it offers decent yields and a growing appeal among digital workers and students. It’s ideal for value-oriented investors looking for solid returns with lower entry costs.
• Catania, on Sicily’s east coast, combines low property prices with high short-term rental yields due to rising tourism. Its airport connectivity and active expat interest give it solid momentum as an emerging investment hotspot.
• Palermo is a budget-friendly city with strong potential for yield-focused investors. While capital appreciation is slower, the low cost of entry and a vibrant local tourism scene make it ideal for Airbnb and medium-term rentals.

3. Square Meter / Square Foot Prices

Italy’s square meter prices fall in the moderate to low range compared to other European countries.

• Milan: €5,434 per m²
• Florence: €4,404 per m²
• Rome: €3,508 per m²
• Naples: €2,922 per m²
• Turin: €2,048 per m²
• Genoa: €1,688 per m² 
• Palermo: €1,495 per m²

As Italy’s financial and fashion capital, Milan has the highest property values due to the city’s strong job market and robust economy. Both Florence and Rome, which attract millions of tourists each year, also experience high demand, limited supply. Even so, property in these cities are more affordable than in many other parts of Europe.

Several smaller villas across Italy are significantly less expensive, offering appealing investment opportunities with higher returns.

4. Average Asking Prices

Median asking prices for 1-bedroom apartments vary across key Italian cities as of mid-2025:

• Milan: €303,000
• Florence: €245,000
• Rome: €197,000
• Naples: €135,000
• Turin: €89,000
  
• Palermo: €75,000
• Catania: €75,000

5. Rental Yields and Rents

Rental yields in many of the most sought-after Italian communities exceed many European destinations. This is especially true for smaller tourist-friendly regions such as Catania, Turin, and Palermo, where gross returns frequently reach above 8%. These dynamic markets create a unique environment with both robust local and short-term tourism rental demand at a relatively lower investment cost compared to larger metro areas.

Higher-profile areas such as Rome and Florence still provide 7% returns. Milan’s increased property prices push yields down slightly to an average of around 5%. This exciting city is still an attractive investment prospect thanks to its steady rental demand.

As of June 2025, rental rates for 1-bed properties in major Italian cities are approximately as follows:

• Milan - € 1,500
• Florence - € 1,600
• Rome - € 1,500
• Naples - € 1,000
• Turin - € 850
• Palermo - € 675
• Catania - € 650

Italy's rent price index:

Data Source: OECD.

6. Real Estate Market Performance (Past and Current)

Italy’s housing market boomed from 2000 to 2008, with prices significantly increasing – until the global financial and Eurozone debt crises triggered a sharp decline. Italy has still not fully recovered.

A sluggish economy and new property taxes weighed down the housing market until 2019, when the economy began to see modest gains. Despite inflation, 2024 marked the strongest housing market uptick in over a decade, especially in the new housing market.

Here's a year-by-year look at how the Italian market has performed:

Here’s a year-by-year look at how Italy's property market has performed:

Data Source: European Central Bank (ECB).

7. Landlord and Tenant Laws

Italy laws are judged by the Global Property Guide as pro-tenant, with lengthy legal processes that make it hard to evict without compensation, even in non-payment. While property owners can set rental rates, prices cannot increase during lease terms unless cost-of-living adjustments are explicitly outlined in the rental contract. Additionally, landlords may not request more than three months’ rent in advance or a security deposit exceeding three months’ rent.

8. Property Related Taxes

Nonresidents are taxed only on their income earned in Italy. Rental income is generally taxed at a flat rate of 21%. Short-term rentals on additional properties are taxed at 26%. Corporations are taxed on rental income at the 25% corporate tax rate.

Additionally, capital gains are taxed at 26%, but sellers are exempt if the property served as their primary residence or was held for over five years.

Regional income taxes (ranging from 1.23% to 3.33%) and municipal surtaxes (up to 0.8%) also apply. Additional taxes may include IMU, a type of property tax on luxury properties or second homes, TASI for local public services, and TARI for waste collection. Certain deductions of up to 19% may be available for non-residents, including for mortgage interest.

Further reading: Guide to property taxes in Italy.

9. Buying (and Selling) Costs

Compared to other parts of Europe, Italy’s property transaction costs are in the moderate-to-high range.

On top of the purchase price, buyers can expect to pay an additional 7% to 15%. Seller costs are much lower, averaging 3%.

10. Short-Term Rental Regulations

Short-term rentals are permitted across Italy, but hosts are subject to national and regional requirements.

Several Italian communities have specific zoning laws that may limit short-term rentals, especially in historic or residential neighborhoods. For instance, Rome has tighter zoning laws in historic districts, while Florence prohibits short-term rentals in important cultural zones and has tighter size requirements.

All short-term rentals must adhere to basic safety and quality guidelines, including smoke detectors, fire extinguishers, and emergency exit signage.

Hosts must register short-term rentals with their local municipalities and obtain a unique identification code. Each rental under 30 days requires a short-term lease agreement. Venice requires a special registration and license for rentals exceeding 120 days.

Hosts must collect and submit their guests’ passports or ID information to the local police, typically within 24 hours of check-in. They also must pay a tourist tax, which is usually collected from guests.

11. Mortgage and Financing Options

While Italy has a well-established mortgage market, it can be more cautious when lending to foreign buyers. Several Italian banks offer mortgages to non-EU buyers in areas that fall under Italy’s reciprocity principle, but buyers may pay higher interest rates, a larger down payment (typically 30% to 50%), and require more paperwork.

Before applying for a mortgage, lenders must obtain a Codice Fiscale – a free Italian tax ID. This is also necessary for opening an Italian bank account, which most mortgage companies require.https://www.globalpropertyguide.com/europe/italy/mortgage-interest-rate

Interest rates vary based on the type of mortgage and other factors. Italy’s mortgage rates climbed from 2022 to 2023, but have trended downward since late 2023/early 2024.

Most mortgages can be taken out for up to 30 years, or until the lender reaches a specified age, usually 75. The lender may also require the owner pto urchase both mortgage insurance and life insurance.

Italy's mortgage loan interest rates:

Data Source: ECB.

12. How to Buy Property in Italy: Step-by-Step

1. Research and Find Property: Start by exploring the different areas of Italy, as property costs and rental potential vary significantly. Use sites like Idealista.it, Gate-away.com, or connect with a local real estate agent (agente immobiliare).
2. Research Pricing, Yields, and Legal Restrictions: Foreigners can legally buy property in Italy, though non-EU buyers must come from countries with reciprocity agreements. Mortgage approval for non-residents often requires a higher down payment (20–40%) and detailed documentation. Rental yields are stronger in tourist-friendly areas like Catania and Palermo (8%+), while prime cities like Milan offer lower yields (~5%) but strong long-term demand.
3. Research Long-Term Market Change: Italy’s property market is more conservative than some European neighbors. After a decade-long slump, prices have risen steadily since 2020.
4. Research Local Taxation and Landlord Laws: What are all the costs required to purchase the property transaction? For rental properties, what are the area’s regulations and practices between landlords and tenants?
5. Get Legal Advice: Work with an English-speaking notary (notaio) to handle the legal transfer. They verify ownership, check for liens, and prepare the final deed. You may also want a real estate lawyer for more complex cases (e.g., shared properties, rural land, or major renovations). A local broker or surveyor can help assess the property condition.
6. Make an Offer and Conduct Due Diligence: Once your offer is accepted, you’ll sign a Compromesso (preliminary contract) and pay a 10–30% deposit. This agreement is legally binding and should include any contingencies (e.g., mortgage approval, inspection results). If you withdraw your offer for reasons outside the noted continencies, you’ll lose the deposit. If the seller withdraws, they must pay double your deposit.
7. Sign the Sale Contract: The sale is formalized by signing the final deed of sale in front of the notary. Both buyer and seller (or their legal representatives) must be present. The remaining balance is paid, and ownership is transferred.
8. Payment and Registration: The notary files the deed with the land registry and pays any due taxes (e.g., registration tax, stamp duty) on your behalf. This step confirms your legal ownership.

Timeline: 2-6 months from offer to official registration

Need Help?

Buying property in a foreign country can feel overwhelming, but we're here to help.

At Global Property Guide, we offer:

• Data-backed insights on property prices, rental yields, and taxes
• Country-specific legal and tax guidance through our partner network
• Pre-screened investment properties, including income-generating Airbnb units
• 1-on-1 consultations with real estate experts focused on international buyers
• Step-by-step buyer support, from due diligence to closing

Whether you're looking for your first investment in Italy or expanding your international portfolio, we can help you make smart, secure decisions.

Contact our team or book a free consultation to get started.