Like many of you, I’m a foreigner in Italy. I made the leap over 20 years ago from Eastern Europe, and this beautiful country has given me a new husband and a thriving career in real estate. For the past 15 years, I’ve been helping people like you find their dream homes here.
Or at least, that’s what I thought I was doing. Let me explain.
It was during a dinner with some American clients that I had a revelation. I'm not just a real estate agent-I'm a guide, helping people navigate a new way of living in Italy. It’s about more than just finding a house; it’s about understanding a new tax system, enrolling in new schools, and adapting to new laws.
So, I decided to write this article for you, my American friend, who’s about to step into Italy (and if you’re not American, don’t worry—I’ve got something for you too: "Can Foreigners Buy Property in Italy?" [1]).
But first, let’s clear up a big misunderstanding. Buying a house in Italy does not automatically give you citizenship, residency, or a pass on taxes. They’re all separate issues; I’ll break them down below.
In a heartbeat
- Yes, Americans can easily buy property in Italy. It's a straightforward process, and I'm here to guide you through it.
- Dual citizenship is not required, but it opens up a world of opportunities.
- You don’t need to be a resident to buy property in Italy.
- If you choose to reside in Italy, you'll unlock “First home” tax discounts and must pay taxes on your global income. This setup can be incredibly advantageous for High Net Worth Individuals (HNWI).
Understanding property laws for U.S. citizens in Italy
Can Americans buy property in Italy?
Yes. Absolutely yes.
Thanks to the reciprocity agreement between the U.S. and Italy, American citizens can buy any property in Italy—whether it’s a residential home, a shop, an industrial space, or even a hotel.
Reciprocity agreement between the U.S. and Italy
The reciprocity agreement between Italy and the U.S. [2] means that just as Americans can purchase property, establish companies, hold corporate positions, and buy shares in Italian companies, Italians can do the same in the United States. It’s a win-win for both sides!
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Legal requirements for non-EU citizens
In order to buy a house in Italy, any foreigner must meet one of these conditions:
- You have a passport from an EU or EFTA country.
- You possess a valid Italian residence permit.
- You hold any other passport but meet the reciprocity condition (as is the case for Americans).
The one document you must have is the Italian tax code (codice fiscale). Without it, you can’t register your offer to buy, and the notary won’t be able to finalize the purchase contract.
How to obtain a Codice Fiscale
You’ve got two ways to get your Italian codice fiscale (tax ID):
- Option 1: You can apply at the Italian Embassy or Consulate in your home country. Sure, it’ll take a few weeks—so get comfy while you wait.
- Option 2: If you’re feeling adventurous, head straight to the Agenzia delle Entrate (Revenue Tax Office) in Italy with your passport in hand, and voilà! You’ll walk out with it on the spot.
Applying for tax benefits on your First Home (Prima casa)
The Italian government offers some excellent tax benefits for purchasing your first home, or as they say in Italy, "Prima casa." Before we dive into the juicy savings, let’s clarify what a "Prima casa" actually is.
Prima casa (first home) is the property in the municipality where you have your official residence.
Here’s the kicker: the tax savings on your first home are significant if you’re buying a residential property (sorry, luxury homes in categories A/1, A/8, and A/9 are excluded):
- 2% tax instead of 9% on the cadastral value, if you buy from a private seller.
- 4% VAT instead of 10% on the agreed price, if you buy from a developer.
Let’s break it down with some actual numbers:
- Cadastral income: €1,328.59
- Sale price: €550,000
If you’re buying from a private seller:
- Cadastral value for “primary home” = 1,328.59 x 115.5 = €153,452.15.
- Registration tax for “Prima casa” = 2% of €153,452.15 = €3,069.04.
- Cadastral value for “second home” = 1,328.59 x 126 = €167,402.34.
- Registration tax for “second home” = 9% of €167,402.34 = €15,066.21.
- Savings: €15,066.21 - €3,069.04 = €11,997.17.
If you’re buying from a developer:
- VAT for “Prima casa” = 4% of €550,000 = €22,000.
- VAT for “second home” = 10% of €550,000 = €55,000.
- Savings: €55,000 - €22,000 = €33,000.
Not bad, right?
To qualify for these first-home benefits, regardless of your nationality, you need to:
- Transfer your residence to the municipality where the property is located within 18 months of purchase.
- Not have used the first-home benefit before (or sell your previous home within 12 months).
- Not own another property in the same municipality.
Important note: If you're an American citizen and transfer your residence, you won’t have to pay IMU (property tax), but you’ll become an Italian tax resident. This means you’ll need to pay taxes on your global income here in Italy. Becoming an Italian tax resident has significant implications for your tax obligations, so it's important to understand and plan for this change.
Dual citizenship: benefits and tax implications
Benefits of dual citizenship
Let me start by saying that I’m not an immigration expert, and I don’t sell services, but here’s what I do know... If you happen to have an Italian ancestor, you might be eligible for dual citizenship—and the perks are huge:
- 90, 89, 88, 87…: Got an Italian passport? Forget about counting down the days! The 90-day limit disappears, and you can stay in Italy as long as you want. But wait, it gets better...
- Spain, Greece, and 25 other countries: With that Italian passport, you’re free to roam not just Italy but all 27 EU countries. A whole new world of possibilities!
- European healthcare: If you get sick or need medical attention, you’ll have access to the European healthcare system, which is way more affordable than what you’re used to in the U.S.
- Zero student loans: Italians have never even heard of student loans! Education is nearly free, universities included. Plus, many offer programs in English, so your kids or grandkids can graduate debt-free. Sounds like a good start, doesn’t it?
- Easier mortgages: I’ll be honest—the Italian financial system isn’t exactly cutting-edge. It can take an Italian 2-3 months just to get a mortgage. For foreigners, it can be even trickier. But with dual citizenship, those doors open up a bit wider, even if it’s still nothing like the ease of getting a loan in the U.S.
- Low taxation for HNWIs: Italy now offers a flat tax of €200,000 per year for High Net Worth Individuals (HNWIs) who move their residency here. So, if your global income brings you a tax bill over €200,000, Italy might just be the perfect tax haven for you and your family.
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Taxation for dual citizens
Regarding taxes, you must first clarify residency, no matter how many passports you have. Taxes are paid in the country where you are considered a resident.
Suppose you spend over 50% of the year (183 days or more) in Italy. In that case, you automatically become a tax resident and must pay taxes in Italy. However, if you have one, two, or even three passports but remain a resident of the U.S., then you don’t have to pay taxes in Italy.
Important Reminder: If you register with the Italian registry (Anagrafe) to obtain Italian citizenship, remember to update your residence in the U.S. by registering with AIRE (Anagrafe Italiani Residenti all’Estero), so you remain a fiscal resident of the U.S.
Tax Scenarios:
- Resident in the U.S.: You must pay Italy’s property tax (IMU) and income tax (if you rent out your Italian property). Any taxes you pay in Italy can be reported on your American tax return, allowing you to deduct them and avoid double taxation on the rental income.
- Resident in Italy: You’ll pay all your taxes in Italy, which means both income generated in Italy and income from around the world (including the U.S.).
Buying property in Italy as a dual citizen
As I’ve mentioned, the benefits of buying property in Italy with dual citizenship are fantastic. You can stay in Italy for more than 90 days, travel freely across Europe without restrictions, and access a much more affordable healthcare and education system.
And let’s not forget—last but certainly not least—High Net Worth Individuals (HNWIs) can save a lot by transferring their residency to Italy, thanks to favorable tax options.
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FAQs for Americans buying real estate in Italy
Do I need to be a resident to buy property?
Absolutely not! You can live wherever you want. Just keep in mind that moving your residency to Italy means you’ll have to pay taxes there on your global income.
What are the property tax obligations?
If you own property in Italy, regardless of your nationality, you’ll need to pay property taxes like IMU (Municipal Property Tax) and TARI (Waste Tax). If you rent out your property, you’ll also be responsible for income taxes on the rental income.
Is it hard for an American to buy property in Italy?
It’s actually relatively easy for an American to buy property in Italy—as long as you understand the process. The only required document is the codice fiscale (Italian tax code), which you can obtain for free, instantly, at an Agenzia delle Entrate office.
How long can an American stay in Italy if they own property?
Owning property in Italy doesn’t extend your stay. You can stay up to 90 days. You’ll need a visa or Italian citizenship if you want to stay longer.
Should I move my residency?
No need! Americans can purchase real estate and other assets in Italy without needing to move their residency there.
Can a U.S. citizen buy a house in Italy?
Yes, U.S. citizens can absolutely buy houses in Italy.
Elena Manzhos: Mother of two beautiful children, wife, and real estate agent for over 15 years. Frankly, I don't know what is more complicated. More than 20 years ago, I moved to Italy from Eastern Europe, where I taught English. I have always had a deep-seated passion for houses; as a child for the Barbie house, and now as a real estate professional, my love for luxurious properties is unwavering.
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