Where foreigners buy property in Italy
Foreign buyers in Italy split roughly into two groups: people chasing a renovation project in the south (Puglia, Sicily, Abruzzo, Calabria) often at very low headline prices, and people buying a finished home in more established areas (Liguria, Tuscany, the lakes, Rome, Milan) at market rates. The tax rules are the same everywhere — what differs is regional annual property tax rates and how competitive the local resale market is.
There is no restriction on foreigners (EU or non-EU) buying property in Italy, though non-EU buyers from countries without a reciprocity agreement with Italy can occasionally hit friction — this is worth confirming with a notary before you make an offer.
Property taxes in Italy
For a resale property bought from a private individual, you pay a registration tax instead of VAT. If you register as a resident and make it your main home ("prima casa") within 18 months of purchase, the rate is 2% of the property's cadastral value — which is usually well below the market price, so the effective rate on the sale price is often lower still. If you don't (the common case for a foreign buyer keeping a second home), the rate is 9%, plus small fixed mortgage and cadastral taxes.
Buying new-build directly from a developer flips the mechanism: you pay VAT instead — 4% for a prima casa purchase, 10% otherwise — plus small fixed registration fees rather than percentage-based ones.
On top of the tax, budget for notary fees (Italian notaries are mandatory for any property transfer and their fees are regulated but scale with price, roughly 1–2.5%), and — if you don't speak Italian or don't know the area — independent legal and translation representation, which most foreign buyers use even though it isn't legally required. That's typically a flat service fee of roughly €1,000–€3,000 rather than a percentage of price, so it barely moves whether you're buying a €200,000 apartment or a €2 million villa. Agency commission, where one was involved, runs 3–5% in total — but who actually pays it varies: sometimes the buyer covers it in full plus VAT, often it's split between buyer and seller, so confirm this in writing with the specific agency before you assume either way.
Annual property taxes and ongoing costs
The annual municipal property tax (IMU) is waived entirely on a genuine primary residence (except for certain luxury cadastral categories), but applies at roughly 0.5–1.06% of cadastral value if the property is a second home — the exact rate is set by each comune, which is why the same-priced apartment in Milan and a village in Puglia can carry noticeably different annual bills. There's also a smaller flat waste-collection tax (TARI) that varies by municipality and property size.
Common mistakes foreign buyers make
The biggest surprise is usually the gap between cadastral value and market price — it means the percentage-based taxes are often cheaper than a buyer estimated from the sale price alone, but it also means two identically priced homes in different comuni can have very different actual registration tax. The second is timeline: a codice fiscale (Italian tax code) and an Italian bank account are needed before completion, and neither is instant to arrange from abroad.