This article will discuss Italian citizenship in relation to purchasing a property in Italy, and will outline some of the advantages and benefits that Italian citizenship brings when buying property in Italy. While it is true that you do not need to be an Italian citizen to be able to buy property in Italy, we will address how being an Italian citizen does remove certain complications that non-Italian citizens may encounter when purchasing a property in Italy.
Who can buy property in Italy?
Foreign citizens who do not reside in Italy can buy property in the country under the condition that their home country has a reciprocity agreement with Italy. Under this principle, a non-Italian resident foreign citizen can purchase property in Italy as long as their home country allows Italian citizens to do the same. Many countries, including the United States, have reciprocity treaties with Italy, enabling U.S. citizens to buy property in Italy without needing to establish residency. If your country does not have such an agreement with Italy, as is the case with Australia, for instance, you would typically need a residency permit to purchase property. To obtain this, a foreign citizen must first secure a long-term visa, which can be a lengthy and sometimes challenging process. It is also important to be reminded that owning a house does not mean that you are automatically entitled to residency in Italy.
With this considered, one obvious advantage of having Italian dual citizenship removes any obligation to obtain a visa or residency permit, which makes the process of buying a property in Italy much more straightforward.
If you are a EU citizen, you can purchase property in Italy without the need to establish residency.
Limits of buying property as a non-resident
If you are not an Italian or EU citizen and do not have a long-term visa, you will only be able to stay in Italy for 90 days, and visa requirements for the standard tourist visa will apply. This means that traveling to Italy to buy a home as a non-Italian citizen would impose time limitations and restrictions. Italian citizenship removes these restrictions.
Advantages of Buying Property as an Italian Citizen
Holding Italian citizenship offers several advantages when purchasing property. As mentioned earlier, Italian citizens can easily register as residents in the home they buy. This opens up eligibility for the “first home” tax benefit, which provides a significant discount on property registration taxes for primary residences in Italy. Additionally, once registered as a resident, you can open a standard Italian bank account. These accounts often offer more favorable terms compared to accounts for non-residents, helping you avoid currency conversion and transaction fees on international transfers—though having an Italian bank account is not a requirement to buy a home. Moreover, residency registration grants you access to Italy’s national health care system, allowing you to receive free or low-cost medical care.
“First Home” Incentives for Italian Residents and Non-Resident Italian Citizens
When purchasing a property, the registration tax (Imposta di Registro) is calculated as 2% of the cadastral value if the home is your primary residence, or 9% if it is a secondary property, such as a vacation or investment home. If you are buying from a private individual (rather than a company), no VAT (Value Added Tax) is applied. However, VAT is charged at 4% for primary residences and up to 10% for secondary homes purchased from a registered company (such as a contractor).
If you are an Italian citizen registered with A.I.R.E. (residing outside of Italy), you may also be eligible for certain tax benefits. Specifically, you can access the First Home tax reduction benefit if:
- You have lived in Italy for at least five consecutive years and are currently abroad for work.
- The property you plan to purchase is located in your municipality of birth or the municipality where you previously resided.
If you meet the requirements for the “first home benefit”, you will also be exempt from paying the annual municipal tax (IMU, or Imposta Municipale Unica).
What Taxes Do I Pay in Connection with Purchasing Property in Italy?
In addition to the property registration tax (Imposta di Registro) and the annual municipal property taxes (IMU), all Italian home owners, whether primary residents or not, must pay an annual waste collection tax, known as TARI. The TARI, like the IMU, will vary depending on the municipality.
Instead, regarding personal income taxes, it is important to keep in mind that Italy taxes individuals who are permanent residents or who spend more than 183 days a year in the country. If you purchase property in Italy as a non-resident, you are not required to file a tax return with the Italian authorities. In this case, your tax obligations are generally limited to property taxes on your real estate assets in Italy.
Other Costs to Consider When Purchasing Property in Italy
In Italy, all property purchase transactions are overseen by a notary public (notaio), a legal expert and important public official. The notary’s role includes drafting the final sale contract, calculating taxes, and registering the property in the buyer’s name, ensuring that all aspects of the sale comply with legal requirements. Notary fees can vary based on the complexity of the transaction and the specific notary involved. Additionally, if you are working with a real estate agent, expect to pay a commission, typically between 3% and 5% of the purchase price, depending on the agency, property value, and location. Both the notary’s fees and the real estate agent’s commission are subject to VAT (Value Added Tax). The standard VAT rate in Italy is 22%, and it applies to all goods and services involved in the transaction.
What personal documents are needed to purchase a property?
The documents needed to purchase property in Italy include a tax code (codice fiscale), which is an identification number used by Italian government authorities, including the Tax Revenue Agency. It can be thought of as similar to a social security number in the U.S., and is required for many financial processes, such as opening a bank account and signing any kind of financial agreement, which includes the final contract of sale (atto di compravendita) to close on a property.
If you applied for the recognition of Italian citizenship in Italy via jure sanguinis, you would have been registered in the registry office in the Italian municipality (anagrafe), and therefore would already have been assigned tax code. Beyond the tax code, you will need to present a valid ID (passport or Italian carta di identitá) as well as a document that attests to your primary residential address (such as a driver’s license).
Conclusion
To summarize, this segment has outlined that while it is not mandatory to be an Italian citizen in order to be able to purchase property in Italy, being an Italian citizen does have its advantages, such as making the process of establishing residency more straightforward, allowing you to buy property without visa and time restrictions, and in some cases enabling you to pay fewer taxes.
If you have any further questions about buying property in Italy, or becoming an Italian citizen, you can contact us directly and one of our expert advisors will be in touch to answer your queries.
