A Guide to Buying a Property in Italy





Italy is widely recognised for its abundance of cultural beauty and its remarkable geographical diversity, with which comes a rich and dynamic property market. The Italy Luxury Real Estate Market is competitive, with the presence of local and international players, and can be defined as being a consolidated market. The growing presence of international funds and foreign capital is increasingly attracting new investors. Thus, the acquisition of property in Italy, whether motivated by reasons of leisure or business, is a lifelong dream for many across the world.

Whilst the notorious intricacies of Italian bureaucracy and the complexities of its legal and taxation systems may be uninviting, the reality is that buying property in Italy can be a quick and easy process, when guided by experienced legal advisors and trustworthy professionals.

Indeed, whatever the nature of the property purchase, it is highly advisable to seek specialized legal assistance to lead you through the stages of acquisition and to familiarise you with any foreign practices customary to the Italian system. It is equally important to seek qualified fiscal counsel, to maximize any tax benefits, and to cut potential tax burdens.

This brief article will give a preliminary overview of the main stages involved in the process of purchasing property in Italy, namely the irrevocable purchase offer ‘proposta irrevocabile d’acquisto’, the preliminary contract of sale and purchase ‘contratto Preliminare di compravendita’ and the deed of sale and purchase ‘contratto di compravendita’, and will address the fundamental questions that most frequently arise at each respective stage.



Before entering into any contractual agreements, and in order to avoid delays in the purchasing process, the buyer should take the following steps:

  • Open an Italian bank account: this may be used to pay for transaction costs and for the payment of the purchase price, as well as to manage expenses after the sale. Usually, notaries may insist on having the payment made through an Italian bank;
  • Obtain an Italian tax code: this personal identification code is issued by the Italian Revenue Office “Agenzia della Entrate”. The Italian Tax Code is required to open an Italian bank account as well as to execute any deed of purchase, sale of immovable property or registered movable goods. Having an Italian Tax Code does not entail any tax implications as it is simply an identification code.
  • Issue a Power of Attorney in favour of a local attorney, which can be granted for purchasing or selling Italian properties and carrying out the relevant procedural steps. The Power of Attorney may be signed in the client’s home country or wherever the client is located;
  • Conduct a due diligence of the property: before entering into an agreement for the purchase of a real estate, it is always advisable to conduct a due diligence on said property, to verify the title of ownership of the seller, as well as the compliance of the property with all local laws and regulations. It is also important to ascertain whether the property is free from any rights (such as pre-emption) and encumbrance.



  • The acquisition process usually begins with the purchaser’s submission of an ‘irrevocable purchase offer’, which is an offer indicating the price offered for the property. It generally includes a deposit (approximately 5 % of the property value) and a set deadline for the seller’s acceptance. The offer must contain all essential points, and it is often used to take the property off of the market while in-depth due diligence are performed. If the purchase fails due to any of the property’s legal shortfalls (lack of documentation, lack of compliance with urban prescriptions), the deposit is refunded.
  • The irrevocable offer binds the buyer to purchase the property for its period of validity, but it does not bind the seller until the moment of the latter’s formal acceptation.
  • The irrevocable offer is not mandatory as the parties may decide to directly execute the preliminary contract or even the deed of sale (however sellers will usually require at least a preliminary contract with a deposit before entering into the final deed of sale).



  • Once the seller has accepted the offer or an agreement has been reached, the parties usually enter into a preliminary contract, or Compromesso’ or ‘Contratto Preliminare di Compravendita’;
  • The preliminary contract sets out the details of the sale, defines the selling conditions (e.g. description of property, sale price, payments, timing, etc), and contains the seller’s and buyer’s unconditional commitment to respectively sell and buy the property on or before the agreed closing date.
  • By accepting this preliminary contract, both parties demonstrate their commitment to conclude the deal;
  • The “Caparra confirmatoria”/Deposit is paid upon the signing of the Preliminary Contract, and is usually between 10% and 30% of the property purchase price. The balance shall be paid upon the execution of the deed of sale.
  • It is customary to register the preliminary contract in the Italian real estate register as a precautionary measure. This prevents the same property from being sold to a third-party buyer during the period between the date of the preliminary contract and the date of the deed of sale.


If necessary, is it possible to hold the deposit in escrow?

It is advisable for the buyer to have the deposit paid to the notary or to another escrow agent (lawyers), who hold the money in escrow and release it to the seller upon the execution of the deed of sale.

What if the buyer does not complete the purchase of the property?

The seller may retain the deposit and in certain cases also seek legal action to enforce the purchase and/or to claim for additional damages.

Conversely, what if the seller abandons the transaction or fails to comply with the requirements of the preliminary contract?

  • The vendor is liable to pay double the deposit that was paid by the buyer if the deposit is qualified as Caparra Confirmatoria;
  • The buyer may in any case claim compensation for any damages caused by the seller’s default.

What if the seller enters into more than one preliminary contract for the sale of the same property?

In this case, the party that first recorded its agreement in the real estate register should prevail over any other potential buyers.

Aside from the downpayment, are there any other costs to be paid at this point in the process?

  • As a general rule, agency fees are due at the singing of the preliminary contract, unless otherwise agreed with the agent. If the parties do not execute a preliminary contract, the commissions will be paid at closing.



  • The deed of sale and purchase of a real estate in Italy must be executed before an Italian Notary. The Notary is an officer of the Italian State who registers the transactions and ensures that they comply with the relevant laws and regulations.
  • Prior to executing the deed of sale, the notary will perform due diligence checks to verify that the seller has full and valid title to the property, and that the sale can be lawfully performed.
  • Subsequently, the final contract/deed of sale is signed before the Notary;
  • The execution of the deed of sale is sufficient to cause the transfer of the ownership title from the seller to the buyer. However, for the sale to have a binding effect on third parties, the deed must be recorded in the local register of real estate. The notary records the transfer. Once the deed is executed and properly recorded, the validity of the ownership title may not be challenged by any third parties.

The buyer may also consider granting a mortgage over the property as a guarantee to finance the purchase.



In Italy as in most countries, real estate is subject to taxation requirements that are under constant evolution. Such real estate taxation can essentially be divided into two categories: 1) taxes on the transfer of property (ie., registration, mortgage, cadastral and/or VAT) and 2) ownership taxes (e.g.  IMU, IRPEF and IRES).

Below is a break-down of these two different taxation categories, taking into account the nature of the property, the seller, as well as the conditions of purchase.


The nature of the seller will determine the type of tax (as a general rule registration tax applies if the seller is an individual and VAT if the seller is the building company, yet this general rule may be subject to certain exceptions), while the applicable tax rate will depend on the characteristics of the property at stake (commercial, luxury, residential, etc.). The purchase of real estate is subject to the payment of registration tax, VAT, if any, mortgage and cadastral taxes.


Registration tax ·         If the seller is an individual and the property is a residential building or apartment: 9% of the cadastral value (which usually is lower than the purchase price) multiplied by a fixed index with a minimum amount of eur 1.000,00.

·         If the seller is an individual and the property is a land or a property other than those intended for residential purposes (luxury, commercial, agricultural) the above rate may vary.

·         First Home “Prima Casa”[1]: 2% of the cadastral value (which usually is lower than the purchase price) with a minimum amount of eur 1.000,00

·         If the seller is the building company and the transactions subject to VAT: flat rate eur 200,00.


Paid to the notary at closing
VAT ·         Applicable only if the property is purchased directly from the building company: 10% of the purchase price

·         Luxury homes, commercial or industrial property: 22% of the purchase price

·          Prima Casa: 4%  of the purchase price

Paid directly to the seller at closing.
Cadastral tax (imposta catastale)




 Mortgage tax (imposta ipotecaria)



·         Transactions subject to VAT: flat rate of eur 400,00

·         Otherwise: flat rate of eur 100,00

Paid to the notary at closing



For taxes on real estate:

IMU (municipal tax) (Imposta Municipale Unica)
  • The tax base is determined on the cadastral income revalued at a rate that may vary in line with the nature of the property (first home – commercial, etc.) The tax rate is set by each municipality and can vary between 0,86% and 1,06%.
Due yearly
IRPEF (Personal Income Taxation) (Imposta sul Reddito delle Persone Fisiche)


IRES/IRAP (Corporate Income Taxes) (Imposta sul Reddito delle Società)

  •  Depending on whether the owner is an individual or a company, IRPEF and IRES shall respectively apply.


·         Income from the rental of a property is subject to a progressive tax rate (minimum 23%, maximum 43%). The applicable rate is determined on the basis of the individual’s yearly total taxable income (for IRPEF purposes). Under certain conditions, the tax rate may be a fixed 21% (“cedolare secca”).

·         The applicable rate is determined on the basis of the individual’s yearly income.

·         In the case of sale of a real estate property, it may be requested to the notary at the time of the transfer to apply a substitute income tax of 26% for capital gains realised on the sale if the property is purchased, constructed or received as a donation no more than five years ago. In the latter case, the five-year period runs from the date of purchase by the donor. If, instead, more than five years have passed, capital gains are not taxed.


·         Conversely, if property is owned by a company, both income from leases and from the sale of real estate contribute to forming the IRES/IRAP tax base (tax rate 27,9%)


Due yearly


NB: Whilst the acquisition of commercial property through a company is often the correct choice, buying residential property through an Italian or foreign company does not exclude or limit per se the application of Italian taxes. In fact, the Italian tax authorities may not recognize the company as the actual owner of the property and, in the case of a tax assessment, the beneficial owner or shareholder of the company that owns the property may be liable for the payment of taxes. In addition, from 1stJanuary 2023, taxation applies to gains derived from the sale of a foreign company owning (directly or indirectly) Italian real estate, or from the sale of a foreign entity owning (directly or indirectly) a participation in an Italian company with local immovable assets. Therefore, the capital gains realised by non-residents that derive from the above disposal, are subject to taxation in Italy if the value of such participation is represented (directly or indirectly) for more than 50% by real estate located in Italy. For the purposes of this calculation, the following properties should be excluded: immovable real estate for the production or exchange of goods (“commodity real estate”), properties used directly in the exercise of the business activity (“instrumental real estate’).



For most, buying a property in Italy is not just a mere legal and financial transaction, but a highly emotional investment and the fulfilment of a lifelong dream. Whilst there are certainly practical hurdles to jump, this guide has demonstrated that, when assisted by the right professionals, the formal practicalities of such a dream are in reality far less convoluted than commonly held to be.

Whether you are seeking to buy property in Italy or are in search of legal advice regarding Italian real estate, PG Legal offers qualified legal assistance throughout the entire property purchase process, providing a wealth of services that include the drafting and reviewing of sales and preliminary contracts, and the reviewing of property charges, building permits, and pre-emption rights.

Moreover, PG Legal works closely with a network of experienced tax consultants that can structure your transaction with a view to maximizing the fiscal benefits of your investment in Italy.

What is more, our assistance extends beyond the closing of the property purchase. We offer post-closing consultancy services to ensure legal and regulatory compliance with real estate laws, to communicate updates on the most recent developments in Italian property laws, and to provide our clients with fiscal insights that optimize their investments.

[1] What defines a ‘PRIMA CASA’?

  • To qualify as a ‘prima casa’, the property must be the buyer’s primary place of residence.
  • Companies are not entitled to the “prima casa” tax regime.
  • The buyer must therefore hold Italian residency, and the property must be located in the municipality in which the buyer is resident, or in which it undertakes to establish is permanent address within the 18 months that follow the purchase.
  • Since such a choice could affect the individual’s overall fiscal regime, a detailed professional assessment of fiscal implications is highly recommendable.


PG Legal is a law firm truly specialized in Luxury Assets. More than 20 years of experience with luxury assets such as Top Fashion Brands, Art, Superyachts, Private Jets and Luxury Property, make us a top tier firm chosen by international UHNWIs, fashion brands, intermediaries, designers, architects, brokers and family offices. Our Luxury Assets Team has a deep knowledge of the legal, tax and business aspects required when dealing with unique luxury goods and with the exclusive people who are involved in this very special sector. PG Legal Luxury Assets Team assists its top clients in Italy and internationally and for this it has established a network of trusted law firms of top reputation specializing in luxury assets based in the main luxury hubs such as Monaco, London, Geneva, Paris, Miami, Fort Lauderdale, Palm Beach and Dubai.

For more on this, please feel free to contact:

Avv. Gianfranco Puopolo

Partner & Head of Luxury Assets Team

E: g.puopolo@pglegal.it


Avv. Lorenzo Ranieri


E: ranieri@pglegal.it



Avv. Lucilla Margherita

Of Counsel

E: margherita@pglegal.it



Dott. Domenico Rinaldi

Tax Consultant

E: d.rinaldi@pglegal.it



Avv. Sara Yazdani

Senior Associate

E: yazdani@pglegal.it



Dott.ssa Gaia Parisi

Junior Associate

E: parisi@pglegal.it


PG Legal Luxury Assets Team is based in:


3 Via Sant’Andrea

20121 Milan

T: +39027601339


14 Via Ombrone

00198 Rome

T: +39068841535

Also in Genoa, Naples and Dublin


For more information about the Luxury Assets Team: