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Purchase of a house in Italy

Published 2008.02.04

Italian legislation allows real estate to be purchased by foreigners according to the following conditions:

• Foreigners not legally residing in Italy: Only if allowed by an international treaty or if there is a reciprocal agreement, i.e. in their country of origin, it is permissible for an Italian to purchase a house.
• Foreigners “legally residing”, family members and stateless persons in Italy for at least three years: With stay permit for specific reasons or permanent stay permit.
• European community and EFTA citizens, stateless persons resident in Italy for more than three years: No restrictions.

It is necessary - in order to know what specific documents are necessary to obtain rights in Italy – to identify which category a foreigner belongs to.

Receipt of financial or tax benefits, such as in the case of a persons ‘first residential property’.
In order to simplify and encourage the purchase of a person’s first residential property, the Italian law decreases the taxes liable for those who make such a purchase. This is done in a number of ways. Specifically, at the time of purchase, the purchaser pays 3% (registry tax) if they buy from a private party, or 4% (VAT) if they buy from a business or company (with certain exceptions), plus mortgage tax and cadastral duties for a fixed amount (currently equal to a total of €336.00).

Foreigners are also allowed to take advantage of the ‘first residential property’ benefits if they meet the same requirements as those for Italian citizens.

Foreigners who are legally resident and who are registered in the unemployment office, or who are employed or self-employed, have the right to benefit, under conditions equal to those of Italian citizens, from council residential property and concessional credit loans for construction work, restoration work, purchase and rental if it is their ‘first residential property’.
Other tax relief related to the purchase of the ‘first residential property’ regards rebate (up to a certain amount) on income tax owing on the interest paid on mortgages raised for the purchase of a person’s first residential property.

Finally, revenue produced by a person’s ‘first residential property’ is not subject to income tax.

Documents necessary for foreigners:
Stay permit [permesso di soggiorno]
Foreigners from outside the European Union are considered to be legally resident when in possession of stay permits for:

• Work purposes:
  • Self-employed or employee
  • Single owner business (in actual fact, there is no self-employed form, as this falls within the category of residence for purposes of work).
• Family reasons, connected, however to stay permits for reasons indicated in letter a).
• If issued for other reasons, however, the stay permit does not give the foreigner the same rights as those of Italian citizens, unless there are reciprocal agreements.

Permanent stay permit [carta di soggiorno]
This is more advantageous than the stay permit because:

• It is valid for an undetermined time period, and therefore does not require renewal.
• It allows holders to carry out all legal activities, with the exception of those that the law expressly prohibits to foreigners or reserves exclusively for citizens.
• It allows access to public administration services and facilities.