Buying a Luxury Home in Italy: A Legal Guide for Foreign Buyers

By Georgia · Legal review by Giandomenico De Tullio · updated 11/11/2026

A lakeside villa, a Tuscan estate or a historic palazzo can look flawless in an agency brochure. The brochure will not mention that the pool was built without a permit, that the property is protected by heritage law, or that its land registry category carries a heavier tax bill than you expected.

Italian luxury homes are among the most desirable assets in Europe. They are also among the most legally complex. This guide explains the checks, taxes and risks that matter to foreign buyers, and how a preventative legal approach protects your investment before any money changes hands.

What is considered a luxury home in Italy?

A luxury home in Italy has two meanings. In the market, it means a prime location, exceptional finishes and exclusivity. In law, it means a property classified in cadastral categories A/1, A/8 or A/9. A separate set of criteria, laid down by a ministerial decree of 1969, still applies to the VAT rate when buying from a builder The legal label, not the brochure, determines the tax treatment.

Luxury in the market vs luxury in the land registry

Estate agents describe luxury by atmosphere: views, architecture, privacy. The Italian land registry (catasto) describes it by category:

• A/1: stately homes (abitazioni di tipo signorile).
• A/8: villas.
• A/9: castles and palaces of outstanding artistic or historical value.

Separately, the Ministerial Decree of 2 August 1969 sets objective criteria for a “luxury” dwelling, such as a usable floor area above 240 m²,  an extensive plot in proportion to the building, or amenities like a swimming pool larger than 80 m²  or tennis court. Today this definition matters only for VAT: it decides whether a purchase from a builder is taxed at 10% or 22%.

The two systems do not always agree. A home sold as a “villa” may be registered in an ordinary category, and a modest-looking house may be registered as A/8. A home can be bought at 10% VAT as a non-luxury dwelling under the 1969 decree and still be registered as A/8, with all the consequences for annual property tax.

Why the cadastral category matters before you make an offer

The category drives the tax position. It decides whether the reduced “main home” purchase tax is available and how annual property tax is applied. Bear in mind, however, that for most non-resident buyers the “main home” relief is out of reach whatever the category: it requires, among other conditions, that the buyer moves their residence to the municipality where the property is located within 18 months of the purchase, or works there.

Checking it takes a lawyer very little time. Discovering it after signing can change your tax costs for years. This is preventative law in its simplest form: verify the classification first, then negotiate.

Can foreigners buy luxury property in Italy?

Yes. Foreign nationals can buy luxury property in Italy. EU citizens face no restrictions, Other foreign nationals may buy subject to the condition of reciprocity, meaning that Italians must be able to buy property in their country. The condition is met for the United States and the United Kingdom, and it does not apply to non-EU nationals legally resident in Italy. Every buyer needs an Italian tax code (codice fiscale), and high-value purchases attract closer anti-money-laundering scrutiny.

“Yes” is only the start of the answer. Under Italian anti-money-laundering law, notaries, banks and estate agents must carry out customer due diligence, which for high-value or cross-border purchases typically includes verifying the source of funds and the payment trail must be fully documented. Payments are made through traceable means, usually bank transfers, and the price declared in the deed must be the price actually paid. The deed must also state the means of payment used and whether an estate agent was involved, together with the commission paid.

Buyers who prepare their documentation early move through these checks smoothly. Those who do not often face delays close to completion. Our guide to buying property in Italy as a foreigner covers the general requirements in more detail.

Some buyers also plan to relocate or become Italian tax resident. Residence permits and tax residency carry their own rules and deserve separate advice, but they should be considered before choosing how to hold the property. Italy’s optional regime for new residents, for example, replaces Italian income tax on foreign-source income with an annual flat tax, which is €300,000 (plus €50,000 for each family member included) for those moving to Italy from 1 January 2026.

Buying personally or through a company: legal and tax trade-offs

Many high-net-worth buyers ask whether to buy in their own name or through a company. There is no universal answer.

• Personal ownership: simpler and cheaper to administer. However, on death the Italian property is always within the scope of Italian inheritance tax, even if the owner was not resident in Italy, and mortgage and cadastral taxes are also due. Which succession law applies depends on the owner’s habitual residence and on any choice of law made in a will (see below).
• Company ownership: can offer flexibility in structuring and succession. It also brings accounting obligations, different tax treatment and transparency requirements on beneficial ownership. A company buyer cannot use the cadastral-value basis for registration tax, and private use of a company-owned home by its shareholders may be taxed as a benefit. Where a foreign vehicle is used (such as a US LLC), its Italian tax classification must be assessed case by case.

The wrong structure is difficult and expensive to undo after completion. The decision should be taken with legal and tax advice before the preliminary contract is signed.

Thinking of buying a luxury property in Italy? A short conversation at the start can prevent costly corrections later. Book a free consultation with De Tullio Law Firm to discuss your plans with an English-speaking Italian lawyer. You can also read our [free buying guide]([INSERT FREE GUIDE URL]).

What taxes apply to luxury homes in Italy?

Luxury homes lose the advantages usually given to a main residence. The reduced prima casa purchase tax is unavailable, so the 9% registration tax applies (or VAT, where the seller is a builder), and IMU is due even when the owner lives there. Add annual local taxes and, on resale, possible capital gains tax. A lawyer should check the category before the preliminary contract is signed.

This is where the tax treatment of luxury homes in Italy most often surprises buyers. Owners of A/1, A/8 and A/9 properties are excluded from the exemptions that benefit ordinary main homes.

Purchase taxes on a luxury or second home

The tax payable depends on who is selling and, in part, on who is buying.

• Buying from a private seller ( or from a company selling without VAT) : registration tax of 9%, (minimum €1,000). If you buy as an individual, not in the course of a business or profession, you can ask the notary to apply the tax to the cadastral value rather than the price (the “price-value” rule). This is a figure set by the land registry, usually well below market value. The actual price must still be declared accurately. Fixed-sum mortgage and cadastral taxes (euro 50 each) are added.
• Buying from a builder or renovation company: VAT is mandatory if the sale takes place within five years of completion of the construction or renovation works; after five years, the seller may choose to charge VAT, otherwise registration tax applies as above. Where VAT applies instead of registration tax the rate is 10%, or 22% for homes that are “luxury” under the 1969 decree (4% for a qualifying main home outside categories A/1, A/8 and A/9). . The fixed-sum registration, mortgage and cadastral taxes (€200 each)  also apply.

Because the 1969 decree and the cadastral categories do not always align, a purchase from a developer needs particular care. The VAT difference on a high-value property is significant.

Annual taxes: IMU and TARI

IMU (Imposta Municipale Unica) is the municipal property tax. On a second home or holiday home it is always due. Rates are set by each municipality within national limits: the standard rate is 0.86%, which municipalities may raise to 1.06% (in some cases up to 1.14%) or reduce. The rate applies to a taxable base derived from the cadastral income (revalued by 5% and multiplied by 160 for homes). Note that a non-resident owner cannot treat an Italian home as their main residence for IMU purposes, since this requires registered residence and habitual abode in the property.

For luxury categories, IMU is also due on a main residence, although a reduced rate of 0.5% (which the municipality may raise to 0.6% or reduce)  and a euro 200 deduction apply. Our article on IMU on second homes explains deadlines and calculations.

TARI is the municipal waste tax. It is usually modest relative to IMU but is payable on most properties, including those used only seasonally.

Capital gains when you sell

If you sell within five years of purchase, the gain is generally taxable in Italy; the seller can opt, through the notary, for a 26% substitute tax instead of ordinary income tax. Gains are excluded if the property was inherited or was the main residence of the seller or their family for most of the period of ownership. After five years, a sale is generally free of this tax, with one important exception: if works benefiting from the “Superbonus” were completed less than ten years before the sale, the gain may be taxable for up to ten years.

Foreign buyers should also consider how the sale is taxed in their home country, and whether a double tax treaty applies. Under Italy’s income tax treaties with the United States and the United Kingdom, gains on Italian real estate can be taxed in Italy, with relief to be sought in the country of residence (and, for US citizens, of citizenship). Planning the exit at the time of purchase is a hallmark of preventative advice.

Can you rent out a luxury home in Italy on Airbnb and similar platforms? (paragrafo aggiunto)

Yes, but short-term letting is regulated. Each property let for short stays must have a national identification code (CIN), which must be shown in every listing, and must meet safety requirements such as gas and carbon monoxide detectors and fire extinguishers. Rental income can be taxed under a flat-rate regime (cedolare secca) at 21% on one property and 26% on the others. From 2026, letting more than two properties on a short-term basis is presumed to be a business activity, with VAT registration and social security obligations.

Regional and municipal rules add further requirements, some cities restrict new short-term lets in their historic centres, and condominium regulations in apartment buildings may limit tourist use. If you plan to rent the property, these points should be checked before you buy, not after.

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How much are the closing costs on a luxury property in Italy?

Closing costs on a luxury Italian property depend mainly on three items: the purchase taxes (for an individual buying from a private seller, 9% of the cadastral value, often far lower than 9% of the price; VAT of 10% or 22% of the price if buying from a builder), the agency commission (commonly around 3% to 4% plus VAT for each party, where an agent is involved) and the notary’s and other professional fees. Budgeting early prevents unwelcome surprises at completion.

A realistic budget should include:

• Purchase taxes: registration tax or VAT, plus fixed mortgage and cadastral taxes.
• Notary fees: for the deed and its registration. By law, the buyer chooses and pays the notary.
• Agency commission: under Italian law the agent is entitled to a commission from each party, in the amount agreed or, failing that, set by local custom, plus 22% VAT.
• Legal fees: for due diligence and contract negotiation.
• Technical surveys: a surveyor’s report on structure, planning and cadastral compliance.
• Sworn translations and interpreting: where documents are not in Italian. If you do not speak Italian, the notary must use an interpreter and the deed can be drafted in two languages. If you cannot attend in person, a power of attorney signed abroad must be notarised and apostilled. A bilingual lawyer can help in both circumstances.
• Currency exchange: the cost of converting a large sum, which can be reduced by planning.

For a full overview, read our article on the hidden costs of buying property in Italy.

What legal checks should you make before buying an Italian villa or estate?

Before buying an Italian villa or estate, a buyer should commission legal due diligence covering the ownership chain, mortgages and charges, planning and cadastral compliance, servitudes and boundaries. This is separate from a technical survey. The notary does not inspect the property or act for the buyer, so the due diligence burden rests with the buyer.

A thorough review typically covers:

• Ownership chain: that the seller owns the property and can sell it, with a clear history of title. This includes checking any gift in the chain of title. Since a December 2025 reform, buyers of property that was previously gifted are much better protected against claims by the donor’s heirs, but transitional rules apply.
• Mortgages and charges: any registered burdens that must be cancelled at completion.
• Servitudes and boundaries: rights of way, access, water and utilities crossing the land, and whether the plot matches the registered boundaries.
• Planning and cadastral compliance: whether the building as it stands matches what was permitted and what is recorded.These are two separate checks: land registry plans do not prove that a building is lawful.
• Agricultural land: whether neighbouring or tenant farmers hold a statutory pre-emption right, and the urban-planning certificate (certificato di destinazione urbanistica) for the land.

It also includes confirming the habitability certificate (agibilità) now certified by a technician’s formal notice to the municipality) and the energy performance certificate (APE). Our guide to the legal steps to buy property in Italy outlines the full sequence.

Planning compliance and unauthorised building work

Italian planning law looks at the property’s “lawful status” (stato legittimo): the building as it stands must match the permits that authorised its construction and any later works. The 2024 “Salva-Casa” decree introduced construction tolerances and simpler regularisation routes for minor discrepancies, but only within strict limits. Separately, the deed must state that the cadastral data and plans match the actual state of the property. Differences are common in older and extended properties.

Unauthorised works can lead to fines, orders to restore the original state and, in serious cases, demolition. They can also block a future sale or mortgage. Some irregularities can be regularised, but others cannot, and the cost and outcome depend on the specific work and the local authority. In landscape-protected areas, regularisation after the event is generally ruled out where the works created new floor area or volume. 

Pools, outbuildings and extensions: the usual red flags

In our experience, certain features appear again and again in due diligence:

• Swimming pools built without permits or in protected landscape areas.
• Converted barns, annexes and guest houses not recorded in the land registry.
• Extensions and enclosed terraces that increase volume beyond the permitted limit.
• Agricultural buildings used as residences contrary to their registered use.

Case example (anonymised): A foreign buyer of a lakeside villa was preparing to pay the deposit when our review found that the swimming pool had no building permit. The property sat in a landscape-protected area, so regularisation was uncertain. The buyer renegotiated the price and made completion conditional on resolving the issue. Without that review, the problem would have passed to the buyer after purchase.

Why a notary is not a substitute for your own lawyer

In Italy, the notary is a neutral public official. The notary verifies the identity of the parties, checks title and the land and mortgage registers, ensures the deed complies with the law, drafts and registers the deed, and collects taxes. They must remain impartial: they owe both parties a duty to explain the legal effects of the deed, but do not negotiate the terms or protect one party’s commercial interests.

The notary does not inspect the property and does not review its planning history in depth. Independent legal due diligence is therefore a safeguard that the system does not provide automatically.

What should you know before buying a historic or protected property in Italy?

Protected properties are subject to heritage rules under Italy’s Cultural Heritage Code. The State, and in some cases the region or another local authority, holds a pre-emption right: it can buy the property at the same price and on the same terms within 60 days of receiving notice of the sale (180 days if notice is late, omitted or incomplete). Renovation also requires prior authorisation.

The most beautiful properties are often the most legally constrained. A historic villa or palazzo in Italy raises several points:

• Heritage declaration: a property owned by a private individual or company is protected only if a formal declaration of cultural interest has been issued and recorded. Buildings more than 70 years old by an author no longer living that are owned by the State, public bodies or non-profit organisations (including church bodies) are presumed protected until checked. Whether it is protected should be established before any offer.
• State pre-emption (prelazione): the deed is signed but has no effect until the pre-emption period expires: the sale must be notified within 30 days, the buyer cannot take possession in the meantime, and the State can step in and acquire the property instead of the buyer. The price is usually held in the notary’s escrow account until the position is clear.
• Renovation approvals: works require approval from the heritage authority (Soprintendenza). This affects timetables and budgets.
• Landscape and coastal constraints: lakeside and seafront villas are often subject to additional landscape protection, which limits extensions, pools and even changes to gardens. Landscape protection does not, however, give the State a right of pre-emption.

Case example (anonymised): A buyer planning a full restoration of a historic villa learned only after signing the preliminary contract that the property was protected and that a pre-emption notice was required. A suspensive condition in the contract protected the deposit while the authority’s position became clear. Without it, the buyer would have been bound to a purchase with an uncertain outcome.

Understanding these restrictions in Italy early allows you to price the risk, negotiate protections or walk away with your deposit intact.

What does the buying process look like for a high-value property?

A high-value purchase usually follows four stages: a negotiated offer, a deposit, the preliminary contract (compromesso) and the completion deed (rogito) before a notary. The preliminary contract is the stage at which a buyer is most protected or most exposed, because it fixes the terms that bind both parties.

1. Offer: a proposal at a stated price, usually with conditions. An offer (proposta d’acquisto) is normally irrevocable for a set period and, once accepted by the seller, may itself amount to a binding preliminary contract, so it should be reviewed before signing.
2. Deposit: a sum paid on signing the offer or preliminary contract, often as a confirmatory deposit (caparra confirmatoria). If the buyer defaults, the seller may withdraw from the contract and keep the deposit; if the seller defaults, the buyer may withdraw and claim double the deposit. Alternatively, the party not in default may seek enforcement or termination with full damages.
3. Preliminary contract (compromesso): a binding agreement setting the price, timetable, conditions and guarantees. It must be registered with the tax office within 20 days. For high-value purchases, it can be signed before a notary and recorded in the land registers (trascrizione), which protects the buyer against later sales, mortgages or attachments by the seller’s creditors.
4. Completion deed (rogito): signed before the notary, who registers the transfer. The balance is paid and ownership passes. The balance can be held in the notary’s escrow account until the transfer has been recorded free of adverse entries.

Agency standard forms are rarely tailored to luxury transactions. They often omit the clauses a high-value buyer needs.

Negotiating conditions and suspensive clauses into the preliminary contract

A suspensive clause (condizione sospensiva) makes the contract depend on a future event. Useful examples include:

• Non-exercise of any heritage pre-emption right, backed by the seller’s warranty on whether the property is subject to a heritage declaration.
• Regularisation of planning or cadastral discrepancies before completion.
• Cancellation of mortgages and charges.
• Receipt of specific permits for planned renovations.
• Waiver or non-exercise of agricultural pre-emption rights, where farmland is included. 

It is far easier to negotiate these protections before signing than to seek remedies afterwards. An English-speaking Italian property lawyer can draft and negotiate the contract in your language and in your interest.

Where are the best areas to buy luxury homes in Italy, and are there legal differences?

The best areas depend on lifestyle, but the legal framework is the same nationwide, with local variations. Lake Como, Tuscany, Liguria, the Amalfi Coast, Milan, Rome, Sicily and Puglia each add a distinct layer of landscape, coastal or heritage rules that a buyer should understand before making an offer.

We do not list properties. The legal angle for each area is:

• Lake Como: strict landscape protection along the shores, which affects pools, docks and extensions.. The lakeshore is often state-owned, so docks and moorings usually require a public concession.
• Tuscany: rural buildings and agricultural land, where permitted use and conversion rules matter, and where neighbouring farmers may hold pre-emption rights over the land.
• Liguria: coastal boundaries and public maritime property near the shoreline, and steep terrain with planning constraints.
• Amalfi Coast: exceptionally restrictive planning and landscape protection, where irregularities are hard to regularise.
• Milan: apartments and historic buildings, where condominium rules and building regulations take priority.
• Rome: a dense concentration of protected buildings, so heritage checks are essential.
• Sicily: as a region with special autonomy, it has its own regional heritage authorities and regional rules that can differ from national practice.
• Puglia: historic farmhouses (masserie) and trulli, where rural classification and landscape rules apply.

Practice varies between municipalities. Local verification is part of proper due diligence.

How do you protect your Italian luxury home for the next generation?

Italian law reserves a share of the estate to the spouse or civil partner, the children and, if there are no children, the parents (forced heirship). A will or gift that infringes these shares is not void, but the reserved heirs can have it reduced. Under EU Regulation 650/2012, succession is governed by the law of the owner’s last habitual residence, unless they have chosen the law of their nationality in a will, an option also available to US and UK nationals. Planning should be done while the owner is alive.

Without planning, a luxury property can create difficulties for heirs. Co-ownership between several family members can lead to disputes, and a high-value asset may be difficult to divide or sell.

Key points include:

• Forced heirship: the “reserved” share (quota di legittima) belongs to the spouse or civil partner and children and, if there are no children, the parents, whatever the will says.They can claim it through an action for reduction (azione di riduzione). 
• The role of a will: a properly drafted will, recognised in Italy, simplifies administration and clarifies how the available share is distributed.
• Choice of law: a person may choose the law of their nationality to govern succession, but the choice must be made in a will or similar disposition, either expressly or clearly implied by its terms. US nationals should identify the law of a specific state.
• Inheritance tax: rates depend on the relationship between the deceased and the heir: 4% for a spouse and direct relatives on the value exceeding €1 million for each heir; 6% for siblings above €100,000 and for other close relatives; 8% for others. For real estate, the tax office cannot challenge a declared value that is not lower than the cadastral value, which is why the cadastral value is normally used. Mortgage and cadastral taxes (3% in total) are also due on inherited real estate. 
• Gifts and structures: lifetime transfers and holding structures have tax and legal consequences and should be reviewed before use.

As lawyers whose practice focuses on succession matters, we advise both owners planning ahead and heirs who have already inherited. Early planning keeps the property in the family on the owner’s terms.

Why use an English-speaking Italian property lawyer for a luxury purchase?

An English-speaking Italian property lawyer acts for the buyer alone, reviews the property and contracts before any money is committed, and explains Italian law in the buyer’s own language. For a luxury purchase, that independent advice is the most effective way to prevent costly problems.

The advantages are practical:

• Independence: the estate agen generally fulfills a dual role, is paid by both parties and has an interest in the deal closing, and the notary must remain impartial, while your lawyer acts only for you.
• Early detection: problems are identified before the deposit is paid, when they can be negotiated or avoided.
• Bilingual contracts: you understand what you sign, and the terms are drafted for your situation.
• Coordination: one adviser links the notary, surveyor, tax adviser and bank.

Preventative legal advice costs a fraction of the value at stake, and the cost of correcting a mistake after completion is usually many times greater.

Ready to buy with confidence? Book a free consultation with De Tullio Law Firm and speak with an Italian luxury real estate lawyer about your purchase. You can also download our free guides to buying property in Italy.

This article provides general information on Italian law as at [date] and does not constitute legal or tax advice. Rules change frequently: please seek advice on your specific situation