Buying a second home or a vacation house in Italy

buy a property in Italy

Brick and mortar property management in Italy

Is investing in Italian real estate still worth it in 2023-2024? Buying a second home when having the specific goal to invest in the real estate market can be tricky. Brick and mortar is still an important safe-haven asset for those who have big fortunes to invest. 

ancient buildings Umbria property
Buy a house to renovate in an ancient borgo within the Marche region

One of the best solutions? Buying a house and then renting it or transforming it into a bed & breakfast. 

Renting your second home will create a passive revenue and in nearly a determined period, you will have amortized the initial expense. As an alternative, you could buy a property and divide it, turning one part into a guest house or a bed & breakfast and keeping for your vacations the rest of the building. 

Solutions don’t fall short for those who have entrepreneurship.

Can I buy a house in Italy if I am not a resident? 

Brick and mortar property management in Italy can be one of the most exciting activities you are going to run in 2023-2024. Why? The hidden real estate assets in the Belpaese are still many and, with the proper help, you can achieve a great deal. 

One of the main doubts concerning the possibility of buying a second home in Italy is about not being a resident. The law distinguishes four different situations for the purchase of property by foreigners in Italy: 

  • Foreigners with legitimate residency: along with their relatives and stateless people for less than three years. It’s requested a valid residence permit;
  • Foreigners who are not residents: an international deal is necessary to allow the purchase. Or, the condition of reciprocity must subsist, which means that Italian citizens are also authorized to buy a house in the country of the specific foreign citizen; 
  • Foreigners who can apply for the Golden Visa;
  • EU citizen, EFTA, or stateless person resident for more than three years: there are no limitations. 

After verifying the conditions that allow the foreign buyer to proceed, it’ll be required to understand which type of property they want to buy (whether it is a luxury property, an apartment, if they’re buying from the owner, etc.).

Can I buy a house without having to go to Italy physically? 

Is it possible to buy a second home in Italy without having to go there? The answer is yes. One can compensate for the absence of a foreign buyer by appointing a proxy, or a delegate document through which they transfer to another party the power to carry out a legal procedure or material on their account. Italians call this procedure ‘procura legale’, and it can be used for many reasons.

second home italy venice
Venice is one of the most appealing place to buy your second home in Italy

How much is the tax for a second home in Italy?

The purchase costs of a house depend on the type of property and the type of buyer. For instance, if you’re buying a property from the owner you will have to pay a 50 euro mortgage tax. While, if you’re buying directly from the developer, the same tax will be 200 euros. 

Property tax in Italy: IMU, Tasi, and Tari 

What is there to know about taxes on properties in Italy? 

In 2020, “super IMU” was introduced, which incorporated the municipal tax on properties (IMU) and the tax for indivisible services (TASI). In Italy, there also exists a third tax to pay after the purchase of the property, TARI, the tax on waste. 

What is IMU tax in Italy? 

The acronym IMU stands for Imposta Municipale Propria (municipal tax). The IMU property tax in Italy is a fee paid at the city’s level for owning a second home or a first home considered for its luxury level. 

IMU can be paid in two installments or in one solution. The amount is very variable, not only based on the city in which you own the property, but also on the type of property and location (whether it’s at the beach, mountain, lake, etc.). 

IMU tax in Italy: who pays it 

To be more precise, IMU is compulsory for: 

  • The owners of buildings, land, or buildable areas in general; 
  • Who owns the actual right of usufruct, residence, use, emphyteusis, and surface; 
  • After a legal separation or the termination of the civil effects of the marriage, the spouse recipient of the house will have to pay for the IMU (but only in the case of “luxury” properties); 
  • The authority in the case in which there are state concession areas; 
  • The lessee for the properties granted with a financial lease (also when they have to be built or with the construction in progress). 

The only properties for which it’s still required to pay the tax, hence the ones recognized as “luxury”, are A/1, A/8, and A/9 classes. 

IMU for the first home: what does it mean? 

The Italian term ‘prima casa’ can be literally translated into “first home”. It refers to the “main residency”, so the property “in which the owner regularly lives and resides according to public records”. This means that if lacking one of these two requirements, official residency or physical abode, the property is automatically considered as a second home, and due to that, subject to IMU property tax. 

Canals in Chioggia – Veneto, Italy

Which kind of tax is TASI? 

Tasi is now canceled, it was a tax that had to be paid to the Municipality and that was used to guarantee the coverage of the so-called “indivisible services”. Indivisible services were the services supplied by the Municipality and usually used by all citizens, for which it’s not possible to identify a specific utility. Some examples of indivisible services are public lightning, civil protection, street, and public green areas maintenance. 

The TASI abrogation doesn’t entail saving money for the taxpayer, but only a simplification of the tax-related system for what concerns local entities. 

What is the TARI tax? 

Tari (landfill) is the waste disposal tax that has as a prerequisite the ownership or the possession of whichever local or uncovered areas title, for any designated use, that can produce urban wastes. To determine the tax the walkable surface of the property unit with the ordinary destination is taken into account. 

In the end: is buying a second home in Italy a good investment? 

Yes, experts say it will be a deal at least for the next ten years.

If you need legal help in the process of purchasing a property in places like Tuscany (Lucca, Versilia, Pisa, Massa, Livorno), do not hesitate to contact our partner law firm.

Write us