Buying property in Italy as a foreigner. Everything you need to know

If you've ever wanted to experience the Italian lifestyle, whether as a digital nomad or someone looking for a new place to call a summer home, buying a property in Italy is truly exciting. With its historical heritage and architecture, Italy provides an irresistible backdrop for those who wish to invest in this country.

We'll guide you through the details you need to know if you're considering buying a property in Italy. We'll help you navigate the process of getting the most out of your property budget, including insights on how foreigners can obtain a mortgage in Italy. 

How easy is it to buy property in Italy in 2023 as a foreigner?

Buying a property in Italy as a foreigner is relatively easy because there are no restrictions on foreign ownership. 

However, it's important to note that the Italian authorities can conduct verifications, including criminal record checks and other aspects, as part of the purchasing process. 

Despite these necessary checks, foreigners still enjoy the same rights and opportunities as Italian citizens when acquiring real estate in Italy.

Can an American citizen buy property in Italy?

As an American citizen, you can buy property in Italy due to bilateral agreements between the two countries. 

These agreements, also known as reciprocal agreements, ensure that the same privileges granted to Italians buying property in the US are extended to US citizens when buying homes in Italy. This mutual understanding enables US citizens to enjoy the same rights and privileges as Italian citizens in property ownership.

Can a UK citizen buy property in Italy?

UK citizens can buy property or land in Italy, regardless of whether they reside there or not.

It may be necessary to provide documentation that confirms your rights under the UK's Withdrawal Agreement, such as an EU residency certificate (certificato di residenza), to ensure compliance with the required regulations.

How much does it cost to buy a property in Italy?

Property prices in Italy are heavily influenced by location. 

City centers typically command higher prices compared to areas outside the center. Major cities like Rome, Milan, and Florence are known for their higher price ranges. In contrast, smaller cities such as Bergamo and Genoa offer more affordable options. 

Where is the best place to buy a property in Italy?

When searching for the perfect getaway in Italy, it's important to find a balance between your budget, lifestyle, and desired location. 

Among the most popular cities, Rome and the picturesque landscapes of Tuscany stand out as favored choices for Brits and Americans. Milan, renowned as Italy's financial and fashion capital, has recently experienced a notable increase in real estate investment. 

In 2023, Sicily's popularity has risen as the filming location for the highly anticipated HBO series, White Lotus 2, further adding to Italy's allure as a diverse and captivating destination for property investment.

What’s the process of getting a mortgage in Italy as a foreigner? 

Finding the perfect property can be a challenging task. The good news is that foreigners can obtain a mortgage in Italy, which allows them to make the most of their property budget.

Getting a mortgage in Italy as a foreigner involves several steps:

1. Research lenders: Begin by identifying banks that offer mortgages to foreigners. 
2. Gather documents: Prepare the necessary documents, including proof of identity, proof of income, bank statements, employment details, and proof of residence in your home country. Some lenders may require additional documentation.
3. Pre-approval application: Submit a pre-approval application to your chosen lender. This involves providing your financial information and supporting documents. The lender will assess your eligibility and estimate of the loan amount you may qualify for.
4. Property valuation: If your pre-approval is successful, the lender will typically require a valuation. A professional appraiser will assess the market value of the property you intend to purchase.
5. Mortgage application and approval: Once you've found a property and agreed on the terms, you can proceed with the formal mortgage application. The lender will review your application, perform a credit check, and evaluate the property documentation. If approved, you will receive a mortgage offer.
6. Notary and legal procedures: Engage a notary to handle the legal aspects of the mortgage process. The notary will review the property documentation, ensure legal compliance, and oversee the signing of the mortgage contract.
7. Closing and disbursement: Once all the paperwork is completed, you will proceed to the closing process. This involves signing the mortgage contract and disbursing the funds.

Navigating the system in a new country can be challenging. However, there is good news. Homevest provides an excellent solution simplifying your cross-border house-buying journey through one convenient platform. 

With Homevest, you can streamline the process and make your international property purchase much more accessible and hassle-free.

What documents are required to get a mortgage in Italy as a foreigner?

When applying for a mortgage in Italy as a foreigner, you will typically be required to provide the following documents:

• Identity document: a valid passport or other government-issued identification document 
• Bank statements covering the last 12 months: these statements show your financial activity and help lenders assess your financial stability and ability to make mortgage payments
• Employment contract: a copy of your employment contract provides proof of your income and employment status
• Payslips for the last 3 months: recent payslips confirm your income and serve as additional evidence of your ability to meet mortgage obligations
• Proof of residency status: this document confirms your legal status in your home country
• Tax form for the last year: providing your tax form helps establish your financial standing and income level

It's important to note that specific requirements may vary depending on the lender and individual circumstances. 

For instance, if the applicant is a non-EU citizen, he will be required to present a valid residence permit. For EU citizens, the loan application process remains identical to that of Italian citizens.

What is a codice fiscale and how to get one for a mortgage in Italy

Having an Italian tax code or a codice fiscale is essential to get a mortgage in Italy. 

You can obtain your Italian codice fiscale at no cost by applying at any tax office (Agenzia delle Entrate) in Italy or at an Italian consular office or embassy in your home country.

Obtaining an Italian tax code is straightforward for EU citizens or countries within the Schengen area. You only need your passport and sometimes proof of address such as a bank statement or utility bill.

What are the best mortgages in Italy for foreigners?

Intesa Sanpaolo, UniCredit, and Banco PBM are among the lenders in Italy that provide mortgage options to foreigners.

Intesa Sanpaolo Mortgage

Intesa Sanpaolo is one of Italy's most competitive mortgage lenders, serving many non-resident applicants. If you want to move forward with Intesa Sanpaolo, you should know the variable rate is 1.45% + Euribor 1m, and the term range varies between 5 and 30 years. 

UniCredit Mortgage

UniCredit Bank accepts a wide range of currencies, including EUR, CZK, DKK, NOK, SEK, CHF, GBP, HUF, RON, BGN, ISK, JPY, and USD. The variable rate for a UniCredit mortgage is 1.38% + Euribor 3m, and the term range varies between 5 and 30 years. 

Banco PBM Mortgage

Banco PBM provides fixed-rate and variable-rate mortgages tailored to your specific situation. The variable rate for Banco PBM mortgage is 1.55% + Euribor 1m, and depending on the customer profile, you should know a 1000 EUR evaluation fee is applied to the principal. 

What options do you have to accelerate obtaining a mortgage directly from abroad?

Whether you live and work in the UK, Germany, or the United States, Homevest can be a reliable option that accelerates buying a property in Italy directly from abroad.

Homevest is a digital platform that simplifies applying for and receiving mortgage offers from local banks.

To get started on this journey, here's what you need to do:

#1. Visit homevest.io and create a free account

#2. Upload your documents and apply for credit pre-approval

The Homevest interface is intuitive and user-friendly. Before you can begin uploading documents, it's necessary to verify your phone number. This provides an additional layer of data security.

Once your phone number has been verified, you can begin uploading the required documents for bank pre-approval. These include:

• Your identification document
• Employment contract
• Bank statements from the past 12 months
• Payslips from the past 3 months
• Tax return from the most recent fiscal year
• Credit report

Depending on the requirements of your chosen creditor, you may also have the option to upload additional documents.

#3. Manage your mortgage file

After submitting your documents, banks interested in your application will contact you within a maximum of ten working days. They will provide details about the offers they have available.

From this point onwards, you can track the progress of your application and manage your file directly from your account.

What are the taxes for buying property in Italy as a foreigner?

As you set your budget for buying property in Italy as a foreigner, it's essential to keep in mind the various taxes and expenses that you may be required to pay. 

These additional costs should be taken into consideration to ensure a comprehensive financial plan:

When buying new properties in Italy, the tax system is different. 

Instead of registration tax, buyers are required to pay Value Added Tax (VAT). The VAT rate depends on the buyer's situation. For those purchasing their first home and intending to reside there, the VAT rate is 4%. 

Buyers of second homes or non-residents are charged a VAT rate of 10%. Luxury homes with an A1 rating in the Property Register have a higher VAT rate of 22%.

With Homevest by your side, buying a property in Italy becomes a simpler journey. Once you've considered your options and the budget, you're ready to embark on the la dolce vita experience.

Sources used and checked on July 2023:

1. Property prices in Venice, Italy
2. Property prices in Bologna, Italy
3. Property prices in Rome, Italy
4. Property prices in Florence, Italy
5. Property prices in Milan, Italy
6. Property prices in Naples, Italy
7. Property prices in Bergamo, Italy
8. Property prices in Genoa, Italy
9. Property prices in Turin, Italy
10. Transaction cost when buying property in Italy
11. Buying property in Italy as a UK citizen
12. Banco BPM Mortgage
13. Italian Tax Code

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.