Italy Real Estate Demand: How Flat Tax and Low Inheritance Taxes Attract Foreign Buyers
- Luigi Zoppi
- Aug 23
- 2 min read
Italy Real Estate Demand: How Flat Tax and Low Inheritance Taxes Attract Foreign Buyers
In recent years, Italy has become an increasingly attractive destination for foreign individuals and families looking to relocate, invest, or retire. This surge of interest isn’t just due to Italy’s charm, lifestyle, and culture—it’s also a direct result of favourable tax incentives and a unique inheritance regime that set the country apart from many others in Europe.
The Flat Tax Advantage
Italy introduced a special flat tax regime designed to attract high-net-worth individuals. Under this system, new residents can opt to pay a flat €200,000 annual tax on foreign income, regardless of the amount earned abroad. This regime is particularly appealing to entrepreneurs, investors, and retirees who generate income outside Italy but wish to enjoy the benefits of living in the country. For family members, the tax can be extended for an additional €25,000 per year.
This initiative has already attracted international businesspeople, celebrities, and high-profile families seeking both financial efficiency and the Italian lifestyle. As more foreign nationals take advantage of this system, their presence is being felt in the property market.
Low Inheritance and Gift Taxes
Alongside the flat tax, Italy also offers one of the lowest inheritance and gift tax regimes in Europe. In most cases, transfers to direct descendants (children, grandchildren) and spouses are taxed at just 4%, with significant exemptions up to €1 million per heir. Transfers to siblings are taxed at 6%, while more distant relatives and unrelated individuals face slightly higher rates. Compared to countries like France or Spain, where rates can be substantially higher, Italy’s system is extremely favourable. This makes it an ideal jurisdiction for wealth transfer planning, enticing many families to settle in Italy not just for their current lifestyle but also for future generations.
Impact on Italy Real Estate Demand
These financial incentives have a direct impact on Italy real estate demand. International buyers are increasingly active in key Italian markets:
Milan and Rome: Popular among business professionals and international investors.
Tuscany, Umbria, and Lake Como: Favored by retirees and lifestyle seekers.
Liguria: Growing demand from foreigners who love its Riviera charm, coastal properties, and proximity to both the sea and the Alps.
Southern Italy and coastal regions: Emerging hotspots where property values are still relatively affordable compared to northern cities.
Demand from foreign buyers is pushing interest in both luxury properties and charming countryside estates. This influx has stimulated local economies, increased property values in certain regions, and encouraged new development projects catering to international tastes.
Looking Ahead
As long as Italy maintains its favourable tax regime and inheritance advantages, the trend of foreign relocation and investment will likely continue. Combined with Italy’s timeless appeal—its art, cuisine, landscapes, and lifestyle—these financial benefits create a powerful incentive for international buyers to establish roots in the country.
For those considering real estate in Italy, now is a strategic time to enter the market. With growing demand from abroad, properties in sought-after locations are becoming increasingly competitive.
At Zop Properties, we specialise in guiding international clients through the Italian property market. Whatever property you’re looking for, our team is here to make your transition seamless.
