A New Era for Italian Real Estate: A 2026 Strategic Overview for International Investors

The landscape of real estate investment in Italy is undergoing a phase of profound regulatory transformation, marked by a shift from a system of static protections to a dynamic model oriented toward the certainty of asset circulation.

The Italian market, traditionally perceived as a territory of complex civil bureaucracy, is redefining its boundaries through the 2025 Simplification Decree (Decreto Semplificazioni 2025), which removed historical obstacles related to donative origin, and a new fiscal architecture that penalizes short-term speculation linked to building bonuses, prioritizing stability and residency instead.

The Foundation of the Civil Law System

The Italian legal system is based on a civil law structure where legal certainty is guaranteed by the Latin notary system. Unlike common law systems, where the transfer of property is often mediated by title insurance and private contracts between lawyers, the fulcrum of the transaction in Italy is the public deed (Atto Pubblico) or the authenticated private agreement. The notary, as a public official, performs a preventive legality control that has no equivalent in other systems.

However, a common perception must be corrected: the role of the notary does not exhaust the need for technical defense of the parties. While the notary is impartial, recent case law, culminating in the Corte di Cassazione (Italian Supreme Court) ordinanza No. 33439/2022, has established that notarial performance cannot be limited to the mere documentation of the parties’ will but must extend to a qualified duty of advice and information.

That implies that the notary must investigate the parties’ will and discourage operations that, while formally valid, are detrimental to one of the parties or unsuitable for achieving the practical result pursued.

Despite this evolution of notarial liability, international investors must understand that the notary does not judge the economic convenience of the deal.

Therefore, engaging a specialized lawyer remains fundamental for negotiating specific contractual clauses and conducting independent due diligence that goes beyond formal legality control. 

The Donation Revolution: The 2025 Simplification Decree

Until 2025, purchasing a property that had been the subject of a donation in the past represented a significant risk for the buyer and an almost insurmountable obstacle to obtaining a bank mortgage. The reason lay in the action of restitution (Art. 563 of the Italian Civil Code), which allowed the forced heirs (legittimari) of the donor to recover the asset from the third-party purchaser if the donee’s estate was insufficient to satisfy their reserved share.

The 2025 Simplification Decree (D.L. No. 1184, definitively approved in October 2025 and in force since December 18, 2025) introduced a reform defined as “epochal” by the National Council of Notaries.

The central innovation consists of the elimination of the possibility for forced heirs to act against third-party purchasers for value for the restitution of the property. The protection of forced heirs has been transformed from “real” (on the asset) to “mandatory” (of credit): the aggrieved heir can now act only against the donee to obtain the economic value of their share but can no longer seize the property from the new owner who purchased in good faith.

This modification has removed the circulatory instability that weighed on approximately 270,000 gratuitous acts performed annually in Italy. From December 18, 2025, a donated property is considered “bankable” just like one purchased through ordinary sale, eliminating the need for expensive donation insurance policies that had characterized the last decade.

It is, however, fundamental to note that a six-month safeguard clause exists: for successions opened before the law came into force or for donations already stipulated, the old regime continues to apply only if the forced heirs have notified and transcribed an out-of-court act of opposition within six months of entry into force (i.e., by June 2026).

Technical Due Diligence and Urban Compliance: The New Standards

In Italy urban and cadastral regularity represents the primary source of post-sale litigation. The principle of “objective compliance” prevails: the property must correspond exactly to the building titles filed with the Municipality and the plans in the Land Registry (Catasto).

The Land Registry is Not Probative

A frequent error of foreign investors is believing that the cadastral search proves the property’s building regularity. The Catasto is an office with purely fiscal purposes; the urban “truth” resides in the building permits, CILA (Comunicazione Inizio Lavori Asseverata), or SCIA (Segnalazione Certificata Inizio Attività) archived at the municipal technical office. If an owner added a veranda or moved a partition wall without authorization, the property is affected by an irregularity that can block the sale or prevent obtaining a mortgage.

Condominium Charges

Another critical aspect of due diligence concerns condominium charges. Pursuant to Art. 63, paragraph 4, of the implementing provisions of the Civil Code, whoever succeeds to the rights of a condominium owner (the buyer) is jointly liable with the seller for the payment of contributions related to the current year and the year preceding the purchase. It is important to specify that “the year” is not necessarily the calendar year, but the condominium management year.

For extraordinary expenses (e.g., roof renovation), case law establishes that the obligation to pay falls on whoever was the owner at the time of the definitive resolution of the works, even if execution occurs later.

The buyer must therefore demand a release statement signed by the condominium administrator certifying the absence of previous debts and already resolved extraordinary works.

The 2025-2026 Real Estate Fiscal System

Real estate taxation in Italy has undergone significant updates, especially regarding benefits for residents abroad and the taxation of capital gains linked to building bonuses.

“First Home” Benefits

The “First Home” (Prima Casa) benefit allows for the reduction of the registration tax from 9% to 2% (or VAT from 10% to 4% in the case of purchase from a builder).

The first home is exempt from IMU unless the property is officially classified as a luxury home (cadastral categories A/1, A/8, and A/9).

For those residing abroad, a property owned in Italy is typically considered a “second home” and is therefore subject to the tax, as the exemption requires official registered residency in the property.

The New Taxation of Capital Gains (Superbonus)

One of the most relevant updates for 2025 concerns the taxation of capital gains generated by the sale of properties that benefited from the Superbonus (110% or 90%). The Budget Law introduced a 26% substitute tax on capital gains realized by selling the property within ten years of the conclusion of works.

The calculation of the capital gain has become more burdensome:

• If the sale occurs within 5 years of the end of works, expenses for subsidized interventions (if the invoice discount or credit assignment was chosen) cannot be deducted from the profit calculation.
• If the sale occurs between 5 and 10 years, 50% of such expenses can be deducted. Excluded from this “Superbonus tax” are properties acquired by succession and those used as a primary residence for the majority of the possession period.

Imposta Municipale Unica

IMU (Imposta Municipale Unica) is the Italian municipal property tax levied on the ownership of buildings, buildable land, and agricultural land. It remains the main wealth tax for second homes. Since 2025, a new centralized collection method has come into force, providing for automatic billing based on updated cadastral data, reducing calculation errors by the taxpayer. IMU is due from the owner even if the property is occupied illegally by third parties, as reaffirmed by Corte di Cassazione with ordinanza No. 2966/2022.

Protection Constraints and State Preemption Right

For investors interested in historic properties or period villas, it is essential to verify if the asset is subject to cultural heritage constraints pursuant to Legislative Decree 42/2004 (Code of Cultural Heritage). Acts transferring ownership of cultural assets must be reported to the Ministry of Culture within 30 days.

The State or local authorities have the option to purchase the asset “by way of preemption” at the same price established in the sale deed. The term for exercising preemption is 60 days from receipt of the report. While this term is pending, the deed is subject to a suspensive condition. If the report is omitted or presented incompletely, the term for State preemption extends to 180 days from the moment the administration becomes aware of it. This mechanism represents a “missed deal” risk for the investor, as the State can step into the purchase even after the parties have reached a definitive agreement.

International Successions and EU Regulation 650/2012

Foreign investors must consider how the purchase of a property in Italy influences their future succession. EU Regulation No. 650/2012 simplified cross-border successions by establishing that the law applicable to the entire succession is that of the State in which the deceased had their habitual residence at the time of death.

Choice of National Law

However, the regulation allows for the choice of the law of the State of citizenship through a testamentary disposition (Professio Iuris).

This is particularly relevant for non-EU citizens (e.g., Americans or British) whose legal systems do not provide for mandatory forced heirship, unlike Italian law which imposes rigid constraints in favor of necessary heirs. Without an explicit choice, a foreign citizen resident in Italy could see their succession governed by Italian rules, which limit the freedom to dispose of one’s assets.

The European Certificate of Succession (ECS), issued in Italy by notaries, is the tool that allows heirs to prove their status and powers in all EU member states without further formalities.

Conclusions and Professional Recommendations

The review of the information provided highlights an Italian real estate market in a phase of modernization, where the reduction of historical legal risks (such as those related to donations) is accompanied by a tightening of speculative taxation. For a secure investment in 2026, the following practices are recommended:

1. Origin Analysis: Verify if the property derives from a donation and, in the case of donations prior to 2025, check if acts of opposition were transcribed within the June 2026 deadline.
2. Certified Urban Due Diligence: Do not limit yourself to cadastral data, but obtain an Integrated Technical Report (Relazione Tecnica Integrata) from a local professional (surveyor or architect) certifying the “Legal State” of the property.
3. Superbonus Verification: Ascertain the end-of-works date and the deduction regime used by the seller to predict the impact of the 26% capital gain in case of resale within the decade.
4. Succession Strategy: Integrate the property purchase into a will that correctly exercises the choice of law applicable under EU Regulation 650/2012, to prevent Italian forced heirship rules from frustrating the owner’s wishes.

In summary, while the Italian system now offers title stability guarantees superior to the past, the technical and fiscal complexity requires a multidisciplinary approach that combines the certainty of the notarial deed with the proactive advice of specialized lawyers and technicians. Only through a holistic understanding of these factors can real estate investment in Italy transform from a “cultural dream” into a solid and profitable financial strategy.

For further information, do not hesitate to contact me:

Avv. Torquato Amicone

Wealth Management & Succession Planning

+39 377 318 8867 / [email protected]