Italian real estate for international investors: how to structure your investment
Updated: Mar 18
In recent years, the Italian real estate market has returned to the forefront of international investors' attention. Real estate funds, family offices, and foreign entrepreneurs are increasingly focusing on cities like Milan, Rome, and Turin, as well as tourist destinations and alternative segments such as hospitality, student housing, and logistics.
However, the attractiveness of Italian real estate depends not only on asset value or return prospects. For foreign investors, it is essential to structure the investment correctly from a corporate and tax perspective to ensure efficiency, asset protection, and flexibility during divestment.
Below we analyze the main aspects that an international investor should consider.
1. Direct investment or through a corporate vehicle
The first topic concerns the legal structure of the investment .
A foreign investor can purchase real estate in Italy:
directly as a natural person
through a foreign company
through an Italian special purpose vehicle (SPV)
The choice depends on several factors: investment size, time horizon, exit strategy, and applicable tax regime.
For significant transactions, it is common practice to use an Italian special purpose vehicle (typically an LLC) to acquire the property. This solution allows:
more orderly asset management;
greater ease of entry for new investors;
ability to use leverage;
greater flexibility during the sales phase.
In many cases, in fact, the disposal occurs through the sale of the shares of the company that owns the property , avoiding the direct transfer of the property and reducing transaction costs.
2. The international holding
In structured real estate investment transactions, the Italian company that owns the property is often controlled by a foreign holding company .
This configuration is particularly common when the investment involves funds or institutional investors.
A typical structure may include:
international holding company (e.g. in Luxembourg, the Netherlands or Switzerland)
Italian special purpose vehicle (SPV) that owns the property
any member or bank financing
This architecture allows for:
centralize investment governance;
facilitate capital raising;
optimize the management of financial flows;
plan the exit efficiently.
Of course, the structure must be carefully designed in light of anti-abuse regulations and double taxation conventions .
3. The topic of permanent establishment
One of the most relevant profiles for foreign investors concerns the risk of permanent establishment in Italy .
If a foreign investor directly manages real estate activities in Italy—for example, through a local operating structure—they may be considered fiscally present in Italy.
For this reason, many investments are made through dedicated Italian companies , which become the tax residents and owners of the real estate business.
In this way the foreign investor maintains a role as shareholder or financier , reducing the risk of direct tax exposure.
4. Property tax regime
Properties located in Italy are subject to a specific tax regime, regardless of the investor's residence.
Among the main aspects to consider:
Purchase taxes
The purchase of real estate may be subject to:
registration tax
mortgage tax
land registry tax
VAT (in some cases)
The tax burden varies depending on the nature of the seller and the type of property.
Income taxation
Income from properties located in Italy is generally taxed in Italy, even if the owner is a foreign individual.
If the property is owned by an Italian company, the rental fees are included in the business income and are subject to IRES (24%) and IRAP .
Capital gains taxation
The sale of the property or shares in the owner company can generate taxable capital gains.
With a well-planned international structure, greater tax efficiency can be achieved during the exit phase , especially when international conventions or favorable participation regimes are involved.
5. The role of leverage
Real estate investments are frequently made with the support of bank leverage .
The special purpose vehicle that owns the property can finance the acquisition through:
mortgages
member financing
mezzanine instruments
The use of leverage allows you to improve your investment returns, but requires careful structuring from a tax perspective, particularly with reference to the deductibility of interest expenses .
6. Governance and investment protection
For international investors, it is essential to provide clear and robust governance mechanisms .
In real estate vehicles it is disciplinary practice:
voting rights and decision-making quorums;
profit distribution policies;
exit clauses (drag-along and tag-along);
pre-emptive rights between members.
These elements are particularly important when the investment involves multiple partners or when the participation of institutional investors is expected.
Conclusions
Italian real estate offers attractive opportunities for international investors, thanks to the quality of its assets, the country's strategic location, and growing demand in various market segments.
However, the success of the investment depends largely on the legal and tax structuring of the operation .
Proper planning allows you to:
reduce tax risks;
optimize the management of financial flows;
facilitate the entry of new investors;
maximize efficiency during decommissioning.
For this reason, cross-border real estate investments require an integrated approach that combines corporate law, international taxation, and financial strategy , right from the early stages of planning the transaction.
About the Author
Edoardo Tamagnone is a lawyer and partner at the law firm Tamagnone Di Marco Avvocati Associati. He focuses on international taxation, investment structures, and wealth planning for investors, family offices, and businesses with cross-border operations.
He works in Turin and international contexts, focusing on the intersection of law, economics, and global capital.
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