Italy's real estate sector has long attracted foreign capital – from individual buyers acquiring residential property to institutional investors assembling commercial portfolios. A cluster of regulatory changes now taking effect in 2025 has materially altered the obligations applying to non-resident and foreign-entity property owners. Failing to act before the relevant deadlines carries direct legal and financial exposure under Italian property legislation and tax legislation alike.
Italy's 2025 real estate regulation changes introduce strengthened due diligence requirements, revised land register update obligations, and tightened rules governing property transfer documentation for foreign owners. Non-resident individuals and foreign-registered companies that hold Italian property are directly affected. Compliance deadlines vary by measure but the earliest obligations apply from the first quarter of 2025, making immediate review of existing holdings essential.
This alert sets out what has changed, which owners are affected, and the concrete steps that must be taken now.
What changed – the regulatory developments and their effective dates
Italian real estate law is shaped by several overlapping bodies of legislation: civil legislation governing property rights and conveyancing, land register rules administered through the Agenzia delle Entrate (Italian Revenue Agency). Notarial legislation governing the execution of a notarial deed (atto notarile). Additionally, anti-money laundering legislation that applies to property transactions above defined value thresholds.
The 2025 changes address three distinct areas.
First, land register alignment obligations. Italian civil legislation has long required that the catasto (land register) reflect the actual state of a property. A 2025 update tightens enforcement of this requirement. Properties where the registered description diverges materially from the physical reality – due to renovation, subdivision, or change of use – must now be brought into alignment within a defined period. For foreign owners, this is particularly acute: many acquired properties years ago without completing the post-purchase registration steps that Italian conveyancing practice expects.
Second, enhanced due diligence at the point of sale. Updated rules under Italian anti-money laundering legislation now require that additional documentary due diligence be completed before a property transfer can proceed. Notaries are required to verify the beneficial ownership chain for any transferring entity that is not a natural person. Foreign companies and trusts holding Italian real estate must supply documentation tracing ultimate beneficial ownership to the satisfaction of the notary. Without this, the atto notarile – the notarial deed that constitutes the legally binding title deed in Italy – cannot be executed.
Third, a revised framework for short-term rental registration. Foreign owners who let Italian property on short-term bases must now register under a national identification system administered by the Ministry of Tourism. The registration requirement became effective in January 2025. Properties that are not registered face administrative fines and are at risk of being barred from listing on digital platforms operating in Italy.
For parallel developments in a neighbouring EU jurisdiction, see our alert on real estate regulation changes in Portugal, which shares several structural features with the Italian approach.
Who is affected – threshold criteria and business categories
The changes apply broadly, but their practical weight falls most heavily on specific categories of foreign owner.
Non-resident individual owners who acquired Italian property and did not follow through on all post-purchase land register formalities are exposed to the alignment obligation. This group is larger than many realise. Conveyancing in Italy involves multiple sequential steps. execution of the notarial deed, registration with the land register. Additionally. Catasto update. and a significant share of transactions completed by non-residents in prior years left one or more steps incomplete.
Foreign companies and holding structures. including vehicles registered in Luxembourg, the Netherlands, Cyprus. Additionally. Common law jurisdictions such as the United Kingdom and British Virgin Islands. are the primary targets of the enhanced due diligence rules. Any such entity that is party to a property transfer after the effective date must supply beneficial ownership documentation compliant with Italian anti-money laundering legislation. Structures that cannot trace ownership to a natural person identified with an Italian tax code (codice fiscale) will face delays or inability to complete the transfer.
Short-term rental operators – whether individuals or companies – who let Italian residential property for periods of fewer than 30 days must register under the new national scheme regardless of where they are domiciled. The threshold is based on rental duration, not transaction volume.
Institutional investors acquiring Italian commercial real estate above a defined value threshold are subject to enhanced reporting to the Agenzia delle Entrate. The value threshold is set by secondary legislation and is subject to annual revision.
Tax consequences run in parallel. Under Italian tax legislation, failure to maintain accurate land register records can affect the calculation of property-related taxes, including registration tax and the annual IMU (municipal property tax). Foreign owners should treat the tax implications as inseparable from the regulatory compliance review. A full analysis of the Italian tax dimension is available through our tax law advisory for Italy.
To receive an expert assessment of how these changes affect your Italian property holdings, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions and timeline
Foreign owners and their advisers should treat the following as a priority checklist.
- Audit existing land register entries. Obtain current extracts from the Italian land register for each property held. Compare the registered description against the actual physical state. Where discrepancies exist, instruct a qualified Italian notary or surveyor to prepare the rectification filing without delay. The alignment deadline is enforced by the Agenzia delle Entrate, and penalties for non-compliance are applied from the expiry of the grace period.
- Review beneficial ownership documentation for any holding structure. If Italian property is held through a company, trust, or fund, compile the full beneficial ownership chain now. Identify whether each ultimate beneficial owner holds an Italian codice fiscale. Apply for a codice fiscale for any individual who does not yet have one – this process typically takes several weeks and must be completed before any notarial deed can be executed.
- Register short-term rental properties. Any property let for fewer than 30 days that is not yet registered under the national scheme must be registered immediately. The registration is administered online. Continued operation without registration exposes the owner to administrative sanctions and potential platform delisting.
- Assess the tax exposure arising from land register misalignment. Consult with an adviser on whether historic discrepancies between the catasto record and the actual property state have generated an underpayment of IMU or other property-related taxes. Voluntary regularisation before an official inquiry carries significantly lower penalties than correction after an audit has commenced.
- Verify that any pending property transfer can proceed. If a sale or acquisition is planned for 2025, confirm with the appointed notary that all due diligence documentation required under the updated anti-money laundering rules is in order. A transaction that stalls at the notarial deed stage because documentation is incomplete can expose the parties to contractual liability under the preliminary sale agreement (compromesso).
Comprehensive support for foreign owners managing Italian property assets is available through our real estate practice for Italy, which covers the full range of conveyancing, land register, and transactional matters.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our real estate practice supports foreign individuals, corporate investors, and institutional clients in managing Italian property assets – from initial due diligence and title deed review through to land register compliance and property transfer. We combine Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions that work across both legal systems. The firm's real estate team has advised on conveyancing and regulatory compliance matters across EU jurisdictions, and our Lisbon base provides direct access to the broader European regulatory environment. Engaging a lawyer in Italy or coordinating cross-border matters through an international law firm with EU-wide reach can determine whether a transaction proceeds on time or stalls at a critical stage. To discuss how these Italian regulatory changes affect your position, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.