Published on and written by Cyril Jarnias
Buying a house with a view of the Tyrrhenian Sea, an apartment in a lively Rome neighborhood, or a farmhouse to renovate in Umbria is no longer just a postcard dream for many French people. In 2026, Italy is in a very unique phase: an overall healthy real estate market, revamped taxation, extended renovation incentives, and a cost of living still lower than in France in most regions. These factors combine to make Italy a true playground for the French investor, whether looking for a second home, a rental project, or a permanent move across the Alps.
This article provides a comprehensive overview, based on the fiscal and economic developments of 2026, to understand the reasons and modalities of investing in Italian real estate for a French resident.
A 2026 Context Largely Favorable to Foreign Buyers
The Italian real estate market enters 2026 in a phase of moderate but solid growth. After a long post-financial crisis stagnation, prices have risen without speculative surges. Indicators converge on the same idea: Italy is neither undervalued nor in a generalized bubble. It is in a “fair price” zone, with expensive pockets (Milan, central Florence, Lombardy lakes, some tourist coasts) and vast regions still very affordable.
Over 12% of residential transactions in Italy are now made by non-Italian buyers, highlighting the growing role of foreign demand.
At the same time, the rental market is under pressure: rents are rising faster than purchase prices. Annual increases exceeding 3 to 4% have been recorded, with stronger peaks in major cities and tourist areas. In some urban neighborhoods or student cities, the main constraint is no longer demand, but a shortage of suitable supply. As a result, average gross rental yields in Italy significantly outpace those in France in many segments.
Italy vs. France: Cost and Yield Comparison
For a French investor, one of the first reflexes is to compare with their domestic market, where prices have tightened in major metropolitan areas and real estate taxation has hardened.
Overview of several key indicators shown in the table
Definition and context of the indicator
Numerical or qualitative value associated
Observed evolution or direction
| Indicator (2026) | France (average) | Italy (average) | Comment |
|---|---|---|---|
| Cost of living, one person (€/month, excl. rent) | ~$1,737 | ~$1,624 | About 7% cheaper in Italy |
| Cost of living, family (€/month, excl. rent) | ~$4,119 | ~$3,873 | Cost advantage for Italy |
| Purchase price apt. city center (€/m², national avg.) | €452.71 / sq ft | €302.93 / sq ft | Italy ~33% cheaper |
| Average gross rental yield | ~3.5% | ~4.3% | Yield advantage for Italy |
| Fixed mortgage rate 20-year | 3.77% | 3.71% | Slight favor for Italy |
The biggest gaps appear especially on purchase: a city-center apartment costs on average one-third less in Italy than in France, and the difference climbs to nearly 37% outside the center. On a budget of €300,000, the purchasable surface is therefore significantly larger on the Italian side, or at an equivalent budget, rental cash-flow can be more generous thanks to higher yields.
Where to Invest in Italy When Coming from France?
Italy is extremely heterogeneous, both in terms of prices and rents, economic dynamism or tourist appeal. For a French investor, the key is to balance accessibility, potential for capital gains, rental security and possible personal use.
Major Metropolises: Milan, Rome, Florence, Turin
Milan remains the most expensive and dynamic city in the country, especially for prestige real estate: in the historic center, some streets exceed €11,000/m², and neighborhoods like Brera peak well above €15,000–€18,000/m² for top-tier properties. Gross yields are around 3 to 5%, but this city stands out for high rents, a liquid market, and near-structural demand, especially in business districts and near universities.
Rome displays prices slightly lower than Milan but remains expensive in its hyper-center, with streets over €7,500/m². The historic heart offers more modest yields, but peripheral student neighborhoods like San Lorenzo stand out: this area shows nearly 6.8% gross yield on studios according to market studies, which is high for a major European capital.
Florence has high prices, around €5,600/m² in the center, but lower than Paris, with annual growth near +6%. Short-term rentals there are very lucrative, but regulations are tightening, as everywhere in Europe, requiring checking local rules.
Turin, on the other hand, is often cited as the “good deal” of the North: the city still offers one of the best value-for-money ratios among the major metropolises of the peninsula, with prices lower than Milan but solid rental demand (students, young professionals, families). For an average budget, Turin allows combining good yield with potential for appreciation.
Medium-Sized Cities and “Safe Bet” Regions
Regional price data show strong disparities. Some benchmarks of average sale prices by region (source Immobiliare.it, 2026):
| Region | Average sale price (€/m²) | Average rent (€/m²/month) |
|---|---|---|
| Trentino-Alto Adige | €3,704 | €13.40 |
| Liguria | €2,722 | €11.33 |
| Lazio | €2,592 | €15.73 |
| Veneto | €2,184 | €12.19 |
| Emilia-Romagna | €2,146 | €13.26 |
| Sardinia | €2,463 | €12.88 |
| Abruzzo | €1,381 | €8.14 |
| Umbria | €1,178 | €8.45 |
| Calabria | €960 | €8.46 |
For a French buyer, several intermediate areas appear particularly interesting:
In Emilia-Romagna and Veneto, cities like Bologna, Verona, Padua, or Vicenza combine a strong economy, universities, and flourishing tourism, with yields often higher than Milan for a lower entry price. In Lazio outside central Rome, well-connected suburbs and medium-sized towns along transport axes offer decent rents and a less speculative market. In Umbria, Abruzzo, and inland Sicily, prices remain very low (between €1,000 and €1,400/m²) for postcard landscapes, ideal for French buyers seeking a second home, retirement, or long-term renovation projects with a contained acquisition cost.
Vacation Markets and High Yield: Coastline, Lakes, South
Italy is full of areas where seasonal rentals (Airbnb, Vrbo…) can generate very high gross yields, often above 8–10% on small units. Rental yield data by category show, for example:
| Type of property | Average gross yield Italy |
|---|---|
| Studio | ~10.5% |
| 1-bedroom | ~9.3% |
| 2-bedroom | ~9.2% |
| 3-bedroom | ~7.5% |
| 4-bedroom and more | ~7.3% |
These averages combine very different areas, but confirm that small units in liquid locations (cities or tourist resorts) outperform.
On the specific areas side:
– Liguria, Sardinia, Puglia, Sicily often show yields of 4 to 6% in standard rentals, and much higher in well-managed seasonal rentals.
– Lake Como and the major lakes offer more of a prestige and wealth preservation play than spectacular yield: expect 2 to 3% gross in the ultra-luxury segment.
– Dynamic tourist cities like Catania, Florence, or Verona allow mixing personal use and tourist rentals with high occupancy rates, subject to compliance with local regulations.
To compare with France, one can contrast the Ligurian coast with the French Riviera: prices per square meter on the French coast often range between €8,000 and €15,000/m² with yields of 2.5–3.5%, while Liguria offers more like €3,500–€8,000/m² and 3–5% gross yield.
A Generous but More Regulated Rental Market
A crucial point for the French investor is the evolution of regulations on short-term rentals. The Italian budget law for 2026 introduces several notable changes regarding Airbnb-style tourist rentals.
Now, the limit to remain in the “non-professional” framework is a maximum of two properties for short-term rentals. Beyond two properties, the activity is presumed entrepreneurial, which implies opening a partita IVA (VAT number), a different tax regime, and leaving the simplified flat-rate schemes.
Furthermore, a flat-rate substitute tax applies to short-term rentals:
– 21% flat-rate levy on income from a single property rented short-term (outside professional activity);
– 26% for the second property.
Once the activity is considered entrepreneurial (more than two properties), these flat rates are no longer available, and income is taxed as business income.
For a French investor planning to multiply small apartments for short-term rentals, this evolution requires careful strategy calibration: either limit to one or two properties, or accept entering a structured professional framework in Italy.
On the other hand, long-term rentals remain encouraged and benefit from certain deduction schemes for energy or renovation work, which we will see later.
Purchase Taxation: No Specific Surcharge for Foreigners
One of the often overlooked advantages of Italy is the absence of a specific surcharge for foreign buyers. A French person pays exactly the same duties as an Italian in a given situation. The total acquisition cost for a non-resident buyer typically falls between 10% and 16% of the price, including transfer taxes, notary fees, agency fees, and miscellaneous costs.
Main Purchase Scenarios
The tax regime depends mainly on the seller (individual vs. developer) and whether the buyer benefits from “prima casa” (first home) advantages under Italian tax law.
Schematically:
| Purchase situation | Main tax type | Standard rate | Rate with “prima casa” |
|---|---|---|---|
| Purchase from an individual, second home | Registration tax | 9% of tax base | 2% |
| Purchase from a developer, non-luxury property | VAT (IVA) | 10% (22% luxury) | 4% |
| Purchase with “prima casa” regime | Reduced registration or VAT | — | -7 to -6 points approx. |
The “prima casa” is the main lever for reduction: registration tax reduced from 9% to 2%, VAT reduced from 10% to 4%, fixed cadastral and mortgage duties (€200 each), and most importantly IMU exemption (municipal tax) on non-luxury primary residences. But for a French person, this status requires strict conditions:
– establishing fiscal residence in Italy;
– making the purchased property their declared primary residence;
– being a resident in the municipality within 18 months of purchase;
– not owning another “prima casa” property in the same municipality;
– not being classified as a “luxury” category (A/1, A/8, A/9).
Most French buyers purchasing a second home will not be eligible. They will therefore be taxed as owners of a “seconda casa”, without IMU reduction and with full-rate registration duties.
IMU, Annual Taxes, and New 2026 Rates
For a French property owner in Italy, IMU (Imposta Municipale Unica) is the main recurring tax. For a typical second home, expect a range of 0.4% to 1.1% of the cadastral base, which most often represents €500 to €3,000 per year for a standard apartment or house.
Starting in 2026, Italy moves to a structured national grid, with:
– a base rate of 8.6 ‰;
– a maximum ordinary rate of 10.6 ‰;
– an exceptional cap of 11.4 ‰ in certain specific cases.
Municipalities retain an adjustment margin within this range. Certain situations qualify for reductions: uninhabitable building, vacant and unrented property, free-of-charge use by a relative, officially classified tourist properties, etc. The procedures (automatic or upon application) vary by municipality.
For French nationals of Italian origin registered with AIRE, a draft law passed in 2025 allows, under conditions (single property in Italy, municipality with fewer than 5,000 inhabitants, not rented), substantial relief up to total elimination of IMU for small cadastral values.
Italian draft law 2025
Net Yield: A Still Favorable Differential
Even taking IMU into account, the rental yield advantage of Italy over France remains noticeable. If we compare two apartments of €500,000, one in France with a gross yield of 3.5%, the other in Italy at 4.3%, the annual gross difference reaches:
– France: €17,500 in gross rents;
– Italy: €21,500 in gross rents (i.e., €4,000 more per year).
Even after deducting IMU and sometimes higher management costs for a tourist rental, the cash-flow gap remains appreciable, especially for an investor who also uses the property for their own vacations.
Renovation, Ecobonus, and Superbonus: Still Attractive Tax Arsenal
The other major argument in favor of Italy for a French buyer is the arsenal of tax bonuses for renovation and energy efficiency. The 2026 budget law extended several key measures.
Renovation Bonus and Ecobonus 2026
For “standard” renovation work (bonus ristrutturazioni), the 2026 law provides:
– for a primary residence: IRPEF deduction of 50% of expenses, up to €96,000 per property;
– for a secondary residence: deduction of 36%, still up to €96,000.
These deductions are spread over several years in the Italian income tax return. They cover extraordinary maintenance, rehabilitation, improvement work, including seismic retrofitting or removal of architectural barriers.
For energy efficiency work (ecobonus) on properties used as a residence or rented long-term, the rate is 50% for primary residences and 36% for other properties. Caps vary depending on the nature of the work: insulation, window replacement, solar panel installation, replacement of heating systems, etc.
Superbonus 110%: The New Landscape
The famous Superbonus 110% has been progressively tightened and its taxation regulated to prevent speculation. It remains possible in some cases to benefit from very strong incentives for major energy or seismic renovation work, but the 2026 budget law introduces an important measure: a substitute tax of 26% on capital gains realized from the resale of properties that benefited from the Superbonus, if the resale occurs within ten years of the completion of the work.
The rules are specific:
If the sale occurs within the first 5 years, the subsidized expenses (invoice discount or credit transfer) are not deductible for calculating the capital gain. Between 5 and 10 years, 50% of these expenses are deductible. Properties acquired by inheritance or used as a primary residence for most of the holding period are excluded from this tax.
For a French person buying in 2026 a property already renovated via Superbonus, it is crucial to verify the completion date of the work, the subsidized amounts, and the options used (invoice discount, credit transfer) to measure the potential impact of a resale within ten years.
Furniture Bonus: Furnishing with Tax Benefits
The law also extends the bonus mobili, a 50% reduction on the purchase of furniture and appliances for a property undergoing renovation, with a cap of €5,000 in expenses. This scheme applies to both primary and secondary residences, provided the renovation work is eligible and declared.
For a French investor setting up an apartment for furnished rental (long or short term), this bonus allows significantly reducing the initial furnishing cost.
Living in Italy or Not: Primary Residence, IRPEF Taxation, and Special Regimes
Another strategic choice for a French person relates to their tax status: remain a non-resident in France and simply a property owner in Italy, or transfer their tax residence to the peninsula.
If You Remain a Tax Resident in France
In this case, Italy will consider you a non-resident. You will be taxed in Italy on your Italian real estate income and on your Italian real estate capital gains, as well as on IMU. In France, this income will also be declared, with application of the France-Italy tax treaty to avoid double taxation (tax credit, etc.).
You will not be able to benefit from most “prima casa” (primary residence under Italian law) regimes, nor from the IMU exemption on the primary residence, nor from the very advantageous flat-rate schemes for new residents.
If You Transfer Your Tax Residence to Italy
In this scenario, Italy becomes your center of economic and personal interests. You can then, if conditions are met, consider:
– the “prima casa” regime for your main home, with all the purchase tax reductions and IMU exemption (excluding luxury properties);
– access to 50% deductions on renovation work for this primary residence, up to €96,000;
– IRPEF rates by bracket confirmed by the 2026 budget law:
– 23% up to €28,000 of income,
– 33% between €28,001 and €50,000,
– 43% beyond that.
Italy offers a particularly advantageous tax regime for very high net worth individuals, often nicknamed the ‘CR7 rule’.
– a flat tax on foreign-source income of €300,000 per year (instead of €200,000 previously) for new residents starting in 2026;
– a maximum duration of 15 years for this regime;
– possibility to extend the regime to family members with a flat fee of €50,000 per person;
– prerequisite: not having been a tax resident in Italy for at least 9 of the 10 years preceding the option.
This scheme clearly targets a high-net-worth globalized clientele. A French retiree or international entrepreneur with significant foreign income can find spectacular optimization, combining pleasant residence, capped taxation, and real estate investment in a stable market.
Access to Credit: Possible but Demanding
Contrary to popular belief, it is perfectly possible for a French person to partly finance their purchase through an Italian mortgage. Major banks (Intesa Sanpaolo, UniCredit, Banco BPM, BNL…) have dedicated services for non-residents, even if they communicate little about them.
In practice, the rules are stricter than for an Italian:
The minimum loan amount required by most banks to finance a property for a non-resident, with a property value threshold often set at €200,000.
Banks require extensive documentation: French tax returns, pay slips or financial statements, bank statements, proof of down payment, and compliance with a debt-to-income ratio (generally less than 35% of net income including all loans). You also need a codice fiscale and an Italian bank account.
Many high-income French buyers ultimately prefer to use cash, or take out a loan in France (or a Lombard loan backed by a securities portfolio) to purchase in Italy outright, which strengthens negotiating power.
Legal Framework: Title Security and Simplification of Donations
French buyers are often more wary of foreign property law. In this regard, Italy has undertaken a major simplification with the 2025 Simplification Decree, which profoundly changes the issue of properties of “donative” origin (from a donation).
Until now, many notaries and banks were reluctant to finance or insure properties that had been the subject of a donation, because reserved heirs could challenge years later and claim restitution in kind of the property, even if it had been resold to a third party in good faith. Result: recurring need for expensive insurance against donation risks, delays, uncertainties.
From December 18, 2025, the reform radically changes the situation:
The protection of reserved heirs becomes obligatory rather than real: they can no longer recover the property itself from a good-faith buyer, but only claim financial compensation from the initial donee. Properties from donations thus become “bankable” like any normally purchased property, and banks can finance and notaries handle these files without systematically requiring insurance.
A six-month safeguard clause remains for successions opened before the entry into force and already completed donations, but only if heirs have formalized an objection within that period. After that, the new regime applies fully and secures acquisitions.
For a French person buying in 2026, this means greater market transparency, fewer hidden risks on the property’s origin, and better acceptance of bank financing.
Capital Gains Taxation: Caution on Properties Renovated with Bonuses
Beyond the specific Superbonus case already mentioned, the taxation of Italian real estate capital gains remains something to watch, especially for short-term operations.
Rate of the substitute tax introduced by the 2026 budget law on capital gains from resale of properties that benefited from construction bonuses, subject to time and exemption conditions.
In a typical scenario, a French person buying in 2026, renovating using bonuses, then reselling in 2029 for a substantial capital gain must factor this 26% into their profitability calculation. Italy clearly aims to discourage short-term subsidized speculation.
Cost of Living and Retirement Strategy: Italy, a Credible Alternative to France
For many French people, real estate investment in Italy is intertwined with a retirement or semi-residence project. In this area, numerical comparisons remain favorable to the peninsula.
A couple can live comfortably in:
– Southern Italy: €2,000 to €2,500 per month;
– Central Italy: €2,500 to €3,000 per month;
– North (Milan, major cities): €3,000 to €3,500 per month.
Homeowners reduce their budgets by €300 to €700 compared to renters.
Added to this are specific, highly competitive tax regimes for foreign retirees, notably the flat 7% rate on foreign income in certain Southern municipalities (extra-contextual here but complementary for the relocating investor). For a French retiree who moves to these eligible municipalities and purchases a property, the “mild taxation + moderate real estate prices” combination becomes extremely attractive.
Practical Procedure for a French Buyer: From Search to Signing
Even though the article focuses on the “why”, it is useful to briefly recall the “how”, because Italian specificities also influence the investment’s appeal.
The standard process involves several structuring steps:
1. Obtain a codice fiscale: this Italian tax identification number is essential for opening a bank account, signing a purchase promise, paying taxes, and subscribing to service contracts (water, electricity, internet). It can be obtained free of charge from the Agenzia delle Entrate or the Italian consulate in France.
To analyze the market, consult real estate portals such as Idealista or Immobiliare.it to get a detailed view of prices. It is highly recommended to use a local real estate agent (‘agente immobiliare’) as well as a surveyor or engineer to technically assess the property, especially if it is an old building to renovate.
3. Offer and preliminary agreement (compromesso): the purchase proposal (“proposta d’acquisto”) accepted by the seller can already become a binding contract. The preliminary agreement (“contratto preliminare” or “compromesso”) is the crucial step: a deposit of 10 to 30% of the price is paid, called “caparra confirmatoria”. If the seller withdraws, they must repay double the deposit; if the buyer withdraws without a suspensive clause (financing, zoning…), they lose their entire deposit.
The final sale is signed before a notary (notaio), a neutral public official who reads the deed, verifies the chain of title, registers the transaction with the land registry, and collects taxes for the state. They represent neither buyer nor seller. It is strongly recommended to hire a specialized lawyer, preferably French-speaking, to defend the buyer’s interests.
5. After signing: transfer of service contracts, declaration of the property to the municipality for IMU, cadastral registration, possibly residence procedures if you wish to become an Italian resident.
The Italian peculiarity is that the legally binding point occurs very early: at the signing of the preliminary agreement, not on the notary day as in France. Hence the importance of performing most checks (zoning, easements, compliance, condominium fees, past work, used bonuses) before signing the compromesso.
Conclusion: A Country Still Undervalued for the French… Provided You Aim Right
In 2026, investing in real estate in Italy represents for a French person a rare combination of positive factors: average prices significantly lower than France, superior rental yields in many configurations, a generally healthy residential market, generous renovation tax incentives, and a quality of life hard to match.
Tourist rental taxation is tightening, and capital gains on subsidized properties are more regulated. Sought-after areas like central Milan, intramural Florence, or Lake Como are overvalued by 10 to 20%. On the other hand, many regions in central and southern Italy offer low prices and strong revaluation potential thanks to tourism, remote work, and quality of life.
For a French investor, the key in 2026 is to adopt a selective and informed approach: favor “good normal cities” over overpriced tourist trophies, intelligently leverage renovation and eco-bonuses, anticipate IMU and rental taxation, and, for those considering a real move, closely examine the residence and flat tax regimes offered to newcomers.
In this framework, Italy appears not only as a country where you invest for the pleasure of spending time there, but also as a market where the numbers – yields, taxation, costs – can objectively work in favor of the French person who knows how to prepare their project seriously.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
