Investing in Real Estate in Florence: Market, Returns, and Winning Strategies

Published on April 26, 2026 and written by Cyril Jarnias

Florence has long attracted art lovers and tourists. But in recent years, the city has also established itself as a top-tier real estate market, both for capital preservation and generating rental income. Between rising prices, solid yields, and increasingly strict regulations on short-term rentals, investing in real estate in Florence now requires a real strategy.

Good to know:

This article details the Florentine real estate market, including yields, promising neighborhoods, tax and regulatory framework, and purchase steps for an investor, especially a foreign one.

An expensive but dynamic and resilient market

The Florentine real estate market sits at the top of the Italian range. Florence is generally ranked as the second most expensive market in the country, behind Milan, and well above the national average.

In 2025, the average price reaches about €4,546/m², up more than 7% year-on-year from €4,244/m² in 2024. Resale data from the first quarter of 2025 confirm this upward trend, with an average price around €4,331/m² and annual growth of 6.1%. Over five years, the city has recovered and exceeded its pre-crisis levels, with an overall increase of about 16% since 2019.

4724

Real estate prices peaked at €4,724/m² in January 2026, their highest level in two years.

Projections from several research institutes, such as Nomisma or Knight Frank for the prime segment, converge on continued growth, in a range of 3 to 7% annual growth through 2026, with even better performance expected in the very high-end segment (cumulative 15 to 25% over five years for luxury properties).

Florence in the Italian landscape

For an investor, it is useful to situate Florence relative to other major Italian cities.

Florence stands out for a price/yield combination that is quite favorable: more expensive than average, less expensive than Milan, but with faster growth than the other two major cities and competitive rental yields.

Solid rental yields, especially on smaller units

For an investor looking to buy to let, the Florentine market offers particularly interesting figures.

Citywide, recent estimates give an average gross rental yield around 5.5%, with a realistic range between 5 and 6.2% for most apartments. Some studies, particularly in 2025, even put the average gross yield at 7.35%, depending on the calculation method and sample used.

Net, after expenses and taxes, yields generally sit around 3.6–4.4%, with a range of 3 to 5% for most investors.

Yield by property type

Smaller units clearly stand out as the most profitable. Studios and one-bedrooms concentrate the best rent-to-price ratios, while larger apartments require more capital and offer slightly lower yields.

In the historic center, yields are mechanically slightly more compressed due to higher prices per square meter, while remaining attractive for such a sought-after city center.

Overall, the city shows a rent-to-price ratio around 5.5% per year, or about 0.46% per month, consistent with the idea of an expensive but still profitable city. The price-to-rent ratio of around 22–23 years (depending on whether you are in the center or outside) means that an average property theoretically pays for itself in a little over twenty years of gross rents.

Rising rents and strong demand

On the tenant side, the Florentine market is under pressure. Typical monthly budgets for an apartment range from about €600 for the most modest situations to €3,000 for high-end properties. Tenants targeting the “mid-range” segment often fall between €1,100 and €1,800 per month, while more affluent clients are willing to exceed €1,800–3,000.

21.48

In May 2025, the average rent demanded in France stood at €21.48/m² per month, an all-time high.

Central neighborhoods easily reach €25 to €30/m² for long-term leases, while some more peripheral areas remain below €16/m², such as Isolotto (≈ €15.5–16/m²).

Rents by property type reflect this pressure:

The center remains significantly more expensive than the outer districts: a 1-bedroom in the hypercenter rents on average around €993 (range €800–1,400), compared to €775 outside the center (€550–950). For a 3-bedroom, this gap is even larger (≈ €2,000 in the center vs. €1,300 in the periphery).

For an investor, this rental dynamic is a major asset, but it comes with a more tense political context around housing for residents, which fuels regulations on short-term rentals.

Where to invest in Florence? Neighborhood comparison

One of the keys to investing in real estate in Florence is choosing the right neighborhood. Between the very expensive UNESCO center, emerging areas, and student peripheries, risk and return profiles vary greatly.

Historic center: prestige, scarcity, maximum regulation

The Centro Storico, a UNESCO World Heritage site, represents the symbolic and economic heart of the city. Around the Duomo, Piazza della Signoria, Santa Croce, or Santa Maria Novella, prices often range between €5,300 and over €8,000/m² for the best buildings, with peaks over €10,000/m² for fully restored prestige properties.

This sector attracts an international clientele seeking prestigious pied-à-terre, properties decorated with period frescoes and boasting monumental views. For the investor, the interest lies more in long-term capital appreciation than yield optimization, especially since the new rules on short-term rentals are among the strictest in Italy.

Oltrarno: bohemian charm and appreciation potential

Across the Arno, the Oltrarno (Santo Spirito, San Frediano, San Niccolò) has become a very sought-after area. Prices there approach or exceed €5,800–6,000/m² for quality properties, with annual growth of 8 to 10% in the luxury segment.

Tip:

This neighborhood combines local authenticity and a dynamic cultural life with strong foreign demand. Real estate prices, while high, are slightly lower than in the UNESCO core, allowing for generally higher rental yields. This is notably due to the ability to generate high rents, especially in the high-end rental segment.

Residential neighborhoods with potential: Campo di Marte, Gavinana, Legnaia, Florence North

Around the center, several residential areas offer a more favorable price/yield ratio and a more stable tenant base (families, workers, students).

Campo di Marte, northeast of the center, offers prices around €4,200–4,500/m². A green, well-served district, it attracts families and professionals and is well suited for long-term rentals. The presence of facilities like the Artemio Franchi stadium or the Nelson Mandela Forum also fuels occasional demand.

To the south, Gavinana and Galluzzo offer a more affordable alternative to historic areas, with prices significantly below €5,700/m² in the center. These increasingly sought-after neighborhoods benefit from renovation programs and decent accessibility, with growing demand for both traditional rentals and short-term rentals outside the UNESCO zone.

Attention:

North Florence neighborhoods, Novoli/Firenze Nord, and Rifredi offer attractive entry prices (€2,500 to €3,800/m²) for investors. Rental demand is supported by the proximity of the new courthouse, university campuses, and large hospitals, promising good yields.

Most profitable neighborhoods: Rifredi, Isolotto-Legnaia, Novoli, Statuto

The best gross yields are concentrated precisely in the larger, less expensive residential neighborhoods: Rifredi, Isolotto-Legnaia, parts of Novoli, and Statuto.

In these areas, gross yields generally range between 5.8 and 6.5%, sometimes higher on well-located small units. The key lies in the price gap compared to the center: rents remain decent due to good transport links (T2 tram, proximity to Santa Maria Novella, etc.) and the presence of major employment hubs (University of Florence, Careggi Hospital), while the purchase price is significantly lower.

A telling example is Isolotto-Legnaia: prices per square meter are around €3,210–3,900/m², for rents around €13–16/m². Gross yields there readily exceed 5.5–6%. This profile particularly appeals to investors focused on long-term rentals to young professionals or families.

Long-term or short-term? An increasingly regulated trade-off

Investing in real estate in Florence requires a clear position on rental strategy. The short-term rental model was long a seeming El Dorado, but the municipality has significantly tightened the regulatory framework in the UNESCO center.

Yields and economic reality of short-term rentals

On paper, a seasonal rental can generate gross yields of 9 to 14%. In practice, once platform fees (3–15%), professional cleaning (€50–100 per turnover), higher utility costs, furniture wear and tear, and management (up to 20–25% of revenue if outsourced) are factored in, the net yield gap with a long-term rental is much narrower.

Gross cap rates for a properly licensed tourist rental in the historic center are more likely between 7.1 and 9.9%. After applying the flat tax Cedolare Secca at 21%, net yields generally fall to around 5.6–7.8%.

Good to know:

To be more profitable than a standard long-term rental (rate of 5–6.2% gross), a tourist rental must maintain an annual occupancy rate of at least 55 to 65%. This threshold is achievable in certain micro-segments that are heavily touristic, but may become difficult if demand shifts to other areas or if regulations limit supply.

A regulatory clampdown in the historic center

Florence has launched a real offensive against the massive transformation of the center into an “open-air hotel”. Several measures are now in place:

– freeze on new permits for short-term rentals within the entire UNESCO perimeter (the “Nucleo Storico”);

– requirement for a municipal authorization valid for five years, tied to the owner and the property, for non-professional short-term rentals;

– minimum surface area of 28 m², enhanced safety requirements (fire extinguishers, gas/CO detectors, compliance of installations, Energy Performance Certificate APE);

– ban on anonymous key boxes, requirement to identify guests and report via police portals (Alloggiati Web) and tax portals;

– requirement to display a national identification code (CIN) on all listings and at the entrance of the accommodation.

Good to know:

Only properties already legally operating before the new measures took effect can, under conditions, continue to operate in the historic center. For new investors, this area is therefore largely closed to standard short-term rentals.

The city couples these constraints with incentives: owners who convert a tourist rental in the center into a long-term rental can benefit from a waiver of certain local taxes on second homes for three years.

An opportunity for long-term rentals

This regulatory tightening, while complicating life for Airbnb hosts, simultaneously creates an interesting window for owners who turn to long-term rentals. The reduction in the stock of legal tourist accommodations and the forced transition of many properties to the traditional market should somewhat ease pressure on rents in the medium term, but with demand still strong, yields remain at a good level.

Moreover, several neighborhoods just outside the UNESCO zone – Campo di Marte, Novoli, Rifredi, Isolotto, Gavinana – naturally capture part of the “spilled-over” tourist demand and retain broader regulatory leeway, allowing them to alternate between medium-term rentals (students, workers on assignment) and standard rentals, without relying exclusively on tourist clientele.

Costs and taxation: what an investor should plan for

To invest in real estate in Florence, calculating profitability cannot ignore ongoing charges, taxation, and management fees. These items will significantly impact net yield.

Condo fees and maintenance

Condo fees (spese condominiali) often represent 8 to 15% of the monthly rent, with a realistic range up to 20%. For a rent of €1,200 per month, this translates to about €80 to €180 in fees, sometimes more in buildings with an elevator, central heating, or special services.

On an annual basis, condo fees and routine technical maintenance absorb on average between 12 and 23% of rents. It is advisable to budget for annual maintenance of around €20 to €35/m², i.e., €1,200 to €2,100 for a 60 m² apartment. Across the market, the range can be wider (€15 to €45/m²), which corresponds to €900–2,700 per year for the same surface area, depending on the building’s age and condition.

200-600

The annual cost of homeowner’s insurance for a house can range from €200 to €600 for standard coverage.

Annual taxation: IMU and rental income tax

For a non-resident investor, an apartment in Florence is considered a second home and subject to IMU (Municipal Property Tax). The official rate for second homes is 1.06% of the cadastral value. However, since the cadastral base is much lower than the market value, the effective charge represents more like 0.3 to 0.65% of the real value, i.e., about €1,050 to €1,800 per year for an apartment valued at €300,000, or €1,200–2,800 for a property between €450,000 and €650,000.

Rental income is taxable in Italy, even for a non-resident owner. For long-term residential leases, the most commonly used regime is the flat tax “Cedolare Secca” at 21% of gross rent. In some cases of regulated rents, the rate can drop to 10%.

Good to know:

For short-term rentals, the standard Cedolare rate is 21%. However, if the owner operates more than four tourist properties, a higher rate of 26% applies. This situation reclassifies the activity as semi-professional and requires obtaining a VAT number (Partita IVA).

Management and leasing fees

Many foreign owners entrust property management to an agency. For a long-term rental, ongoing management fees generally range between 6 and 10% of collected rents (sometimes up to 12%). At €1,200 monthly rent, this represents €70 to €150 per month.

Leasing fees (finding a tenant, drafting the lease, move-in inspection) typically amount to one month’s rent or 10–15% of an annual rent. These one-off costs eat into first-year profitability but are diluted if the tenant stays for a long period.

For short-term rentals, management is much heavier and generally billed much higher (up to 20–25% of revenue), which explains the limited net yield gap with standard rentals.

Buying in Florence for a foreign investor

Investing in real estate in Florence is open to foreigners, subject to respecting Italian rules of “reciprocity” for non-EU citizens. Concretely, a European Union national can buy freely, while nationals of third countries must verify that their country allows Italians to buy there under comparable conditions – which is the case for most Western countries (USA, Canada, UK, Australia, etc.).

Types of properties accessible and property rights

A foreign investor can acquire the same properties as an Italian: apartments, townhouses, villas, rural properties, building plots. The standard form of ownership is full ownership (“piena proprietà”), including land and buildings.

There are no quotas limiting the number of properties a foreigner can own in a building. However, it is important to note that owning property in Italy does not grant any automatic right of residence or direct access to citizenship. On the other hand, owning a home may facilitate certain visa applications (e.g., elective residence) by demonstrating the availability of accommodation.

Purchase process: offer, preliminary contract, notarial deed

The acquisition process follows several codified steps:

Example:

Acquiring a property in Italy follows a structured process. It typically begins with submitting a written purchase offer (proposta d’acquisto), often accompanied by a deposit. Legal and technical checks (due diligence) follow, such as reviewing the title deed or urban planning status, recommended with a lawyer and a surveyor. The parties then sign a preliminary sales contract (contratto preliminare), which details the price, timeline, and conditions, and must be registered for tax purposes. After seeking possible financing, the transaction concludes with the signing of the final deed (rogito) before a notary, which formalizes the property transfer with cadastral and tax authorities.

The entire process, from accepted offer to deed, takes in practice between two and four months, sometimes up to six in case of financing or issues to resolve. The notary plays a central role: they are a public official bound by impartiality and ensure the legal validity of the transaction. They do not replace a lawyer, who remains preferable to defend the sole buyer’s interests.

Good to know:

For a real estate purchase in Italy, obtaining an Italian tax code (Codice Fiscale) is mandatory. It is usually issued free of charge by an Italian consulate or by the Agenzia delle Entrate. It is also highly recommended to open a local bank account to facilitate financial transactions, such as payment of the sale price, property tax (IMU) debits, and rent collection.

Financing: conditions for non-residents

Italian banks lend to foreigners, but with stricter conditions than for residents. For a non-resident, the loan-to-value ratio (LTV) is most often between 50 and 60%, implying a personal contribution of 40 to 50%. Residents with Italian income can go up to 80% or more, even 100% under certain first-time buyer schemes.

In 2026, fixed rates offered to foreigners fall in a range of about 3.0 to 3.8%, variable rates between 3.4 and 4.6%, with a tendency for non-residents to be offered the top of the range. Banks require solid documentation, particularly appreciate income in euros or strong currencies, and closely examine the debt-to-income ratio, which should generally not exceed 30–35% of net income.

Tip:

In France, the preliminary approval process is less formalized than in other countries; the lender’s final decision mainly occurs once the file is complete and the property is precisely identified. To facilitate and secure this process, it is strongly recommended to use a credit broker accustomed to working with international clients.

Acquisition costs: taxes and fees

Transaction costs in Italy are significant and must be integrated into the investment plan. In Florence, the total bill (notary fees, taxes, agency commission, lawyer fees, and various administrative costs) generally ranges between 10 and 15% of the price for an older property, sometimes slightly less (7–10%) for a new property bought from a developer.

The heaviest component is the registration tax (imposta di registro) on older properties: 9% of the cadastral value for a second home, 2% for a primary residence benefiting from the “prima casa” status. For a non-resident investor, the 9% rate applies most of the time.

Added to these duties are fixed cadastral and mortgage taxes (€50 or €200 each depending on the case), notarial fees (often 1 to 2% of the price), the real estate agent’s commission (about 3–5% of the price, often split between seller and buyer), and possibly fees for a lawyer, interpreter, surveyor.

To illustrate the order of magnitude: on an apartment of €300,000 purchased as a rental investment in Florence, it is reasonable to budget between €30,000 and €45,000 in fees and taxes, i.e., 10–15% on top of the price.

Risks, constraints, and mistakes to avoid

Investing in real estate in Florence offers great prospects, but also comes with a series of specific risks.

The first mistake is underestimating the total cost: without accounting for the 10–15% entry costs and a realistic maintenance budget, the displayed profitability may turn out much lower than expected. It is also common to overestimate the ease of access to credit, especially for a non-resident with income outside the eurozone.

Attention:

Legally, buying a property without a complete due diligence (verification of titles, urban planning compliance, absence of undeclared works, conformity of cadastral plans) exposes the buyer to costly regularization work, even the impossibility of renting the property in certain configurations.

In the historic center and some neighborhoods like Oltrarno, heritage constraints (protection of facades, decorative elements, restrictions on interventions) can hinder renovation projects. On short-term rentals, lack of authorization, non-compliance with minimum surface areas, absence of a CIN code or guest declaration can lead to high fines or even administrative closure of the property.

Finally, one must keep in mind the broader context: political pressure against overtourism, risks of fiscal tightening, rising renovation costs (especially to meet energy standards imposed by EU directives), and more global risks (economic slowdown, rising rates, climate, flooding).

Winning strategies for investing in real estate in Florence

Despite these constraints, Florence remains a very attractive market for a clear-eyed and well-prepared investor. Several strategic axes emerge.

For a “controlled risk/return” profile, long-term rentals in areas with strong structural demand – Rifredi, Novoli, Campo di Marte, Isolotto-Legnaia, Gavinana – appear as an excellent compromise. Entry prices remain reasonable, vacancy is limited by the presence of universities, hospitals, and large employers, and regulations are more flexible than in the UNESCO center.

For a more wealth-preservation profile, with a long-term horizon, acquiring a quality apartment in the Oltrarno or in certain sectors of the historic center (Santa Croce, Santo Spirito, San Niccolò) can offer a dual promise: capital preservation in a city considered an international “blue-chip” market, and potential capital gains driven by scarcity, heritage protection, and constant appetite from international buyers.

For an investor keen on short-term rentals, the most prudent strategy is to avoid speculative purchases in the UNESCO center without an existing license, and to favor properties outside the frozen zone, in well-served and attractive neighborhoods, while anticipating the possibility of a later switch to long-term rentals if the framework tightens.

Good to know:

The Florentine real estate market rewards long-term strategies rather than short-term opportunism. A context of still reasonable interest rates, sustained international demand, and structurally limited supply creates an interesting window for arbitrating between immediate yield and future appreciation.

Investing in real estate in Florence is not just about buying in an art city: it is about positioning yourself in a sophisticated, competitive, and regulated market, where a good knowledge of neighborhoods, rules, and numbers makes all the difference between a simple “love-at-first-sight” purchase and a truly high-performing investment.

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Cyril Jarnias

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.

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