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How to Get a Mortgage in Italy: A Step-by-Step Guide

Buying property in Italy is an exciting journey, whether you’re moving there, looking for a second home, or making an investment. If you need a mortgage (mutuo), the process can seem a bit daunting, especially if you’re not familiar with the Italian banking system. This guide will walk you through everything you need to know, in a clear and simple way.


1. Understanding Mortgages in Italy

Mortgages in Italy come in different types, so it’s important to choose the right one based on your financial situation and long-term plans.

🏡 Fixed-rate mortgage – The interest rate stays the same for the entire loan term, making it a safer option if you prefer stability.
📉 Variable-rate mortgage – The interest rate fluctuates based on market trends, which can mean lower payments at times but also potential increases.
🔄 Mixed-rate mortgage – A combination of fixed and variable rates, usually starting as fixed and switching to variable after a few years.
💰 Interest-only mortgage – This is less common, but some banks allow you to pay only the interest initially, with the full amount due later.


2. Who Can Apply for a Mortgage in Italy?

Both residents and non-residents can apply for a mortgage, but the conditions vary:

Italian residents – Usually get the best terms, with loans covering up to 80% of the property’s value.
EU citizens & foreigners with Italian residency – Similar advantages to residents, as long as they have stable income in Italy.
Non-residents – Can still get a mortgage, but banks are more cautious. Typically, they finance only 50%-60% of the property value, and interest rates may be slightly higher.

💡 Tip: Some Italian banks specialize in mortgages for foreigners, so it’s worth shopping around!


3. What You Need to Apply for a Mortgage

Italian banks require a set of documents to evaluate your mortgage application. Here’s what you’ll typically need:

📌 Valid ID – A passport or Italian ID card.
📌 Codice Fiscale (Italian Tax Code) – Essential for any financial transactions in Italy. You can get it from the Agenzia delle Entrate or your consulate.
📌 Proof of Income – Recent salary slips, an employment contract, or tax returns if you’re self-employed.
📌 Bank Statements – Usually from the last 3-6 months, to prove financial stability.
📌 Credit History – Some banks check your credit score, especially if you’re applying from abroad.
📌 Deposit – You’ll typically need at least 20%-50% of the property’s value, depending on your residency status.
📌 Property Documents – The seller must provide official paperwork confirming the property’s legal standing.

💡 Tip: Some banks might require life insurance as part of the mortgage agreement, so be prepared for that possibility.


4. How to Apply for a Mortgage

Once you’ve found the perfect home, here’s how the mortgage process works:

Step 1: Choose the Right Lender & Get Pre-Approval

🏦 Compare different banks or work with a mortgage broker who can help you find the best deal.
📋 Getting pre-approval (approvazione preventiva) gives you an idea of how much you can borrow before committing to a property.

Step 2: Submit Your Application

📑 Provide all the required documents, including proof of income, tax records, and details about the property.
🔎 The bank will analyze your financial situation to determine if you qualify.

Step 3: Property Valuation & Legal Checks

🏡 A surveyor (appointed by the bank) will inspect the property to confirm its value.
📝 The bank will check for any legal issues, such as outstanding debts or disputes on the property.

Step 4: Approval & Signing the Mortgage Contract

✅ Once approved, the bank will issue a binding offer, detailing the loan amount, interest rate, and repayment terms.
✍️ You will sign the final mortgage agreement in front of a notary (notaio), along with the property purchase deed.

Step 5: Funds Transfer & Final Steps

💰 The bank releases the loan amount—either directly to the seller or through an escrow process with the notary.
🏡 Congratulations! The property is officially yours, and the mortgage is now active.


5. Costs & Fees to Consider

In addition to your deposit and monthly payments, here are some extra costs to keep in mind:

💶 Bank fees – Usually 1%-2% of the loan amount.
📜 Notary fees – Typically 1%-2% of the property price.
🏛 Registration taxes & stamp duty – Costs vary based on the property type and whether you’re a resident.
🏡 Surveyor fees – Around €300-€500 for the property valuation.
💼 Mortgage broker fees – If you use a broker, they may charge a commission.

💡 Tip: Some banks offer special deals for first-time buyers, so ask about any promotions or fee reductions!


6. Tips for a Successful Mortgage Application

✔️ Show stable income – Banks prefer applicants with a steady job or a well-established business.
✔️ Improve your credit history – If possible, pay off any debts before applying.
✔️ Work with a local expert – A mortgage broker or real estate agent can help navigate the process, especially if you’re a foreign buyer.
✔️ Consider a higher deposit – Offering more upfront can improve your chances of approval and may secure better interest rates.

Tax regime for new residents – 2024 version

Italy’s “Regime Impatriati” is a special tax incentive designed to attract professionals to relocate to Italy by offering significant tax benefits. Recent legislative changes have modified the requirements and benefits of this regime, effective from January 1, 2024. Here’s an overview of how the regime functions starting in 2025:

Eligibility Criteria:

  1. Non-Residency Requirement: Individuals must not have been tax residents in Italy for at least three tax periods prior to the year they become Italian tax residents.
  2. Employment in Italy: The individual must be employed or self-employed in Italy.
  3. Duration of Stay: The individual must commit to residing in Italy for at least four years.

Tax Benefits:

  • Income Tax Reduction: Eligible individuals can benefit from a 50% reduction in taxable employment or self-employment income, with a maximum cap of €600,000 per year.
  • Duration of Benefits: The tax benefit applies for the tax year in which the individual transfers their tax residency to Italy and extends for the following four years, totaling five years of tax incentives.

Additional Considerations:

  • Highly Qualified Professionals: The regime is particularly aimed at highly qualified or specialized individuals, aligning with definitions similar to those for a Schengen Blue Card.
  • Inter-Company Transfers: The regime also applies to individuals transferring within the same corporate group, provided specific conditions are met.

These changes aim to attract international talent and encourage the return of Italian citizens by offering substantial tax incentives.

Tax Treatment of Expense Reimbursements for Professionals in Italy: 2025 Updates

As of January 1, 2025, significant changes have been introduced regarding the tax treatment of expense reimbursements for professionals in Italy. These changes stem primarily from Legislative Decree No. 192/2024 and the 2025 Budget Law.

Reimbursement of Itemized Expenses for Professionals

Expenses incurred by professionals while carrying out an assignment, when reimbursed on an itemized basis by the client, no longer contribute to taxable self-employment income. As a result, these reimbursements:

  • Are no longer subject to withholding tax.
  • Are not subject to pension fund contributions.
  • Remain subject to VAT, as they do not qualify as expenses incurred on behalf of the client under Article 15 of Presidential Decree No. 633/1972.

To benefit from this tax treatment, expenses must be:

  • Incurred in the interest of the client.
  • Documented in a detailed and itemized manner.
  • Paid using traceable payment methods, such as credit cards, bank transfers, or other electronic payment systems.

If the client fails to reimburse the professional, these expenses may still be deductible under specific conditions, such as in cases of client insolvency or the expiration of the credit claim.

Mandatory Use of Traceable Payments

The 2025 Budget Law has introduced a mandatory requirement to use traceable payment methods for the deductibility of travel and representation expenses. This requirement applies to professionals, employees, and businesses. Affected expenses include:

  • Hotel accommodations.
  • Meals and beverages.
  • Travel and transportation expenses, including taxi services and car rentals with drivers.

If these expenses are not paid using traceable methods, they will not be deductible from taxable income. For employees, reimbursements for such expenses will become taxable for both income tax and social security purposes.

Impact on Professionals Under the Flat-Rate Regime

The new regulations do not appear to apply to professionals operating under the flat-rate tax regime, as the changes specifically affect Article 54 of the Italian Income Tax Code (TUIR), which governs self-employment income determination under the ordinary and simplified regimes.

Conclusion

These new provisions aim to enhance financial transparency and combat tax evasion by enforcing the use of traceable payment methods for the professional and business expenses.

Special Italian TAX regime for University Professors and Researchers : just 10% is taxed

The special Tax Regime ( art. 44 L. n 78/10 ) refers  to the income from employment (or self-employment) produced in Italy for University teaching and research activities. For such income, just its 10% is taxable.

The regime applies from the tax period when  the teacher or researcher becomes fiscally resident in Italy, with these further conditions for access:

• Be in possession of a university degree or equivalent;

• Have not been occasionally resident abroad;

• Have carried out documented research or teaching abroad at public / private research centers or universities for at least 2 continuous years;

• Carry out teaching or research activities in Italy;

• Acquire tax residence in the Italian territory.

Duration of the regime : year of return + 5 more years . In the case of more children and / or property purchases , it can reach up to 13years

In the event that the person moves his residence in Italy, but continues to carry out research or teaching activities abroad, the benefit is limited to the  income received in Italy as a teacher or researcher. Foreign income will thus  ordinarily be subject to Italian taxation, with a  tax credit for taxes paid abroad . ( Article 165 DPR 917/86.)

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