Buying Property in Italy Through a Company: When It Makes Sense

Italy remains a top destination for international investors and high-net-worth individuals (HNWIs) seeking to diversify their assets through real estate. The country offers a stable property market, a desirable lifestyle, and—when structured correctly—fiscal and succession planning opportunities. One of the most common strategic questions we receive from foreign investors is: does it make sense to buy property in Italy through a company?

The short answer is: it depends. But under the right conditions, purchasing Italian real estate through a corporate structure, whether domestic or foreign, can provide tangible advantages in terms of tax efficiency, asset protection, estate planning, and operational flexibility. However, it requires careful evaluation of the investor’s goals, residency status, and long-term strategy.

Personal vs Corporate Ownership in Italy

When an individual buys property in Italy, taxation is relatively straightforward: registration tax, cadastral and mortgage duties, local property taxes (IMU), and personal income tax (IRPEF) on rental income if applicable. By contrast, when a property is acquired through a company, the fiscal landscape changes significantly.

If the company is Italian, the property falls under the corporate tax regime (IRES and IRAP), which can be beneficial for buy-to-let strategies or when the property serves as a business asset. In the case of a foreign company (such as a UK Ltd, US LLC, or Luxembourg holding), factors such as double taxation treaties, permanent establishment rules, and anti-abuse provisions under Italian law become relevant.

The Italian tax authority may challenge foreign company structures if they suspect the company is merely a vehicle to disguise personal use or avoid taxes—especially in the absence of clear economic substance or operational logic.

Why Some HNWIs Choose a Corporate Structure

For HNWIs with complex global structures or family offices, using a company to acquire Italian real estate can offer increased flexibility and separation of assets. When part of a well-planned international structure, this setup may facilitate asset segregation, optimize inheritance planning, and provide enhanced privacy and control over ownership.

In some cases, the property is not merely a private residence but is intended for rental income, corporate hospitality, or strategic business use. In those scenarios, corporate ownership may allow for VAT recovery, cost deductibility, and simplified management, especially if the real estate is managed as part of a larger investment portfolio.

However, for individuals planning to move to Italy and benefit from the Italian flat tax regime (€100,000 or €200,000 on foreign income), acquiring property through a foreign company can raise red flags unless the structure is clearly justified and aligned with international standards of substance and transparency.

Common Mistakes to Avoid

A common pitfall is assuming that using a foreign company automatically leads to lower taxes or greater efficiency. In fact, if the Italian tax authority determines that the effective management of the company takes place in Italy (a concept known as “esterovestizione”), the company may be considered an Italian resident for tax purposes, triggering full taxation on global income and possible penalties.

Another mistake is relying on off-the-shelf company structures without proper legal and tax due diligence tailored to the Italian context. This often leads to complications at the notary stage, limits the resale value of the asset, or creates long-term compliance risks.

When It Truly Makes Sense

Buying real estate in Italy through a company makes sense when it is part of a cohesive international wealth structure. It can be an excellent solution for families managing cross-border assets, for investors seeking to consolidate holdings under a holding vehicle, or for those engaged in long-term rental businesses.

In particular, this structure may facilitate intergenerational wealth transfer by simplifying asset transfers through company shares, avoiding probate and reducing inheritance tax exposure in some cases. It may also enable better financing structures, especially for those with access to international capital or private debt instruments.

Final Thoughts

Using a company to purchase real estate in Italy is not a one-size-fits-all strategy. It can be a powerful tool when designed with care, but also a costly mistake if implemented poorly. Whether you are considering a real estate investment in Milan, a villa in Tuscany, or a strategic property in Rome, you need to evaluate your objectives, residency plans, and existing legal structures.

At Knotted, we assist foreign buyers and HNWIs in navigating the complex legal and fiscal framework of Italian real estate. We work with international advisors to ensure your acquisition structure is compliant, efficient, and aligned with your long-term goals.

Contact us at info@knotted.ch or message us on WhatsApp at +41 76 771 30 22 for a confidential consultation.