Buying in Italy as a US Citizen

Picture a kitchen in Ohio on a Sunday afternoon. On the laptop, a farmhouse in the hills. On the table, last year’s tax return. Two sets of paperwork, from two countries, are about to meet.

The Journal sets out both layers from official sources and states what it does not cover. Readers with other nationalities will find the Italian parts, and the comparison with HMRC and other tax authorities, relevant too.

Can a US citizen buy property in Italy?

Italy’s rule on foreign buyers turns on reciprocity, not on a list of permitted nationalities, as “How a Foreigner Buys Property in Italy” explains. The Italian Ministry of Foreign Affairs says that citizens of the EU and the EEA are treated as Italian citizens for this purpose and need no reciprocity check.^[3] Certain permit holders are treated in the same way, for example holders of a residence permit for employment, self-employment, family or study reasons.^[4]

For other non-EU citizens the notary checks reciprocity case by case, if need be with the Ministry of Foreign Affairs, according to the Consiglio Nazionale del Notariato (CNN), the national council of the Italian notaries.^[1] The Ministry adds that the check is not made for nationals of States with which Italy has a bilateral investment treaty, because the treaty is taken to establish reciprocity for the matters it covers.^[5] It also says that its country information is indicative and has no legal value.^[6]

Then there is the treaty. The 1948 US–Italy Treaty of Friendship, Commerce and Navigation, in force since 26 July 1949, has an article on property.^[2] Article VII(1) says that nationals of each country “shall be permitted to acquire, own and dispose of immovable property” in the other.^[7] For US nationals in Italy, the right is on terms no less favourable than those given by the US state where the national is domiciled to Italian nationals, and Italy need not give US nationals more extensive rights than it gives its own.^[7] Article VII does not say how a notary applies it in practice, and the Ministry’s page on bilateral investment treaties does not mention this treaty.

The Journal therefore does not state that a US citizen is exempt from the reciprocity check. A law firm’s note of September 2025 says that reciprocity exists between Italy and the US and that Americans can buy without restrictions linked to nationality. That is a secondary source.^[8] The notary, who is responsible for the check, gives the answer for the individual case.

What does the Italian purchase look like?

A purchase runs through an offer, a preliminary contract and a notarial deed, and requires an Italian tax code, the codice fiscale, which a person abroad can request through a delegate or an Italian consulate. Payment must be traceable and is described in the deed, and the notary applies anti-money-laundering checks.

These steps are described in “How a Foreigner Buys Property in Italy”, “The Bank Account and the Source of Funds” and “The True Cost of Buying a Home in Tuscany”. A power of attorney used to sign for the buyer must meet the formal requirements described in the first of those articles.

What must a US citizen report about accounts and assets?

A US citizen is subject to US reporting wherever they live. The rules most relevant to a purchase in Italy are set out below.

When does the FBAR apply?

A US person with a financial interest in, or signature authority over, foreign financial accounts must file an FBAR if the aggregate value of the foreign accounts exceeded $10,000 at any time during the calendar year.^[9][10] It is filed electronically with FinCEN, the Financial Crimes Enforcement Network, and not with the IRS. It is due on 15 April, with an automatic extension to 15 October.^[10]

When does Form 8938 apply?

Form 8938 is a separate filing. A “specified individual” with specified foreign financial assets above a threshold files it with the income tax return. The thresholds depend on where the filer lives.^[11]

The thresholds for married couples filing jointly are doubled. A married person filing separately follows the thresholds for unmarried persons.^[11] “Living abroad” is defined in the Form 8938 instructions: a tax home in a foreign country plus either bona fide residence abroad for an uninterrupted period that includes a full tax year, or at least 330 full days abroad in 12 consecutive months.^[13]

Does the house itself have to be reported?

The IRS comparison table lists financial accounts at foreign institutions, foreign stock or securities not held in an account and foreign partnership interests as reportable on Form 8938, and foreign accounts as reportable on the FBAR.^[14] It states that foreign real estate held directly is reportable on neither form.^[14]

Real estate held through a foreign entity is not itself reported. The entity’s interest, however, is a specified foreign financial asset on Form 8938, and its maximum value includes the property.^[14]

What about an Italian bank account?

An account opened in Italy is a foreign financial account for these purposes. “The Bank Account and the Source of Funds” explains when an account is needed.

What are the penalties?

According to the IRS, failure to disclose on Form 8938 carries a penalty of up to $10,000, with further amounts for continued non-filing after IRS notice, up to $60,000.^[15] For the FBAR the penalties are civil, adjusted each year, and higher if the failure is wilful.^[15]

How does Italy report accounts to the United States?

Italy and the United States have an intergovernmental agreement under FATCA, the US Foreign Account Tax Compliance Act. Italian financial institutions report accounts of US persons to the Agenzia delle Entrate, the Italian revenue agency, which exchanges the information with the IRS.^[16][17]

How do the US and Italian tax systems meet?

The United States taxes citizens on worldwide income. The US–Italy convention keeps this rule through its saving clause, which allows each State to tax its residents and citizens as if the convention did not exist. The Treasury’s Technical Explanation gives the example of a US citizen resident in Italy.

What about income from the property?

The convention lets the State where the property is situated tax income from it, including rent and the value of use by the owner.^[18] It does not stop the United States taxing the same income of a US citizen. A US citizen who lets an Italian property reports the rent in the United States, on Schedule E, the IRS form for rental income from any location.^[19] Mortgage interest on a loan taken to buy a rented property is treated as a rental expense.^[20]

What about a sale?

The State where the property is situated may tax gains from its sale.^[21] IRS Publication 523 on selling a home sets out the US rules on gains and on the exclusion for a main home.^[22] How they apply to a home abroad is not covered here.

Is there relief for Italian tax?

The convention obliges the United States to allow a credit against US tax for Italian income tax paid, within the limits of US law.^[23] The IRS states that a credit is available for income, war-profits and excess-profits taxes imposed by a foreign country, claimed on Form 1116.^[24] Where a treaty reduces a foreign tax, only the treaty-reduced amount qualifies. A taxpayer may choose a deduction instead.^[24]

IMU, the Italian municipal property tax, is a tax on ownership rather than on income. The Journal makes no statement on whether it qualifies for the credit.

Does the flat tax change this?

A US citizen who becomes tax resident in Italy and chooses the regime described in “Italy’s Flat Tax for New Residents: What It Means for a Move to Tuscany” still remains subject to the US rules above. The Technical Explanation deals with the position of US citizens resident in Italy.^[25] This article does not summarise it.

How is a purchase financed?

An Italian mortgage is a loan secured by a mortgage over the property, in euro, from an Italian lender, as “Mortgages for Non-Resident Buyers” describes. The regulatory ceiling for a home-purchase loan secured on the property is generally 80% of its value, and each lender sets its own limits.

Borrowing in the United States against other assets is a different arrangement. It is not covered here and is a matter for a financial adviser.

How long can a US citizen stay?

A US citizen can stay in the Schengen area for up to 90 days in any 180-day period without a visa. The European Commission sets out the rule,^[26] and the United States is on the list of visa-exempt nationalities published by the Italian Ministry of Foreign Affairs.^[27] Owning a home does not extend the permitted stay. A longer stay requires a national long-stay visa, such as the elective residence visa described in “The Elective Residency Visa”, and a residence permit.

The Entry/Exit System, which registers non-EU nationals travelling for a short stay, has been fully operational at the external borders of 29 countries since 10 April 2026.^[28] The travel authorisation ETIAS is not in operation: the European Commission’s ETIAS page, read on 1 October 2026, states that no applications are collected and that the start date will be announced several months before the launch.^[29] For the way the days are counted, what the Entry/Exit System records and the position of ETIAS, see “Schengen 90/180, EES and ETIAS for Second-Home Owners in Italy”.

What does this article not cover?

This article is not tax advice. It does not cover US federal estate and gift tax, state taxes, US mortgage terms, entities and trusts as owners, the US retirement-account rules, the Italian tax on rent and on gains for non-residents, or social-security coordination. For succession to an Italian home, see “Who Inherits the House”.