Buying in Rome vs back home: where the tax hides in the cadastre

Italy can be cheaper to buy into than NSW, or much dearer. It depends less on the price than on who's selling and what the cadastre says the flat is worth.

The short version

• Australians can generally buy in Italy. Non-residents rely on Italy's reciprocity rule; Australians living in Italy on most residence permits are exempt from that check [1].
• The single biggest cost difference: buying a resale flat from a private seller, the 9% registration tax is usually charged on the official cadastral value, not the price, which is often far lower [2]. Buy new from a developer and it's 10% VAT on the full price instead [2]. In NSW, a citizen abroad pays transfer duty on the full price, with no foreign surcharge [3][4].
• Move your residence to Rome within 18 months and the "prima casa" (first home) relief cuts the registration tax to 2% [2].
• Sell within five years and the gain can be taxed, unless the flat was your main home for most of that time [6].

Can an Australian buy in Italy?

Usually, yes. Italian law gives foreigners the same civil rights an Italian would get in their country, a principle called reciprocity [1]. Because Italians can buy homes in Australia, Australians can generally buy in Italy. The notary handling your purchase checks this, and the Foreign Ministry can confirm reciprocity if asked [1].

If you already live in Italy, the check usually falls away. Holders of a long-term residence permit, or a permit for work, self-employment, family or study, don't need it [1].

The citizenship by descent shortcut

Plenty of Australians have Italian parents or grandparents. If you've had your Italian citizenship recognised, you buy as an Italian, with no reciprocity question at all, and you can register with AIRE (the register of Italians abroad). The prima casa guidance even lets Italian citizens living abroad and registered with AIRE claim the first-home relief in some circumstances [2]. Our citizenship guide covers how the descent rules tightened in 2025.

Upfront costs side by side

Rates as at November 2026. Euro amounts with AUD at the Reserve Bank of Australia rate of €0.6228 on 5 November 2026.

The price-value rule, briefly

Buy a home as a private individual from a private seller, ask for it in the deed, and the registration tax is charged on the cadastral value rather than the price. The formula is the rendita catastale (the cadastral income on the property's record) × 1.05 × 120, or × 110 for a prima casa [2]. The tax office then can't argue the value up, provided the real price is in the deed [2]. This is the reason resale purchases in Trastevere or Prati can carry a much smaller tax bill than the price suggests, while a shiny new build in Ostiense pays VAT on every euro.

Getting a loan

In Italy

Italian banks will lend to foreigners, but the path is smoother if you're resident in Italy with an Italian tax code (codice fiscale), an Italian bank account and a local income. Non-resident buyers often find fewer banks interested, a lower loan-to-value and slower approvals. We couldn't verify an official cap for foreign borrowers; it's set bank by bank. Budget for the notary's mortgage deed and the bank's valuation on top of the purchase notary.

Back home

Australian lenders do lend to Australians in Italy, but they shade euro income for currency risk, usually want a larger deposit than from a local borrower, and fewer of them play in this space. You don't need FIRB approval as an Australian citizen buying your own home, and NSW doesn't treat you as a foreign purchaser [4]. Our guides to foreign income and deposits go through how lenders look at an overseas salary.

Holding costs

Rome is one of the big cities widely reported to charge IMU on second homes at or near the 1.06% ceiling [7]. Check Roma Capitale's own resolution for the year before you budget.

The Australian tax overlay

Australia and Italy have a tax treaty [10]. If you're still an Australian tax resident while living in Rome, your Italian rent counts as Australian assessable income, with a credit for Italian tax paid. If you've become a foreign resident, Australia only taxes your Australian-source income.

Selling and tax

Italy

Italy only taxes the gain on a home sold within five years of buying it, and not at all if the flat was your (or your family's) main residence for most of that time [6]. Inherited property is excluded too [6]. If the gain is taxable, you can ask the notary at the deed to apply a flat 26% substitute tax, which the notary pays on your behalf [6]. That rate has applied since 1 January 2020 [6].

One catch for prima casa buyers: the relief comes with conditions, and selling too soon without buying another main home can claw it back. Ask the notary before you sign.

Australia

Sell an Australian property while you're a foreign resident and you generally lose the main residence exemption, even for years you lived there, unless you pass the life events test [8]. Since 1 January 2025, buyers withhold 15% of the price on every Australian property sale unless you provide an ATO clearance certificate by settlement [9].

Currency risk

The euro and the Aussie dollar can move a long way over a decade of ownership. A flat bought in Rome and sold when you move home converts at whatever the rate is that week. Plan for that, rather than hoping.

A worked example

Illustration only. We've used a €620,000 flat (about A$995,500 at the 5 November 2026 RBA rate) and a A$1,000,000 home in NSW. For the Rome resale, we've assumed a rendita catastale of €2,000. Every property has its own figure on its cadastral record (visura catastale), and this one is made up to show the mechanics. Notary, agent and loan costs are left out because they vary.

The cadastral sums: €2,000 × 1.05 × 120 = €252,000, and €2,000 × 1.05 × 110 = €231,000 [2]. The NSW sum: A$11,602 plus 4.5% of A$613,000 [3].

Same budget, four very different tax bills. The resale flat with a modest cadastral value beats NSW; the new build costs more than twice as much in tax.

Which suits whom

Factors to weigh, with no verdict attached:

1. Are you living in Rome? Residence opens the prima casa relief and removes the reciprocity check. A holiday flat bought from Sydney doesn't get either.
2. New or old? New builds carry VAT on the full price; older flats in the centro storico may carry lower tax but bigger renovation bills.
3. How long you'll hold. Five years is the line for Italian tax on gains, unless it's your main home.
4. Rental plans. Long leases, agreed-rent contracts and short lets are taxed differently, and Rome is busy with tourists.
5. Moving home later. A property back home may become your residence; check how the main residence rules apply before you sell from overseas.
6. Inheritance. Italian succession rules give family members fixed shares. A will in each country, drafted to work together, saves grief.

Thinking about buying in Rome? Ask Australians who've done it in Cooee Italy, our Facebook group for Australians in Italy, at /join/.

Sources

1. Foreigners and the notary – Notaio Busani
2. L'acquisto della casa: le imposte e le agevolazioni fiscali (guide, March 2024) – Agenzia delle Entrate
3. How to calculate transfer duty – Revenue NSW
4. Surcharge purchaser duty for individuals – Revenue NSW
5. Circolare n. 10/E del 10 maggio 2024 (cedolare secca and short lets) – Agenzia delle Entrate
6. Plusvalenza sulla vendita della casa entro 5 anni – Notaio Online (updated September 2026)
7. IMU 2026: aliquote, scadenze, esenzioni e calcolo – Dokicasa
8. Main residence exemption for foreign residents – Australian Taxation Office
9. Foreign resident capital gains withholding overview – Australian Taxation Office
10. Countries and jurisdictions that have a tax treaty with Australia (2026) – Australian Taxation Office

Keep reading

• Renting in Rome as an Australian
• Italian citizenship by descent: what Australians need to know
• Foreign income and Australian lenders: how your salary is assessed
• Wills and power of attorney when you live abroad