Italy's Real Estate Market 2025: prices, incentives, and green housing.
An overview of the latest trends and developments shaping the Italian real estate market in 2025, including prices, tax breaks, green mortgages, and foreign investment.
The 2025 Budget law has introduced several changes affecting the property sector, including tax incentives, building bonuses, rental regulations, and judicial auctions.
Although the market is showing signs of recovery, with growth in both property sales and rental demand, there is increasing focus on sustainability in alignment with European regulations.
A key part of the "Fit for 55" reform package, which aims to reduce greenhouse gas emissions by 55% by 2030 and achieve climate neutrality by 2050, is the EU Directive 2024/1275 on Energy Performance of Buildings (EPBD), also known as the "Green Homes Directive."
Buyers and investors alike are increasingly choosing energy-efficient, environmentally friendly properties.
Let's explore the key trends, data, and regulatory updates shaping the Italian housing landscape.
Highlights of the Budget law 2025
In summary, the 2025 Budget law for the Real Estate sector established:
- First home incentives confirmed:
- 19% IRPEF deduction on interest paid on mortgage loans, up to €4,000 per year.
- Deadline for selling an existing home before purchasing a new one extended from 12 months to 2 years, easing the transition for homebuyers.
- Adjustment of building bonuses:
- For primary residences, a 50% deduction on renovation, energy efficiency, and seismic upgrades (Renovation Bonus, Ecobonus, Sismabonus).
- For second homes and other properties, the rate drops to 36%.
- From 2026, the rate will be lowered to 30% for all properties, with a €48,000 spending cap.
- Tighter rules for short-term rentals:
- New registration and monitoring requirements for platforms like Airbnb.
- Expansion of the first home guarantee fund:
- Enhanced to facilitate access to credit for first-time buyers.
- Judicial auction market support:
- Tax relief on registration fees and mortgage loans for properties purchased via judicial auctions.
- Furniture bonus extended:
- The 50% tax deduction for purchasing furniture and large appliances for renovated properties is confirmed for 2025.
Real Estate Market trends in 2025
According to data from immobiliare.it, a review of the first half of 2025 shows:
- Rising Sale Prices:
As of May 2025, the average asking price for residential properties in Italy is €2,104 per square metre, a 2.73% increase from May 2024. - Higher Rental Rates:
The average monthly rent is €14.22 per square metre, marking a 7.73% rise over the previous year. - Sales Rebound:
In 2024, residential property sales totalled 719,578, a 1.3% increase from 2023, indicating renewed buyer confidence.
Green homes: the new residential standard
Demand is growing for high-quality, tech-integrated, low-impact homes.
Properties with top energy efficiency ratings (Class A and B) now command a premium of approximately €500 per square metre over lower-rated homes.
Under EU rules, residential buildings must reach at least Energy Class E by 2030 and Class D by 2033, driving a widespread renovation of Europe's building stock.
Green mortgages, favourable loans designed to support the purchase and energy-efficient renovation of homes, including those bought at auction, are becoming increasingly popular.
What are green mortgages and who can apply?
Green mortgages are loans tailored for buying, building, or renovating energy-efficient properties.
They offer more favourable terms than traditional loans, including:
- Lower interest rates
- Up to 100% financing
- Additional bonuses for achieving high energy classes
Available through many Italian and European lenders, these loans are often supported by the First Home Guarantee Fund.
Buyers are rewarded for choosing energy-efficient homes or upgrading an older property.
Foreign buyers may also access these mortgages, subject to eligibility.
Non-compliant properties may qualify for financing only if intended as a primary residence and upgraded post-purchase.
Energy upgrades improve comfort, cut utility bills, and boost market value.
Foreign investment in italian Real Estate
Experts agree that Italy remains a prime destination for foreign property buyers.
This growing interest is energizing the second-home market in tourist hotspots and creating investment opportunities in heritage buildings and hospitality.
According to Tecnocasa Group's research, foreign buyers accounted for 9.5% of all real estate transactions in 2024.
Gate-away.com's Global Buyer Survey 2025 shows that international buyers are drawn to Italy not just for financial reasons, but for its romantic image and quality of life.
Top buyer origins:
- United States
- United Kingdom
- Germany
- France
Other countries with growing interest include Canada, the Netherlands, Belgium, and Sweden.
Tuscany remains the most popular region, while Sicily is gaining attention.
The most attractive properties are eco-friendly, renovated, and ready-to-move-in homes.
If you need guidance on purchasing a home or support with buying or selling property in Italy, don't hesitate to contact our Real Estate Department for expert advice.
FAQ
How are real estate prices evolving in Italy in 2025?
Home prices in Italy are continuing their moderate growth trend. As of 2025, the average sale price is up 2.73% from 2024, with sharper increases in major cities and tourist areas.
What is a "green home" and why is it a smart investment?
Green homes are properties with Class A or B energy ratings. They offer lower utility bills, tax benefits, access to green mortgages, and higher resale value. The market increasingly favours these sustainable options.
How does the Green Homes Directive affect Italy's property market?
The EU's EPBD requires residential buildings to achieve Energy Class E by 2030 (and Class D by 2033). This is accelerating renovations and interest in energy-efficient homes.
Where is it best to buy property in Italy in 2025?
Cities like Milan, Catania, Palermo, and Olbia are experiencing growth. Tuscany and Sicily are top regions, especially for foreign buyers seeking second homes or historic properties to renovate.
Is it worth investing in Italian real estate in 2025?
Yes. Low interest rates, housing incentives, growing foreign demand, and green property opportunities make 2025 a strategic year for investment.
Can foreigners buy property in Italy?
Absolutely. Foreign investors can even access green mortgages, provided they meet certain conditions. Italy remains one of the most sought-after destinations, particularly among Americans, Brits, and Germans.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
