ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
1.3 Proposals for Reform A draft of tax reforms, including changes affecting VAT on real estate transactions, particularly for residential properties, is being introduced in Italy. These changes are driven by Law No 111/2023, which empowers the government to reform the tax system. The VAT reform should broaden the VAT upon option (in lieu of the VAT exemption) in case of lease of residential properties in order to align the VAT regime of residential leases with the VAT regime of leases of commercial properties (for which any landlord can opt for VAT). The amendment aims to eliminate the negative impact of VAT-exempt leases on VAT deductions and to foster investment in residential properties built to rent. 2. Sale and Purchase 2.1 Categories of Property Rights The categories of property rights that can be acquired are: • absolute freehold or full ownership ( piena pro- prietà ): the right to fully enjoy and dispose of the property; • right to build or surface right ( diritto di superficie ): the surface right is either the right to build on a third party’s property and, subsequently, to pur - chase the property of the building built, or the right to sell the existing building separately from the land itself; • beneficial interest ( diritto di usufrutto ): the right to enjoy a third party’s real estate for a specific and limited period of time; • right of use ( diritto d’uso e di abitazione ): the right to use real estate in order to meet the needs of the person holding the right and those of their immedi - ate family; and • long lease ( diritto di enfiteusi ): the right to enjoy a property owned by a third party, similar to those granted to a full owner. Standard Italian transactions refer to the sale and pur - chase of absolute freehold/full ownership.
approximately 5,500 square metres – the build - ing hosts one of Italy’s most prestigious financial institutions and holds LEED Platinum, WELL Gold and BREEAM In-Use Excellent certifications. The transaction ranks among the most significant office deals of the year in Europe’s prime segment. In terms of the new trends in the market, start-ups and venture capital firms are increasingly focused on enhancing the tokenisation of real estate assets. This innovation aims to boost market liquidity and enable greater investment fragmentation. While these tech - nologies are still in the early stages of implementation, they hold significant potential to emerge as a viable alternative investment channel for small to medium- sized projects, accessible to both retail and institu - tional investors. Furthermore, Italy continues to play a leading role in European real estate crowdfunding, ranking among the largest markets on the continent. By July 2025, real estate crowdfunding in Italy experienced significant growth, with a total of EUR850 million raised through real estate equity/lending crowdfunding platforms. Additionally, in the real estate equity crowdfunding segment, annual fundraising reached EUR63.8 mil - lion in the period July 2024–June 2025, representing a year-on-year increase of 32%. The conversion of underperforming office stock into residential use has gained traction in Italy, driven by the twin pressures of structurally weak demand for secondary office space and a chronic undersupply of housing in major urban centres. In Rome, competition between office and hospitality uses in prime locations, combined with ongoing conversions to residential and hotel schemes, is further compressing supply and supporting rental growth. Since 2024, and throughout 2025, the Milan real estate market has been facing a slowdown due to ongoing investigations by the Public Prosecutor’s Office into alleged illegal construction activities linked to sev - eral development projects, an issue that continues to affect the market.
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