Foreign Investors Are Pushing Italy’s Luxury Real Estate Market to New Highs in 2025–2026

In 2025, a single transaction in Sardinia—in the iconic Costa Smeralda area—sparked a major shift in the luxury market. The property sold for €185 million, making it Italy’s largest residential deal on record. The buyer was not Italian, and the trend is becoming clearer: international clients are increasingly at the center of the country’s most eye-catching price milestones, stretching from Milan’s centro storico to the shores of Lake Como.

Acting as broker, Italy Sotheby’s International Realty closed 2025 with nearly €1 billion in deal volume. Revenue rose by 68%, while inquiries topped 32,000.

According to the agency, foreign buyers account for roughly 70% of transactions in the top end of the market.

Price growth, not volume: what has actually changed

In 2025, foreigners purchased around 39,000 homes in Italy—just 5.1% of all residential market transactions. For context, back in 2007, foreign buyers represented about 17%.

The key difference of recent years isn’t how many international buyers are purchasing—it’s how much they are willing to pay.

A report from Engel & Völkers (the Italy report) notes that, on average, international clients make up 35% of the ultra-premium housing segment. In many of the top locations, a significant share of deals still closes without using financing.

When credit is involved, however, ticket sizes climb quickly. Luxforsale Finance, which arranges mortgage solutions for foreign buyers of Italian luxury property, reported a +63% increase in applications from overseas clients during the first five months of 2026. Over a year, the average financed transaction grew from €14.59 million to €21.4 million.

Demand is most concentrated in the ultra-premium tier. Gate-away says interest in homes priced above €3 million in Versilia surged by 94.74% year over year. Meanwhile, Dreamer Real Estate reports that 38% of all requests in Tuscany and comparable areas in 2025 were for assets from €5 million.

Where records are falling: Costa Smeralda, Como, and the Tuscan coast

Costa Smeralda remains the price leader. Prime properties here can reach up to €32,000 per sq m. It’s also one of the most internationally influenced markets: 80% of buyers are international clients.

That’s where the €185 million transaction makes perfect sense. Coastal villas are in short supply, and the pool of wealthy buyers continues to expand.

A similar logic—scarcity plus highly mobile capital—drives the market on Lake Como. Today, it’s among the world’s top five destinations for luxury second homes, alongside the French Riviera and Aspen.

A lakeside house with direct access typically costs around €2.5 million, while historic villas with private docks and landscaped gardens can climb as high as €30 million.

On the Tuscan side, Versilia is gradually becoming Italy’s third-largest luxury real estate market. Estimates for high-end inventory exceed €4 billion.

Forte dei Marmi acts as a cornerstone of the segment: average premium pricing sits near €16,100 per sq m, about 17% above 2019 levels. Land around Roma Imperiale often trades for more than €20,000.

Milan is also setting its own benchmarks. Price momentum is supported by relocation-driven buying from affluent families. In Brera, a duplex deal reportedly closed at $28 million.

If in 2020, a $1 million budget bought roughly 60 sq m in Milan’s premium districts, by late 2025 it was closer to 45.8 sq m. Meanwhile, premium pricing growth in mid-2025 reached 7% year over year—one of the strongest figures among Europe’s major markets.

Who buys Italy’s luxury real estate—and why they may hesitate

Across most rankings, Americans lead: they account for about one quarter of all overseas requests and roughly one fifth of Sotheby’s international client base. For many of them, Italy is the second most popular real estate destination worldwide, right after the United States.

UK demand rose by 23% in 2025. After the non-dom regime was removed, more affluent residents began looking beyond their home jurisdiction. On the northern lakes, Germany and Switzerland remain strong, while the fastest-growing new cohorts include buyers from India, Brazil, and the UAE. Their preferences often lean toward standalone villas and maximum privacy.

Increasingly, the purchases aren’t just “vacation homes”—they’re tied to relocation plans. Many deals come with residency-status questions and the need to align the purchase with legal grounds for living in Italy.

Italy’s tax approach also shapes demand, thanks to its “flat-rate” logic: for foreign-sourced income, there is a tax of €300,000 per year for up to 15 years. Since 2017, around 4,000 people have participated. Interest has broadened as well: demand has expanded from Milan toward Rome, Tuscany, and Como, as supply in prime areas becomes tighter.

For non-EU citizens, one route is through an Investor Visa: the minimum investment is €250,000 in an innovative startup, and there is no requirement for a minimum stay period. In 2025, applications reached a record 209.

Important caveat: for non-EU citizens, “buying for status” doesn’t automatically work. Residency status typically requires the right combination of the purchase and a residency mechanism—deal structure and the relocation pathway should be planned in advance.

What’s next: market consolidation and rising interest in relocation structures

Forecasts point more toward consolidation than a correction. Across the country, luxury prices are expected to rise by about 1.5% in 2026. In Milan and Rome, growth could be 3–7%. In addition, several Italian destinations are already entering the world’s top 30 markets for demand from UHNWIs (ultra-high-net-worth individuals).

For anyone considering a real estate purchase in Italy, the location and the property itself matter—but so does the sequence of steps. Residency status, the tax option, and the purchase structure interact with each other and can change the economics of the entire plan.

To understand how an Italian property purchase could fit your residency and tax situation, contact Vignale Capital for a confidential consultation. The firm advises high-net-worth families on Italian residency pathways, investment structuring, and choosing a flat-tax regime—from application planning to relocation.

Expert insight: In Italy’s luxury real estate, “value” is often driven less by square meters and more by legal and operational readiness—especially in coastal and lakefront areas where zoning rules, land registry constraints, and restoration requirements can significantly affect timelines. As a result, the best-performing assets in 2025–2026 are frequently those where due diligence has already cleared structural issues and permits, allowing buyers to move from agreement to ownership with fewer surprises. This is one reason international capital is increasingly favoring well-documented properties, even if the asking price appears higher at first glance.

If you’re looking at Italy not only as a place to buy premium property, but as a long-term investment in your status, consider investment-based residency options that can connect capital, residence, and broader opportunities in Europe. Digital Nomad helps you assess suitable pathways, prepare the required documentation, and build a clear plan—so your investment in Italy’s top locations supports your immigration goal, not just a one-time purchase.

Our Telegram channel about various types of Greek residence permits, digital nomad programs, and the Greek Golden Visa: @digitalnomadgr