Buying a home in Southern Italy: updated tax incentives (2026)
First home, 7% Flat Tax, subsidized mortgages and renovation bonuses: all the benefits still available in 2026 for buyers in Southern Italy.
In 2026 Southern Italy remains one of the most affordable areas in Europe to buy a home: accessible prices, favorable taxation and a range of active national incentives make the investment especially attractive for those returning from abroad or choosing Italy for retirement.
Main incentives and advantages
"First Home" benefit: registration tax reduced from 9% to 2% and VAT reduced from 10% to 4% on the purchase of your first home.
7% Flat Tax for foreign retirees: foreign pensioners moving their tax residency to specific Southern municipalities under 30,000 residents can pay 7% on foreign income for 10 years.
State-guaranteed mortgage up to 80% for Under 36s: the CONSAP fund has been extended until 2027 for young buyers with ISEE up to €40,000.
Mortgages up to 100% of property value: in some cases partner banks allow near-full financing thanks to the state guarantee.
Renovation bonus up to 50%: tax deductions for renovation works, energy improvements and home efficiency upgrades.
Ecobonus and energy incentives: benefits for windows, heat pumps, solar panels and improving the energy class of the property.
Property prices much lower than the US, Canada and Northern Europe: in many Southern areas you can still buy at extremely competitive prices by international standards.
IMU often very low on primary homes: the main residence generally pays no IMU, except for luxury cadastral categories.
Notary and tax costs lower than many Western countries: Italian real estate transfer taxes can be much lower than in the US, UK and Canada.
The chance to combine tax advantages, quality of life and a lower cost of living: Southern Italy keeps attracting international retirees thanks to climate, lifestyle, healthcare and favorable taxation.
How we help
BackToItaly supports you in choosing the right municipality, assessing the incentives applicable to your case and managing the entire purchase: from due diligence to the deed, up to post-purchase tax setup.
