Real Estate Taxes: What Italy and the U.S. Should Learn From Each Other

​by Piero Lorenzo

After 24 years in real estate—13 years spent in Italy and 11 years in California—I’ve seen both sides of the industry. I’ve helped families in Florence navigate centuries-old notarial traditions, and I’ve guided buyers in California through high-tech closings and title companies. Living in both systems, I’ve asked myself many times how things could improve.
And if I could change one thing in each country by taking inspiration from the other, this is what I would do:

Italy Should Take Inspiration from the U.S.
Buying a new home from a builder in America typically comes with minimal taxation—just minimal closing costs, often shared between the buyer and seller.
In Italy, by contrast, a buyer is forced to pay 20,000 to 50,000 euros in VAT on a €500,000 property, plus notary fees and agency commissions, all at the buyer’s expense. It is a heavy, discouraging burden that slows down the entire market.
Fortunately, when you buy from a private seller in Italy, the taxes are significantly lower—calculated on the cadastral value rather than the full market price—but from a builder, they are exorbitant.

The U.S. Should Take Inspiration from Italy
Because once you own that home in America, you are on the hook for property taxes every single year—whether it’s your first home or your tenth, on a $500,000 property, that’s $5,000 to $9,000 annually, forever.
In Italy, primary homes are exempt from property tax, and even second homes pay only a few hundred euros per year.

The Trade-Off
This is the reality: Italy punishes you up front, while the U.S. keeps charging you year after year. Both systems make homeownership more difficult than it should be, in different ways.

My Message to Policymakers
If I could speak directly to lawmakers, my message would be simple:

• Italy: Reduce VAT on New Builds. Give families a chance to buy without draining their savings at the notary’s office.
• The U.S.: stop taxing people thousands of dollars every year just to live in their only home. Protect families with one primary residence

Yes, governments would lose some revenue. But families would gain purchasing power, builders would sell more homes, and economies on both sides of the Atlantic would thrive.
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After more than two decades working across two continents, I can say this with conviction: real estate should empower families, not punish them.