Investing in overseas holiday lets in Italy means buying property in places like Tuscany, Puglia, or the Amalfi Coast and renting it out to tourists on a short term basis through platforms like Airbnb or Booking.com. For UK landlords, it’s a way to diversify your portfolio, enjoy potential rental yields of 6% to 9%, and own a place in one of the world’s most visited countries.

But here’s the thing: Italy isn’t handing out easy wins anymore. The government cracked down hard in 2024 and 2025, and the rules now look very different from what they were even two years ago.

What UK Landlords Need to Know First

Italy welcomed around 65 million international tourists in 2023. Tourism makes up roughly 13% of the country’s GDP. But that demand brought problems, which brought regulations.

You need three codes before you can legally rent: SCIA (confirming the property meets building codes), CIR (regional identification code), and CIN (national identification code from the Ministry of Tourism, mandatory since late 2024). The CIN must be displayed outside your property and on all advertising.

And as of November 2024, you can no longer use lockboxes for self check in. Guests must be met in person. Rome already started removing unauthorized lockboxes from buildings.

The Numbers: What Can You Actually Earn?

A one bedroom apartment in Ostuni, Puglia might cost €130,000, but you could let it out in August for around €1,000 a week. Even with only 12 weeks rented per year, that’s a gross yield of more than 9%.

In places like Sorrento, Amalfi, and Positano, seafront properties reach €10,000 to €11,000 per square metre. A two room apartment can yield up to €400 per night in summer. Florence offers consistent price growth of around 6.1% year over year combined with strong short term yields.

But occupancy dropped from 78% to 70% nationwide according to AirDNA data, with Rome sitting around 65%. The golden years of easy Airbnb money are behind us.

Tax: The Part Nobody Wants to Talk About

Italian taxes: Rental income from Italian property is taxed in Italy regardless of where you live. You can opt for a 21% flat rate tax (Cedolare Secca) on your first short term rental property. As of January 2025, a second, third or fourth property gets taxed at 26%.

UK taxes: The UK Italy Double Taxation Convention prevents you from being taxed twice on the same income. In practice: you pay Italian tax first, then declare the income on your UK return and claim a foreign tax credit. If Italian tax is lower than your UK liability, you pay the difference to HMRC.

The mismatch between tax years creates headaches. UK runs 6 April to 5 April; Italy follows the calendar year. Same income might fall into different tax years in each country.

Where Should You Buy?

Tuscany remains the most popular region. Florence, Siena, and Lucca have strong rental demand and consistent price growth. But you’ll pay premium prices, especially in Chianti.

Puglia offers prices 30% to 40% below Tuscany with rising appreciation. Direct flights to Bari and Brindisi connect the region to major European cities. Polignano a Mare reaches up to €3,500 per square metre and Gallipoli up to €3,000 per square metre.

The Amalfi Coast commands the highest prices. If you want to rent a villa on the Amalfi Coast, you’ll see what the competition looks like. Locations such as Sorrento and Positano reach €10,000 to €11,000 per square metre on the seafront.

Cheaper alternatives include Calabria (€600 to €1,500 per square metre) and Abruzzo, where seafront homes in places like Roseto degli Abruzzi reach around €4,500 per square metre.

The Regulations That Will Affect You

Italy’s government is actively discouraging short term rentals. Venice, Florence, Rome, and Milan now limit new tourist rental licenses in their historic centres and charge higher surcharges on non resident owners.

Safety requirements became mandatory in November 2024: devices for detecting combustible gases and carbon monoxide, plus portable fire extinguishers with documented maintenance.

Renting out more than 4 units reclassifies the activity as a business, requiring a VAT number, business registration, and full social security compliance. Fines range from €2,000 to €8,000 per property for unlicensed short lets.

Should You Actually Do This?

Short term rentals still offer high returns of 6% to 8% net but come with regulation risk. Long term rentals are increasingly appealing: less management, lower risk, stable income.

For UK landlords facing stamp duty increases at home (the surcharge went from 3% to 5% in late 2024), Italy might look attractive. Mortgage rates have fallen since mid 2024, with APRs averaging around 3.5%.

But understand what you’re getting into. You’ll need a local tax advisor who understands both UK and Italian systems. You’ll need someone on the ground to manage the property and meet guests. You’ll need to comply with regulations that keep changing. And you’ll need capital, because Italian banks typically require 20% to 40% down payments from non residents.

Don’t buy based on dreams of sipping wine on your terrace between bookings. Buy based on numbers, realistic yield expectations, and a clear understanding of the regulatory environment. If the numbers work after accounting for taxes, management costs, and potential vacancies, then it might be worth your time.

A holiday home and a holiday let are very different things.