For Canadian citizens considering property ownership in Sardinia, the legal landscape changed significantly on January 1, 2023, when Canada’s “Prohibition on the Purchase of Residential Property by Non-Canadians Act” came into force. This law restricts foreign buyers from purchasing residential property in Canada, and due to the principle of international reciprocity, Italy now applies equivalent restrictions to Canadian buyers purchasing in Italy, including Sardinia. Understanding these restrictions, the exceptions that apply, and how to structure a purchase legally is essential if you are a Canadian buyer considering Sardinian real estate.
This guide explains what Canadian citizens can and cannot buy in Sardinia after January 2023, how reciprocity affects your purchase, what visa and residency options exist, how the Italy-Canada tax treaty shapes your tax obligations, and the practical strategies available to Canadian buyers who want to purchase beyond the restricted categories. Unlike generic guides, this one addresses the specific Canadian legal framework that now applies to Sardinian property purchases.
What Changed on January 1, 2023: Bill C-19 and Its Impact in Italy
On January 1, 2023, Canada’s “Prohibition on the Purchase of Residential Property by Non-Canadians Act” took effect. This law restricts non-Canadian citizens and entities from purchasing residential real estate in Canada, with limited exceptions. The stated purpose was to help stabilise Canada’s housing market and protect residential properties for Canadian residents.
Italy responded by applying the principle of reciprocity, which is embedded in Italian law and dictates that foreign nationals can exercise civil rights in Italy only if their home country grants equivalent rights to Italians. Because Canada now restricts Italian citizens from buying residential property in Canada, Italian law applies reciprocal restrictions to Canadian citizens buying residential property in Italy, including Sardinia.
However, the application of these restrictions is complex and still evolving. Italian notaries, who must certify all property transfers, have been waiting for formal guidelines from the Italian Notaries Association. In practice, each transaction involving a Canadian buyer is evaluated on a case-by-case basis, creating uncertainty. As of 2026, the legal framework remains in flux, and Canadian buyers should work with a lawyer familiar with both Canadian and Italian law to navigate the specific restrictions.
What Canadian Citizens Can Buy in Sardinia
Canadian citizens can legally purchase residential property in Sardinia under certain conditions. The primary exemption is that Canadian buyers can acquire residential property located in municipalities (comuni) with a population below 10,000 residents, provided the municipality is not part of a major metropolitan area with a combined population exceeding 100,000. Sardinia has many small villages and towns that meet this threshold, making this exemption practically useful for Canadian buyers seeking rural, coastal and village properties outside major population centres.
Additionally, Canadian citizens can purchase residential property in Sardinia if they fall within other exemptions: if they are dual citizens holding both a Canadian and an EU passport (making them eligible as EU nationals); if they are permanent residents of Italy holding a Carta di Soggiorno (Italian long-term residence permit); if they are married to or in a civil union with an EU citizen or Italian permanent resident (allowing joint ownership with an eligible spouse); or if they are acquiring property through transfer by death, divorce, separation or as a gift from a family member, which are not subject to purchase restrictions.
Canadian citizens can also purchase non-residential property in Sardinia without restrictions, including commercial buildings, agricultural land, vineyards, vacant land and other assets not classified as residential.
What Canadian Citizens Cannot Buy Without Meeting an Exemption
Residential property in Sardinian municipalities with populations exceeding 10,000 residents, or in areas that are part of major metropolitan zones, is generally off-limits to Canadian citizens who do not fall within one of the exemptions. This affects many of Sardinia’s largest towns and coastal areas, including parts of Cagliari, popular zones near Costa Smeralda’s main centres, and other developed municipalities. A beautiful villa or apartment in such a municipality cannot be purchased by a Canadian non-resident unless you establish one of the qualifying exemptions.
Legal Pathways for Canadians Who Want Property Beyond the Restrictions
For Canadian buyers who want to purchase residential property in restricted municipalities, several legal strategies exist. The most straightforward is to establish Italian long-term residency by obtaining a Carta di Soggiorno (permanent residence permit). Once you hold this permit, the reciprocity restrictions on Canadian buyers fall away entirely, and you can purchase any residential property in Sardinia without limits.
Another pathway is to obtain EU or EEA citizenship through dual nationality if you have family ties or other eligibility pathways. Many Canadians with Italian, Irish, Greek or other European ancestry can apply for citizenship in those countries, which would grant them EU status and eliminate the purchase restrictions.
A third option is joint ownership with a spouse, civil union partner or family member who holds EU citizenship or Italian permanent residency. The restrictions do not apply if at least one co-owner qualifies as an EU citizen or Italian permanent resident, allowing Canadians to purchase alongside an eligible partner.
A fourth strategy, though more complex, is to purchase through an Italian business entity such as an SRL (limited liability company) incorporated in Italy. Reciprocity restrictions apply to individuals but not to Italian-incorporated companies, which can purchase property without limits regardless of ownership structure. However, this structure creates tax and compliance implications in both Italy and Canada that must be carefully evaluated with a cross-border tax advisor before proceeding.
Residency and Visa Options for Canadian Buyers
Purchasing property in Sardinia does not grant you the right to live in Italy beyond standard tourist visa allowances. Canadian citizens can enter Italy and stay for up to 90 days within any 180-day period without a visa. If you want to establish residency or spend more time on the island, you must apply for a separate residence permit or visa.
The most accessible option for Canadian property owners is the Elective Residency Visa (Visto per Residenza Elettiva), available to those with stable passive income. Current guidance from Italian consulates indicates approximately EUR 31,000 per year in passive income for a single applicant, though this figure varies by consulate and may be indexed annually. You must also provide proof of health insurance and police certificates demonstrating good conduct.
Other options include work visas, business visas, family reunification visas or long-stay visas for specific purposes. Each category has different requirements and processing times. If residency is part of your long-term plan for Sardinian property ownership, consulta with an Italian immigration specialist to determine which visa category best fits your situation and to apply well in advance of your purchase.
Property Purchase Taxes and Closing Costs
When you purchase property in Sardinia, you will pay Italian transfer taxes at closing. The main tax is the registration tax, Imposta di Registro, calculated at 9 percent of the cadastral value for non-resident buyers acquiring residential second homes or investment property. (If you establish Italian tax residency and meet prima casa requirements, the rate can drop to 2 percent, but this requires advance planning and proof of residency status.
In addition to the registration tax, you pay fixed cadastral and mortgage taxes of approximately 50 euros each, notary fees (typically 1 to 2.5 percent of the purchase price for non-residents), and real estate agent commissions (usually 2 to 4 percent). Total closing costs for a non-resident Canadian buyer typically range from 10 to 15 percent of the purchase price.
Canadian Tax Obligations for Property Owners in Sardinia
As a Canadian citizen, you remain subject to Canadian tax on worldwide income regardless of whether you are residing in Canada or abroad. If you purchase property in Sardinia and generate rental income, that income must be reported to the Canada Revenue Agency (CRA) and is subject to Canadian income tax at your marginal rate.
The Italy-Canada Double Taxation Treaty is designed to prevent you from being taxed twice on the same rental income. Under the treaty, rental income derived from Sardinian property is taxed in Italy first, and Canada provides a foreign tax credit against your Canadian tax liability for the taxes you paid to Italy on that income. However, the detailed application of this credit depends on your overall tax situation, and coordination between both tax systems is essential. Many Canadian property owners work with a cross-border accountant or tax specialist to ensure proper reporting in both countries.
If you sell the property at a gain, capital gains tax rules in both Italy and Canada may apply. Generally, under the Italy-Canada treaty, gains from the sale of immovable (real) property are taxed in the country where the property is located, which is Italy in this case. However, you must still report the gain to the CRA, and depending on your tax residency status and the terms of the treaty, you may be entitled to a foreign tax credit or other relief to avoid double taxation.
Special Reporting Obligations: FBAR and FATCA for Canadians
While Canadians do not face the same Foreign Bank Account Report (FBAR) filing requirements that US citizens do, Canadian bank account rules still apply if you open an Italian bank account to manage your Sardinian property. If you maintain a foreign bank account for property expenses and that account exceeds certain thresholds, you may have reporting obligations to the CRA depending on your specific financial profile and any other reporting requirements in the Canada-Italy tax treaty context.
Additionally, if you earn significant rental income or accumulate capital in Sardinia, you should ensure that all funds and assets are properly reported to Canadian authorities. It is advisable to consult with a Canadian tax specialist familiar with Italian real estate to confirm your specific reporting obligations before opening bank accounts or making significant transactions in Italy.
Mortgages and Financing for Canadian Buyers
Obtaining an Italian mortgage as a non-resident Canadian buyer is possible but more difficult than for Italian or EU residents. Italian banks typically view non-resident foreign buyers as higher risk and impose stricter conditions: minimum down payments of 40 to 50 percent of the purchase price; maximum loan-to-value ratios around 50 to 60 percent; higher interest rates; and extensive documentation requirements including proof of Canadian income, tax returns, employment contracts and sometimes personal guarantees.
The application and approval process can take several weeks to several months, and not all Italian banks lend actively to non-residents. For this reason, many Canadian buyers choose to purchase with cash from savings or investments, or to arrange financing in Canada through a mortgage on existing Canadian property or other Canadian financing sources. Some Canadian lenders offer mortgages for foreign property purchases, though terms and interest rates may be less competitive than domestic Canadian mortgages, and currency exchange risk must be managed if you are borrowing in Canadian dollars to purchase in euros.
Managing the Transaction Remotely from Canada
Most Canadian buyers do not relocate to Italy before purchasing. The entire transaction can be managed remotely using email, video calls and remote legal assistance. Your lawyer in Sardinia obtains documents, performs due diligence, negotiates the preliminary contract and coordinates with the notary. You review reports, approve decisions and sign documents via email or through a power of attorney granted to a trusted representative who can sign on your behalf at the notary.
Many Canadian buyers find a hybrid approach effective: visiting Sardinia once to view properties and meet advisors in person, then managing subsequent stages remotely. A notarial escrow account adds security when paying large sums remotely; funds are held by the notary until specific conditions are met, such as successful registration of the deed and clearance of any outstanding liens or title issues.
The combination of remote legal work, notarial escrow and a properly drafted power of attorney makes it possible to complete a Sardinian property purchase securely from Canada.
Frequently Asked Questions for Canadian Buyers in Sardinia
Can Canadians buy residential property in Sardinia
Yes, but subject to restrictions from Bill C-19 and reciprocity. Canadian citizens can purchase residential property in municipalities with fewer than 10,000 residents, or if they qualify under an exemption such as dual EU citizenship, marriage to an EU citizen, Italian permanent residency or inheritance.
What if I want to buy in a larger town or metropolitan area in Sardinia
If the municipality has more than 10,000 residents or is part of a major metropolitan zone, you generally cannot purchase residential property unless you qualify for an exemption. Options include establishing Italian permanent residency, obtaining EU citizenship, marrying an EU citizen or purchasing with an eligible spouse as joint owner, or purchasing through an Italian company.
Can I purchase non-residential property in Sardinia
Yes, without restrictions. Canadian citizens can purchase commercial property, agricultural land, vineyards, vacant land and other non-residential assets in Sardinia without limits.
Does buying property in Sardinia give me the right to live in Italy
No. Owning property does not grant residency or a visa. You can visit Italy for up to 90 days per 180-day period without a visa. To establish residency, you must apply for a separate visa, such as an Elective Residency Visa (requiring approximately EUR 31,000 annual passive income) or another category that fits your situation.
What taxes do I pay on rental income from my Sardinian property
You must report rental income to the Canada Revenue Agency and pay Canadian income tax at your marginal rate. Italy also charges income tax on the rental income. The Italy-Canada tax treaty provides a foreign tax credit to prevent double taxation, but coordination with both tax systems is essential.
If I sell my Sardinian property at a gain, what capital gains tax applies
Generally, capital gains from the sale of real property are taxed in Italy, where the property is located. However, you must report the gain to Canada’s CRA and may be entitled to a foreign tax credit or treaty relief to avoid double taxation. Consult with a cross-border tax advisor to understand your specific situation.
Can I get an Italian mortgage as a Canadian buyer
Yes, but with stricter terms than for Italian or EU residents. Expect to provide a 40 to 50 percent down payment, face a maximum loan-to-value of 50 to 60 percent, and provide extensive income documentation. Many Canadian buyers find it easier to purchase with cash or arrange Canadian financing.