For nonresident investors, Italy contains many little known provisions to reduce or eliminate tax on income and gains arising from real property. A careful reading of domestic tax law, combined with the proper application of bilateral income tax treaties, reveals several planning opportunities that can significantly enhance the efficiency of cross-border real estate investment. In their article, Federico Di Cesare, a Partner of Lipani Legal & Tax (formerly Macchi di Cellere Gangemi), Rome, and Dimitra Michalopoulos, an Associate in the tax practice of Lipani Legal & Tax (formerly Macchi di Cellere Gangemi), Rome, explain that, inter alia, capital gains arising from the sale of the Italian real property are not subject to Italian income tax if the real property is held for more than five years. Similarly, capital gains arising from the sale of shares in an Italian corporation or its liquidation are not subject to tax for a nonresident investor even when the assets of the corporation consist mostly of real property. Other opportunities are available to reduce or eliminate capital gains taxation for a nonresident who qualifies as a minority shareholder or benefits from an income tax treaty. Nonetheless, it is Italy, and numerous regulatory pitfalls must be managed, including legal requirements, factual conditions, and holding period.