Italy is often indicated as one of the most beautiful countries to retire because of its traditional food and culture as well as for the good weather and lifestyle. If you are a non-EU citizen thinking to retire in Italy, you might be interested in the visa requirements and tax incentives offered by our country.
Retiring in Italy pros and cons
Pros of retiring in Italy
Italy is generally considered as a very good place to live because of its beautiful art and culture, high quality of life, warm climate and culinary tradition. Many expats find that the delicious Italian food is also cheaper if compared to other European countries’ food markets.
Furthermore, Italy has a high-ranked public health system. In fact, it offers a national healthcare system – that is called in Italian Servizio Sanitario Nazionale (SSN) – which is free for many categories of foreigners such as workers and dependents. A family doctor and/or a pediatrician is assigned to all those who are registered. Family doctors can support with general illnesses or prescribe medications to their patients. Nevertheless, a small contribution must be paid each time a patient must undergo a specialist examination at the public hospital.
Cons of retiring in Italy
Among the cons of living in our beautiful country, is the fact that not many Italians, especially the elderly people – but also public officers working in the public administration – speak English. However, this could be a chance for you to get to learn our beautiful language! As a matter of fact, it is always advisable to take some Italian language lessons, before moving to Italy, just to learn simple sentences and be able to communicate in the daily life.
Finally, another disadvantage you may find while settling in is that the Italian bureaucracy, including immigration bureaucracy, is quite complex and relatively slow if compared to other European countries who have implemented more efficient, online systems.
Conditions for expats retiring to Italy
If you are an expat considering moving to Italy to retire, you should, first of all, evaluate the immigration options available for you. In fact, EU citizens can move to Italy without any specific prior immigration obligation, they only need to register at the Municipality where they are living, if they intend to stay in Italy for more than 90 days.
Non-EU citizens, on the contrary, will need to obtain a proper visa to be able to apply for relocation to our country.
Retiring in Italy as a dual citizen
Contrary to some other countries in the world, that allow to hold one citizenship only, Italy allows multiple citizenship. This means that if you are holding an Italian passport, together with your foreign passport, you are considered as an Italian citizen at all effects. Of course, you must remember to always carry both your passports with you, to show to the frontier authorities in case of checking.
The Elective Residence Visa
The Italian elective residence visa is intended for foreigners who want to live in Italy without an employment contract, being able to support themselves autonomously (i.e. retired persons, persons with high self-sustaining incomes and financial assets). One of the basic requirements, in fact, is that the applicant cannot support the time residing in Italy through any type of work.
Adequate and documented information shall be provided regarding the availability of a property to be elected as residence (i.e. a registered lease contract), and of stable and regular economic resources, of which continuity in the future can reasonably be assumed. You might want to check our dedicated article on the Elective Residence visa documents and process.
The Italian Golden Visa
The Investor Visa for Italy – also known as Golden Visa – is an immigration path introduced a few years ago and addressed to all non-EU nationals who wish to invest in strategic assets for the Italian economy. There are several types of investments that are accepted for this visa application.
There are two main conditions for the successful release and maintenance of the investor permit:
- The applicant shall make the investment or donation declared in the visa application within three months after entering Italy;
- The applicant must maintain the original investment for the entire validity of the residence permit.
Italy 7% Flat Tax for Pensioners
Art. 24-ter of T.u.i.r. provides an important tax incentive to those who transfer their residency to Italy and hold retirement incomes from a foreign source.
Amount of the tax incentive
The tax incentive consists in the possibility to subject all incomes produced abroad, of any category, to substitute tax.
The amount of the substitute tax is established on a flat-rate basis (flat tax) of 7%.
The incomes produced abroad on which it is possible to apply the 7% rate are those identified in accordance with the criteria specified in art. 165, par. 2 of T.u.i.r.
Requirements to take advantage of the tax incentive
To be able to take advantage of the 7% flat tax rate, you need to comply with the following requirements:
- Holding retirement incomes provided by foreign parties (retirement income, as per art. 49, par. 2, letter a) of T.u.i.r.);
- Transferring your residency to Italy in one of the municipalities located in the following territories and with a population not exceeding 20.000 inhabitants:
- Not having resided in Italy during the 5 tax periods prior to that in which the substitute flat tax 7% rate is applied
- Trasferring your residency from countries which have entered into administrative cooperation agreements with Italy
How to get the 7% flat tax
Taxpayers who comply with the requirements mentioned above may opt for the 7% flat tax. Such option must be exercised in the tax declaration related to the tax period in which residency in trasferred to Italy.
Example: residency transfer to Italy: 10 may 2023. The option has to be exercised in the tax declaration form 2024, year 2023 (closing day for submission: 30 November 2024).
Term of the 7% flat tax incentive
The so-called “Growth Decree” (Legislative Decree n. 34/2019) has raised the maximum term of access to the tax incentive from 6 to 10 tax years. Therefore, taxpayers may benefit from the 7% flat tax during the year in which they exercise the option, plus the following 9 tax years.
The flat tax option may be revoked at any time by taxpayers.
The 7% flat tax: the Italian Revenue Agency’ s opinion
Through its resolution n. 471/2022, the Italian Revenue Agency (Agenzia delle Entrate) has clarified that being holders of a pension provided by INPS, in addition to a foreign pension, does not prevent the application of the 7% flat tax.
Such taxpayers may subject all foreign incomes to the 7% tax rate, whereas the pension provided by INPS will be subject to irpef (personal income tax) in accordance with ordinary rules.
Best places to retire in Italy
Many expats from all over the world choose Italy as a country to retire and spend their so called “golden age”. There are many interesting destination places to consider when planning a move to Italy, especially in the South of Italy and in the islands.
Retiring to Southern Italy
While Sardinia is mostly preferred by tourists, Sicily island and Apulia region are more targeted by pensioners, who decide to go and spend their life there due to the beautiful beaches, world-known food and relaxed lifestyle. Moreover, they have some of the lowest living costs in Italy, both in terms of rent and sales. Over the years, Apulia region has become increasingly known for hosting a wide community of expat pensioners who live as retirees in the region to benefit from the friendly atmosphere and beautiful real estate properties.
Retiring to Central Italy
Moving to the south-center of the Italian peninsula, you may find Abruzzo region, which is considered a good place to retire too, and a good compromise between beaches, the countryside and Apennine Mountains.
Retiring in Rome and Milan
Finally, if you are looking for a more central, multicultural yet more expensive location, you might want to consider Rome or Milan. Rome is Italy’s capital city and offers a livelier lifestyle, being full of tourists, history and culture. Milan, on the other hand, is the capital of fashion and hosts a wide range of luxury shops, but also a rich architectural presence and some beautiful lakes nearby. Both cities are known for the high costs of living, in fact renting and buying properties there is generally more expenses than in other Italian regions.