What’s the best place to retire abroad? Italy, of course! Or even better, the South of Italy. This is especially true since the country has introduced the Flat Tax for pensioners, which consists in very favourable tax conditions to encourage Italian and non-Italian retirees to move to the peninsula, as Portugal did in 2009.

As part of the 2019 Annual Budget, the Italian government introduced a law that caps taxation on pensions and other foreign income at 7% for the first 9 years of their residency in Italy. The scheme is to remain in place for 5 years. After this period, income will be taxed according to the progressive tax rate.

Requirements to benefit from the ‘Flat Tax’ benefit for retirees in Italy

  1. You must have a pension or income from overseas
  2. You have not been Italian tax residents in the last 5 years preceding your relocation to Italy.
  3. You are currently a resident in a country that has tax agreements with Italy, such as the EU countries, Canada, Japan, Russia, Switzerland, the UK and the USA.
  4. You have to take up your tax residency in a town in Southern Italy – Sicily, Calabria, Campania, Sardinia, Puglia, Molise, Basilicata and Abruzzo – with no more than 20,000 inhabitants. But also in those towns of Lazio, Marche and Umbria hit by the earthquakes on 24 August and on 26 and 30 October 2016, and on 18 January 2017 with no more than 20,000 inhabitants.

Advantages of moving to Southern Italy

If you’ve already visited Southern Italy you will have fallen in love with its breathtaking landscapes and the friendliness of the people.

The area is rich in historic towns and villages and offers many areas of natural beauty and archaeological sites.

Especially outside the biggest cities you find the real Italian way of life that values life’s simple pleasures: a long coffee break with a friend or that feeling of sand between your toes while walking along the beach.

What’s more, the area boasts a mild climate all year round. So even in winter it is never too cold to take an evening stroll around the town.

Life is not only simpler but also more affordable! Property prices are much lower than in northern and central Italy. There is a good chance you’ll find your dream home at a surprisingly affordable price!