7% Flat Tax for Foreign Pensioners

Retire in Italy.
Pay just 7% tax
on your pension.

Foreign retirees who move to qualifying small municipalities in southern Italy pay a flat 7% tax on all their foreign pension income — for up to 10 years. Italy's best-kept secret for affluent retirees seeking la dolce vita without the tax burden.

📅 Free Retirement Assessment Who Qualifies

Flat tax on ALL foreign pension income

10 years

Duration of the regime

20,000

Max population of qualifying municipality

2019

Year Introduced

The Regime

7% on everything.
For 10 years.

Introduced in 2019 under Article 24-ter of the Italian Tax Code, the pensioner flat tax allows foreign retirees receiving pension income from abroad to elect a 7% substitute tax on all their foreign-source income — replacing all ordinary Italian income taxes on those amounts.

The only condition beyond the income requirements is geographic: you must register your residency in a municipality with fewer than 20,000 inhabitants located in one of the eligible southern Italian regions. This was deliberately designed to revitalize depopulated areas of southern Italy.

Real example: A British retiree with a £60,000/year pension moves to a village in Calabria. In the UK, they'd pay significant income tax. Under Italy's 7% regime, they pay approximately €4,200/year in Italian tax on that pension — plus enjoy Mediterranean living, low cost of life, and access to Italy's universal healthcare.

Combine with €1 houses: The 7% pension tax and the €1 house program are a natural combination — buy a historic property for essentially nothing, renovate it, and pay only 7% on your pension. The most affordable luxury retirement in Europe.

✅ Who Qualifies?

Receiving a foreign pension (state, private, or occupational)
Not been Italian tax resident in the 5 years prior to application
Pension paid by a state or entity in a country with an information exchange agreement with Italy (covers US, UK, Germany, France, Switzerland, Australia, Canada, and most developed nations)
Willing to register residency in a qualifying small municipality in southern Italy

📍 Qualifying Regions & Rules

Sicily
Sardinia
Calabria
Campania
Basilicata
Abruzzo
Molise
Puglia

Municipality must have fewer than 20,000 inhabitants. Some regions apply a stricter 3,000-inhabitant threshold for certain incentives. We identify the right municipality for your preferences.

Where to Live

Beautiful villages
that qualify.

These are just a sample of the hundreds of qualifying Italian towns — each with its own character, history, and appeal.

Sicily

Sambuca di Sicilia

One of Sicily's most beautiful Arab-Norman towns. Famous for its €1 house program. Stunning views, incredible food, under 6,000 inhabitants.

Calabria

Tropea

Perched on a cliff overlooking turquoise sea. One of Italy's most photographed towns. Under 7,000 inhabitants. Perfect climate year-round.

Sardinia

Bosa

Pastel-colored medieval town on the Temo river. Pristine beaches nearby. Under 8,000 inhabitants. Strong expat community growing rapidly.

Basilicata

Matera

UNESCO World Heritage Site — the famous "Sassi" cave dwellings. Under 60,000 total but surrounding villages qualify. European Capital of Culture 2019.

Abruzzo

Civitella del Tronto

Hilltop fortress town on the Gran Sasso massif. Excellent connectivity to Rome. Under 5,000 inhabitants. Known for excellent local cuisine.

Puglia

Alberobello

World-famous trulli houses. UNESCO World Heritage. Under 11,000 inhabitants. Strong tourism base with growing international community.

We help you identify the best qualifying municipality for your preferences, connectivity needs, and lifestyle — including school access for families with children.

Real Numbers

Your tax bill
at 7%.

Annual Pension Income	UK / US Tax (approx.)	Italian Tax at 7%	Annual Saving	10-Year Saving
€40,000	~€9,000–€12,000	€2,800	+€6,200–€9,200/year	+€62,000–€92,000
€80,000	~€22,000–€28,000	€5,600	+€16,400–€22,400/year	+€164,000–€224,000
€150,000	~€50,000–€65,000	€10,500	+€39,500–€54,500/year	+€395,000–€545,000
€300,000	~€110,000–€140,000	€21,000	+€89,000–€119,000/year	+€890,000–€1,190,000

Note: double taxation treaty provisions in your home country may affect your tax situation there. We coordinate with local tax advisors in your country of origin where needed.

FAQ

Common questions.

Does this apply to US Social Security, UK State Pension, or private pensions?

It can apply to all three, but the specific tax treatment depends on the double taxation treaty between Italy and your home country. Some treaties allocate taxing rights exclusively to the source country. We verify treaty position for your specific pension type and country before you commit.

Can I still access Italian healthcare under this regime?

Yes. Once you register residency in Italy, you are entitled to register with the Italian National Health Service (SSN). You may need to pay a nominal annual contribution, but access to Italy's excellent public healthcare system is included.

What if I want to move to a bigger city after a few years?

The 7% regime requires you to maintain residency in a qualifying small municipality. If you move to a larger city, the regime ends. However, after 10 years (the maximum duration) you are free to move anywhere in Italy regardless.

Can I buy property under this regime?

Yes, and this is actively encouraged. Purchasing property is not required but is a natural complement — especially when combined with the €1 house programs available in many qualifying municipalities.

Retire in Italy.Pay just 7% taxon your pension.

7% on everything.For 10 years.