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Sicily, Calabria and Sardinia are the three regions currently under consideration for the tax-free plan. Pictured is the idyllic Isola di Levanzo, part of Sicily’s Aegadian Islands.

How to Live the Best Tax-Free Life in Italy as a Retiree

Retirees who are thinking of moving to the sun-soaked south of Italy could soon be able to take advantage of a massive tax break that is being investigated by the country’s new government. The administration hopes to reverse the population decline trend in Italy’s southern regions with enormous tax advantages. Under the plan, those who relocated to certain areas in the south would pay no taxes for 10 years. The proposal would be open to both Italians as well as to foreigners. The idea has been proposed by The League, which makes up one half of the coalition which came to power in June. It will initially focus on three regions – Sardinia, Sicily and Calabria.

“We think it could appeal to foreigners – Italy is a beautiful country,” said Alberto Brambilla, economic adviser to Matteo Salvini, the interior minister and head of The League.

People of retirement age would be spared paying any taxes for a decade as long as they live for more than six months in their new home. It is estimated that by forgoing the property taxes on homes, the average couple would still spend €20,000-25,000 per year, helping to boost the local economy. Retirees with disposable income could therefore look forward to great weather, superb food and properties for sale at very attractive prices.

The government wants the focus to be placed on the areas where a population increase would have the greatest impact. As such, it is evaluating parameters for the areas that would be subject to the tax-free plan. First in mind are those towns and villages with populations of less than 4,000 and those that have sustained a decline of at least 20% of its population over the course of the last decade. Additionally, the towns themselves would be required to demonstrate that they are well run, with appropriate services, street lighting, well-kept parks and good health services.

The idea is to also lure back to Italy those who have moved outside of the country. Similar low-tax or zero-tax schemes offered by Portugal and Malta have proved hugely popular with many Italians. Retired Italians have also flocked to destinations such as the Canary Islands, Central America and Cyprus to find a place in the sun and a cheaper cost of living.

In the last 16 years, an estimated 1.8 million people have left southern Italy in search of jobs in the north, or have moved abroad. The government believes that approximately 150,000 people per year would take advantage of the tax-free plan, meaning that within four years, over a half million people would take up residence in the south. Although this will not replace all of the population that has left the south, if successful, the government may extend the program to additional regions.