Would you retire in Italy for an income tax rate of 7 per cent? That’s the rate being offered by the Rome government in an initiative aimed to entice people with spending power to move to its towns and villages.
The special tax regime is available for up to 10 years to anyone drawing a pension from abroad who has not recently been resident in Italy, if they move to a municipality with 30,000 residents or fewer in the south and parts of central Italy.
Vico Equense on the Sorrento coast, an hour south by commuter train from Italy’s third city Naples, is one of the towns that newly qualify as of this year when the population cap for qualifying areas was raised from 20,000.
Local mayor Giuseppe Aiello says retirees from Ireland would be welcome.
“You certainly eat well here, so the local cuisine is very important. We have a wonderful landscape – the sea and the mountains,” Aiello says.
A traditional getaway spot for well-heeled Neapolitans built atop the dramatic cliffs characteristic of the Sorrento coast, the town has a low-key, local feel and has avoided catering to mass tourism.
Umbrellas and sunbeds on a beach in Vico Equense, Italy. Photograph: Ivan Romano/Getty
A street in the old town of Vico Equense. Photograph: Naomi O'Leary
There are panoramic views down to the beaches either side of the old town, which is built around a 13th-century castle and has a famous Gothic church looking over the sea.
The town hosts a nativity procession at Christmas and summer festivals that celebrate local products like riavulillo, a droplet-shaped cheese stuffed with olives and chilli oil and served roasted.
“It’s very calm here,” says local real estate agent Lucio Verdoliva. “People come here for the clean air, the sea, the beaches.” The famous ruins of Roman Pompeii are a short train ride away.
As well as being on Naples’ coastal commuter train line with easy access to the healthcare and cultural offerings of a city of a million inhabitants, Vico Equense is a 40-minute drive from Naples airport, which has direct flights to Dublin and Shannon.
However, the town is no undiscovered secret to Italians, and prices can reach €6,000 a metre in the centre or €4,000 a little further out.
“Up the mountain the prices are lower, but you need a car to get around,” Verdoliva says.
Among the properties advertised are a two-bedroom beachfront chalet for €590,000, a three-bedroom apartment in the town centre for €450,000 or a two-bed for €365,000. A five-bedroom villa is €750,000, a little further out.
In flashier restaurants with sea views, main courses cost about €20, but unassuming family-run restaurants like Al Buco in the town centre offer pasta dishes from €8 and full pizzas from €6.
Pizza sold by the metre at the famous L'Università della Pizza in Vico Equense. Photograph: Naomi O'Leary
Wine and other local specialties at Pizzeria da Franco. Photograph: Naomi O'Leary
The town is famous for its long, rectangular pizzas that are ordered by the half-metre length at L’Università della Pizza, where summer seasonal specials include courgette flower, stracciatella, Parma ham and lemon rind.
Is it fair on the local population for foreigners to be offered such low taxes – especially if they might be older people with healthcare needs?
“I think it’s fair, but it would also be fair to reduce the tax burden for everyone. Because in Italy, people pay a very high level of tax,” says Aiello, the mayor, who was elected with the support of a centrist to right-wing coalition.
“It’s definitely a good thing.”
Vico Equense is just one of hundreds of towns that qualify for the special tax regime.
Any municipality qualifies that has fewer than 30,000 inhabitants on the islands of Sicily and Sardinia or in the regions of Calabria, Campania, Basilicata, Puglia and Molise – anywhere from the ankle of Italy’s boot down.
The initiative is an attempt to reinfuse economic activity and spending power into southern Italy, which has suffered decades of economic decline relative to the industrial north and continues to suffer outward migration.
A cat sleeps under a moped in Vico Equense. Photograph: Naomi O'Leary
Santissima Annunziata cathedral in Vico Equense. Photograph: Bildagentur-online/Universal Images Group via Getty
In central Italy, parts of Lazio, Umbria, Marche and Abruzzo – regions surrounding Rome – also qualify as parts of the Apennine mountain range still suffering from the economic and social damage of a 2016 earthquake.
Claimants must be drawing an overseas pension to qualify, but once they are, all their overseas income falls under the 7 per cent rate, whether from rents, investments, capital gains, or business revenue as long as it is coming from outside Italy.
The Italian government uses the term “silver economy” to describe the strategy: people “in good health, with solid financial portfolios, and the willingness to invest time and resources in their quality of life”.
It also hopes the policy will attract Italian people to return to Italy to retire after years working abroad.
“History, art, culture, small villages immersed in beautiful nature ... We are convinced that these characteristics have the potential to also attract foreign visitors who are seeking a ‘slow’ lifestyle,” Guido Castelli, an Italian senator and commissioner for earthquake rejuvenation, said in a statement.
Italian senator Guido Castelli. Photograph: Simona Granati/Getty
After a slow initial roll-out, the take-up of the tax has accelerated with 933 people moving to Italy to claim it in 2024, according to figures released to Italian media.
This is expected to accelerate now that the initial population cap on qualifying towns was raised.
“These are not remote villages, they are functioning midsized towns with hospitals, schools, transport links, and a quality of urban life that smaller comuni [municipalities] often cannot offer,” Marco Mesina, an Italian tax lawyer, wrote in a recent analysis.
Gina Elefante, a Californian with Italian roots, decided to take up the offer and return to the old country on her retirement “for an adventure”.
“Italy just called me, and I wanted to be here,” Elefante says.
She moved to the vibrant seaside town of Soverato in Calabria, population 8,500, on the sole of Italy’s boot.
Soverato, a seaside town with a population of 8,500. Photograph: DeAgostini/Getty
“I thought I would be moving more north, but when I came here, I just fell in love with it. The people here are so warm and kind, and I just felt a kindred spirit,” Elefante says.
She found an initial apartment to rent through word of mouth while she has a house newly built overlooking the sea. Costs for such projects in the area are about €300,000.
The availability of healthcare where she is could be better, Elefante says: she retains access to Medicare in the US, and makes medical appointments there when she travels back to see family.
Life in a small town has brought some novelties. “Everybody knows everybody ... People knew my business who I had never spoken to before,” she says.
“There’s a lot of gossip. It’s not malicious, it’s just more curiosity than anything. They’ve all been very nice.”
Michael Welch also moved from the US to Soverato with his wife, Christine, drawn by the 7 per cent tax and the chance to be closer to their grandchildren, as most of their offspring have moved to Europe.
The two are throwing themselves into learning Italian while trying to become writers, a long-held passion they have turned to now they are retired.
“So that’s how we spend our time: writing and reading and walking and swimming, and we’re just having a great time,” Welch says.
“I haven’t driven a car in months now, and I love that. I commuted for 30 years in Silicon Valley, and if I can avoid driving, I will for the rest of my life.”
The couple are renting while they look to buy a three-bedroom apartment for €250,000-€300,000 or a two-bed for €150-€250,000.
Su Guillory availed of a different tax benefit when she moved to Italy from the US: a 5-15 per cent flat tax for freelancers and sole traders. She now runs a business advising others on how to relocate.
She lives in a mountain town in Calabria with a population of 900 “on a good day, and including the cats” where you can “live very nicely for €1,300 a month”.
An evening view over the marina of Vico Equense. Photograph: Naomi O'Leary
Property can be incredibly cheap in depopulating areas of Italy, and there are websites dedicated to selling foreigners Italian homes for prices as low as €1.
However, Guillory encourages clients to spend as much time as possible in a place before buying.
“In my town, there are six houses for sale that have been for sale for years. Even if it’s not a huge financial commitment, you may never sell this house if you buy it,” she says.
The retired people she has worked with are clearly contributing to the Italian economy, she says: eating out daily, buying coffee, buying and renovating real estate.
Some are “belligerent about not speaking” Italian, while others are deeply committed. Guillory herself began learning Italian years before moving, and is now learning local dialects.
“I’m making friends with everyone ... The little old ladies invite me over for coffee, and old men at the bar invite me for a beer. I’m ingraining myself in the culture as much as I can,” Guillory says.
“I want this. Other expats just want to hang out with other expats. So it’s what you put into it.”
The biggest cultural adjustment for Guillory has been letting go of her expectations that anything will happen quickly and embracing “the slowdown”.
“As much as I want to say: you’re doing this wrong, obviously they’ve been doing this for hundreds of years. I always say: I can’t change Italy, I have to change for Italy, or just be very frustrated.”
The pool at Palazzo San Domenico in Taormina, Italy, the location of the hotel in season two of The White Lotus. Photograph: Paul Rovere/Getty
Italy’s retirement tax havens: towns that qualify
In Sicily, the clifftop seaside resort of Taormina,which was the setting for season two of The White Lotus, qualifies for the special tax regime. It is known for its ancient Greco‑Roman theatre, sandy beaches and picturesque island Isola Bella, which connects to its main beach.
In Sardinia, the seaside town of Iglesias is less than an hour’s drive from the island’s capital Cagliari and has a rich historic centre in a dramatic beachfront setting. Sardinia is generally sparsely populated, meaning anywhere outside its large urban centres is likely to qualify.
Many picturesque towns qualify in the coastal region of Puglia, which forms the heel of Italy’s boot. Inland, there is the gleaming whitewashed city of Ostuni and the Unesco world heritage site of Alberobello, home to Puglia’s traditional “trulli” cone-roofed stone huts.
Among the qualifying towns on the sea is the “pearl of the Adriatic”, Polignano a Mare.
Rural Molise is a low-profile region even within Italy, and is wonderfully unspoilt. There is a two-hour direct train connection from central Rome to Molise’s third-largest town, Isernia, population 20,500, which has views of snow-capped mountains and access to skiing in the wintertime. A fully renovated four-bedroom flat with mountain views is on sale there for €95,000.
Earthquakes aside, the selling points for the Apennine areas of central Italy include a cooler climate, untouched nature, and spectacular cuisine.
They are not all isolated. Cittaducale, a medieval town of 6,500 people, lies on the ancient Via Salaria road from Rome to the Adriatic coast and is an hour and a half’s drive from the capital.
Those seeking extreme peace – and very cheap real estate – can check out Poggiodomo, a famously remote and beautiful mountaintop village in Umbria with about 100 inhabitants, surrounded by nature and ancient pilgrim paths.
