Italy for Retired Expats: Tax Benefits & Lifestyle Advantages

Retirement is no longer just about slowing down — for many international retirees, it’s about rediscovering life on their own terms. After years of work, building a family, and managing complexity, retirement becomes a chance to invest in quality of life, beauty, and simplicity.

And in this search for balance, Italy is emerging as one of the most attractive destinations in Europe for foreign retirees.

With its stunning landscapes, accessible healthcare, rich culture, and generous tax incentives, Italy is increasingly appealing not only as a dream destination, but as a smart one — especially for those with foreign pensions, international assets, or simply a desire for something more meaningful.

Why Retire in Italy? A Lifestyle Worth Planning For

Retiring in Italy means waking up to views of olive groves, mountains, or Renaissance skylines. It means buying fresh produce at your local market, enjoying long lunches with real ingredients, and accessing top-tier healthcare for a fraction of the cost.

But beyond the postcards, it also means:

• Access to a public healthcare system (SSN) that, once enrolled, is reliable and cost-effective

• Living in a safe and socially cohesive country, especially in smaller towns

• Integration into a slower, more relational lifestyle — where people still take time for one another

• Proximity to other European destinations for easy travel

• Increasing numbers of expat communities offering support and connection

And now, thanks to targeted tax regimes, retiring in Italy isn’t just about lifestyle — it’s about financial efficiency, too.

Italy’s 7% Pensioner Tax Regime: A Hidden Gem

In 2019, Italy introduced a powerful incentive aimed specifically at foreign retirees: the 7% flat tax regime.

Who qualifies?

• Individuals with foreign-source pension income (private or public)

• Who relocate to a town with fewer than 20,000 inhabitants

• Located in one of seven southern Italian regions: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, or Molise

• And who have not been tax resident in Italy in the last five years

What does it offer?

• A flat 7% tax on all foreign income (not just pensions), including dividends, interest, rental income, and capital gains

• No wealth tax, no monitoring of foreign assets, and no inheritance/gift tax increase

• A duration of 10 years, renewable annually

This means that many retirees can retain control of their international assets and income — while living in a charming southern Italian town — without triggering excessive tax burdens.

Case Study: A British Retiree in Puglia

Let’s take John, a 68-year-old retired executive from London. He receives a private pension of £90,000 per year, owns a diversified portfolio abroad, and wants to downsize his lifestyle while enriching his daily experience.

By relocating to Ostuni, a whitewashed hill town in Puglia, he qualifies for the 7% regime. His foreign pension and investment income are taxed at just €6,300 per year. He buys a villa for €350,000 with sea views, enrolls in the local healthcare system, and integrates into a growing international community.

In short:John trades the noise of the city for the silence of the olive groves — without compromising control over his wealth or his freedom.

Healthcare Access: A Key Factor for Retirees

Italy’s Servizio Sanitario Nazionale (SSN) is one of the best-kept secrets among expats. It offers:

• Universal access once you become a resident

• Affordable private options when needed (e.g., private clinics, specialists)

• High standards for chronic care, diagnostics, and preventative medicine

• Integration into European health systems for cross-border needs

Most retirees pay a modest annual fee based on income, or contribute voluntarily (in case of non-pensioners). In return, they gain access to family doctors, hospitals, and prescription drugs — all in their new home region.

Knotted supports clients in registering with the SSN, finding bilingual doctors, and navigating private care options if preferred.

Real Estate Options for Retirees

The south of Italy offers extraordinary value. Whether you're looking for a seaside home in Sicily, a trullo in Puglia, or a townhouse in Campania, it’s possible to secure exceptional properties at prices well below northern European averages.

What makes these locations even more attractive:

• Lower living costs (often 30–40% below northern Italy)

• Warm climates and long outdoor seasons

• Availability of local services, including home care and maintenance

• Quiet, respectful communities ideal for retirees

Some towns, especially those part of the “borghi” revival movement, are also offering incentives for restoration or long-term stay.

Do You Need to Relocate Full-Time?

No — many clients choose to split their time between Italy and another country, especially during the early retirement years.However, to access the 7% regime (or the €100k flat tax), you need to become a fiscal resident — which usually means spending at least 183 days per year in Italy and shifting your centre of vital interests.

With the right planning, this can be done without giving up your original citizenship or passport, and without triggering double taxation, thanks to Italy’s wide network of tax treaties.

We assist clients in building compliant cross-border strategies — including residence permits, tax filings, and reporting obligations.

A Retirement Worth Planning For

Retiring in Italy doesn’t mean giving up comfort — it means redefining it.

It means having time for things that matter: books, long walks, meaningful conversations. It means anchoring yourself in a place that values beauty and slowness — and making a conscious choice about how you want to live the next 20 or 30 years.

And with proper structuring, it also means keeping more of what you've earned, without sacrificing compliance or flexibility.

Knotted: Helping You Retire with Confidence

At Knotted, we specialize in helping international clients relocate to Italy with clarity, simplicity, and discretion.

We work with pensioners, entrepreneurs, and families who want to structure their next chapter — not just as a change of address, but as a long-term investment in quality of life.

Whether you’re still researching or ready to act, our network of trusted lawyers, tax professionals, and relocation experts is here to guide you — step by step.

📩 Interested in retiring in Italy under the 7% regime or other tax incentives?

Write us at info@knotted.ch or

📲 message us on WhatsApp at +41 76 771 30 22 — your next chapter starts here.