Is Italy a good place to retire?
Italy is rated as one of the best places to travel and retire in the world. Its mild weather, natural beauty, world-class cuisine, historic art and architecture, and breadth of public services make it a vitalizing and safe place to retire.
Knowing what is required to retire in Italy can make it a reality. At a glance, you should be prepared with knowledge about the following:
- Housing: To qualify for the visa, you’ll need a rental contract or a deed to prove your intent to reside in Italy.
- Taxes: Depending on the area you choose to retire in, you’ll likely pay more taxes in Italy than in the US. There are exceptions, which we’ll cover.
- Visa: For stays past 90 days, you’ll need a visa – likely the elective visa, which requires you to prove you have enough retirement income, housing, flight plans, and healthcare coverage.
- Healthcare: You’ll need to provide proof of medical coverage when you enter the country. Once you’ve established residency, you can join the Italian national health service or buy private health insurance.
Ready to tackle a move to Italy in retirement? Let’s get to it.
What are the pros and cons of retiring in Italy?
With its globally renowned food scene, gorgeous landscapes, and organized infrastructure, retiring in Italy is an excellent option for many, especially when it comes to lifestyle. However, it’s not without its ups and downs.
Pros
- Leisure activities: Leisure activities are the center of life in Italy, and the quality of life is high in many areas of the country.
- Food, history, and culture: World-class cuisine, countless historical sites, and a welcoming culture are a big draw for Italy.
- Weather: Italy enjoys a Mediterranean climate with hot summers and relatively mild winters.
- Both urban and rural lifestyle options: Italy offers comfortable retirement in both rural countryside and dynamic city environments.
Cons
- Language barrier: The Italian language can be difficult to master, and you’ll need it to some degree. For example, if you want a driver’s license, you need to pass a driving test in Italian.
- Bureaucracy: Italy is known for its bureaucracy, so if you need a visa, residency permit, building permit, or other legal documents, it will take a considerable amount of time, follow-up, and effort. It can feel very frustrating.
- Taxes: Italy does tax retirement income, which is likely to be more than you would pay in the U.S. However, you may qualify for a lower flat tax rate in some areas.
- Healthcare services: National healthcare in Italy isn’t highly rated; it can be restrictive and has problems with availability and capacity.
What are the best places to retire in Italy?
There are many good places to retire in Italy. Where you choose to live depends on your lifestyle preferences and budget. Here are handful of the best places to retire in Italy:
- Sicily: The “boot” of Italy is picturesque, quiet, and has a low cost of living compared to other parts of Italy.
- Lazio: A balanced combination of Italian countryside and dynamic community is Lazio, home to many of Italy’s most classic pasta dishes.
- Tuscany: Tuscany provides easy access to a populated city area while still being close to beaches, mountains, and other natural and cultural perks.
- Umbria: Authentic Italian living with incredible countryside beauty. Much like Tuscany, but more affordable.
- Amalfi Coast: Endless cliffside villages, views of the Mediterranean, incredible cuisine, and luxury.
- Florence: Art and architecture lovers will love the best Renaissance art in the world in Florence.
- Milan: A bustling city of commerce and fashion in northern Italy with striking architecture and great connections to the rest of Europe.
What is the average cost of retirement in Italy?
The average cost of living in Italy (excluding rent) is $1,030.80 (€ 886.20) for a single person and $3,623.70 (€ 3,115.30) for a family of four, according to the cost-of-living estimator Numbeo. This works out to be 12% lower than the United States. Rent in Italy is 51% lower than in the U.S.
The cost of your retirement in Italy will also vary depending on the area you choose to live in. Here are a few cities in Italy to compare:
| City | For singles | For a family of four |
|---|---|---|
| Palermo, Sicily | $950.60 (€817.20) | $3,293.80 (€2,831.70) |
| Milan | $1,184.90 (€1,018.70) | $4,230.30 (€3,636.80) |
| Florence | $1,134.70 (€975.50) | $4,051.40 (€3,483) |
| Bologna | $1,151.30 (€989.80) | $4,080.60 (€3,508.10) |
| Rome | 1,014.0$ (€871.80) | $3,568.90 (€3,068.20) |
Minimum annual income requirement in Italy
To retire in Italy, you must meet the minimum annual income requirement of €31,000 per year, or €38,000 per year for married couples.
The amount increases by 20% for every dependent that you might have.
Finding housing in Italy
You don’t need to be a citizen to buy property in Italy, but owning property in Italy doesn’t grant you citizenship, or even residency. In fact, you’ll need to provide proof of residency when applying for a visa, so getting a rental contract or deed happens prior to applying for a visa.
To buy property, you’ll go through these steps:
- Obtain a Codice Fiscale: A tax ID is required to buy property and open a bank account, so you’ll need to register before you look at properties with a real estate agent. You can apply through the Italian consulate in your area or at the Italian Revenue Agency once in Italy.
- Look at properties: Find an agent and look at properties in person. Consider both properties listed online as well as through privately sold or sold through an auction.
- Negotiate and sign a preliminary contract: Your preliminary contract will include details about the property and the purchase. The deposit is usually between 10% and 20%, and is forfeitable if you withdraw from the sale without cause. You’ll also need to pay the real estate agent at this point.
- Complete due diligence: You’ll go through building inspections, title verification, and check for outstanding mortgages and liens.
- Sign and notarize: Pay the remaining balance, transfer keys, and register the deed with the local authorities.
Italian Mortgages: Getting a mortgage in Italy looks different than in the U.S. You can expect to pay higher interest rates as a non-citizen, loan terms of 15 to 20 years, and a loan-to-value ratio from 50% to 70%. In short, expect a higher mortgage payment for a lower-priced property.
Closing costs: Closing costs are a major consideration. They typically range from 10% to 20% of the sale, but since there are legally-mandated minimum amounts, it won’t decrease with a lower-priced property. Some advisors say you can expect to pay €12,000 ($13,973) even on a low-cost property.
Finding a rental in Italy
Many expats and advisors suggest renting first before buying a property in Italy. The process is similar to buying property, but more straightforward. You’ll search for properties and find one you like, obtain a tax ID and open a bank account, sign a contract, get your visa worked out, and move to Italy.
Average prices for an apartment (not studio) in Italy:
- Florence: €1,600 ($1,863)
- Rome: €1,875 ($2,183)
- Milan: €1,700 ($1,980)
- Bologna: €1,625 ($1,892)
Do you pay taxes after retirement in Italy?
Your retirement income is subject to Italian taxes when you become a resident, which can be quite high. Italy has a progressive income tax structure, which means you’ll pay a higher percentage at higher income amounts. The following are taxation rates in Italy:
| Income bracket | Rate | If your income is… | Then your tax would be... |
|---|---|---|---|
| Up to €28.000 ($32,641) | 23% | €28.000 ($32,641) | €6,440 ($7,507) |
| From €28.000 to €50,000 ($58,289) | 35% | €50,000 ($58,289) | €14,140 ($16,478) |
| Above €50,000 ($58,289) | 43% | €100,000 ($116,562) | €35,640 ($41,536) |
Flat tax
To lower your taxes in Italy, you can pay a 7% flat tax, but only if you move to a city of fewer than 20,000 residents in one of the following tax regimes: Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise, and Apulia.
Tax incentives
If you have a high net worth with a great deal of income, it’s also possible to take advantage of Italy’s flat tax on foreign income. New residents can pay a lump sum tax of €200,000 per year on foreign income.
What visas do I need to retire in Italy?
For non-Italians and non-European Union citizens, Italy has several options when it comes to visa requirements.
Tourist and transit visa: Of course, you have the option of the tourist visa, which allows for a maximum of 90-days in Italy, and then requires 90 days out of the country (and other countries in the Schengen Area).
If you’re only planning to spend part of the year in Italy, this could be a way to work with visa requirements. Just be sure to exit before the 90 days, or you could face steep fines or be banned from entering the Schengen Area for years.
Elective visa: If you’re retiring to Italy and not planning to work, the elective visa (EV) is probably your best bet. Here’s what you’ll need:
- Proof of recurring, passive income of at least €31,000 ($36,016.78). This can be totaled from pensions, rental income, investments, retirement accounts, and other income sources.
- Documentation of a one-way flight to Italy.
- Signed lease or property deed for proof of lodging in Italy.
- Letter of intent describing the reason you’re moving to Italy.
- Schengen insurance policy, which covers health and medical evacuation for the entire period you’re planning to stay.
- Visa fees.
- Visa appointment with the Italian consulate covering your area.
What programs are there for emigrating to Italy?
There are a few other visas that allow you to emigrate to Italy in retirement.
Golden visa: You can qualify for a residence permit by investing amounts between €250,000 ($291,423) to €2 million ($2.3 million) in Italy.
The amounts are lower for investments in startups (€250,000) or established Italian businesses (€500,000). The amounts are higher for investing in public bonds (€2 million) or projects of significant public interest (€1 million).
Digital nomad/remote worker: If you think you’ll be able to work online, you could also qualify for a remote worker visa. This visa is similar to the elective visa in that you’ll need to submit proof of housing, medical insurance, and application documents. You’ll also need to submit:
- Proof of qualifying profession and experience.
- Proof of income that is three times the legal amount of healthcare taxes (about €24,789 or $29,058.91).
Whether you go for the elective visa or the digital nomad visa, you’ll renew your visa at the end of the first year, which will be good for two years. Once you’ve been in Italy for 10 years, you can apply for citizenship.
What are my healthcare options in Italy?
Italy is served by a combination of public and private healthcare providers and facilities. When it comes to service, you’ll find modern healthcare in many parts of the country more affordable than in the U.S.
As far as health insurance goes, you’ll need Schengen insurance coverage before you enter the county. This is a requirement to qualify for a visa, which is health coverage for people entering Italy. Italian national healthcare insurance is provided free of cost to citizens, but foreigners residing in the country must pay an annual fee for national health insurance.
After you qualify for residency, as a retiree, you can choose to pay for national health insurance or buy private health insurance coverage.
National health insurance is paid for one year at a time, all upfront. The amount is the same whether you pay at the beginning of the calendar year or at the end, and it doesn’t carry over. If the healthcare costs $2,000 per year and you pay in November, you’ll need to pay $2,000 again in January.
Get expert financial advice
Deciding where to live out your retirement years is a big decision, and although it is not one of the cheapest options in Europe, retiring in Italy offers a highly desirable lifestyle.
The excellent healthcare, incredible scenery, local culture, and variety of living situations make it sought-after for those who are prepared to go through the lengthy emigration process.
If you’re looking for retirement and financial advice, Unbiased can help. Get matched with an expert financial advisor now who can ensure you enjoy your retirement.