Retiring in Italy: tax benefits and visa options for non-EU citizens

Italy is one of the most popular destinations for foreign retirees thanks to its climate, quality of life, and the tax benefits available to those who transfer their residence to the country. For non-EU citizens, the main way to take advantage of these opportunities and live permanently in Italy is through the elective residence visa and residence permit.

The Elective Residence Visa and Residence Permit

The elective residence visa and residence permit is intended for those who wish to move to Italy without working. To obtain it, applicants must prove that they have accommodation and sufficient financial resources to support themselves permanently in Italy without engaging in any work activity.

Generally, the applicant must have a passive income of at least €32,000 per year. However, Italian Consulates, which are the authorities responsible for deciding whether to grant this type of national visa, tend to prefer candidates with a stronger and more stable financial situation.

The following are considered valid sources of income for the issuance of the visa:

• pensions;

• financial income;

• bank interest;

• income from real estate;

• dividends or investments.

Accommodation Requirements

It is not mandatory to buy a house in Italy in order to obtain an elective residence visa. A rental agreement is also sufficient, provided that it has a duration of at least one year and is properly registered with the Italian Revenue Agency.

Hotel reservations, Airbnb bookings, or simple letters of hospitality are generally not accepted. Although owning property in Italy is not required, it can nevertheless strengthen the visa application.

Is it possible to work?

The holder of an elective residence visa and residence permit may not engage in any work activity, whether as an employee, a freelancer, or remotely for a foreign company: residence in Italy must be financed exclusively through passive income.

Main tax and other benefits

Those who move to Italy with this visa and residence permit can obtain several benefits.

After five years of lawful residence, it is possible to apply for the EU long-term residence permit. After ten years, provided that all legal requirements are met, it is possible to apply for Italian citizenship by residence.

From a tax perspective, foreign retirees who transfer their residence to Italy in certain municipalities in central and southern Italy may opt for a special tax regime providing for a flat 7% tax on all income earned abroad.

This opportunity mainly concerns those who choose to live in regions such as Sicily, Calabria, Puglia, Sardinia, Abruzzo, Molise, or Basilicata.

In addition, once formally registered as a resident in an Italian municipality, the holder of an elective residence permit may access the National Health Service by paying an annual contribution proportional to income. Although not free of charge, the cost generally remains limited (up to approximately €2,000 per calendar year of enrollment).

Conclusion

For non-EU retirees, Italy offers a very attractive combination of quality of life, a favorable tax regime, and the possibility of obtaining permanent residence and citizenship over time. However, careful preparation of the elective residence visa application and proper tax planning are essential in order to increase the chances of success.

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The content of this article is intended to provide general information on the topic. For doubts or specific cases, it is advisable to seek specialized legal advice tailored to your particular situation.

Article written by Alessia Ajelli, Managing Associate of LCA Studio Legale, Italian lawyer specialized on Italian immigration and citizenship law, and Paolo Grassi, Trainee of LCA Studio Legale.