News brief · Taxation
Italy: the 7% pensioner regime in the South remains in force
Italy's regime for foreign pensioners was extended in 2026: the population cap for eligible municipalities rose from twenty to thirty thousand inhabitants. The rate and duration, however, have not changed.
By Editorial team · on April 28, 2026
Where the regime stands
The regime applies a substitute tax of 7%1 to every category of foreign-source income for a person who receives a pension paid by a foreign body and transfers their tax residency to Italy.
The Italian revenue agency states that the option applies for 9 years2 of taxation, under Article 24-ter of the consolidated income tax code.
The geographical condition is at the heart of the scheme: the move must be to a municipality with a population not exceeding less than 30,000 inhabitants3, located in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Apulia.
This cap was raised on 7 April 2026; it previously stood at less than 20,000 inhabitants4. Municipalities that had been excluded until then have therefore become eligible.
The same cap applies to municipalities affected by the 2009 earthquakes in the L'Aquila area and the 2016 earthquakes in central Italy, which open the regime outside the eight listed regions.
What the extension changes
Raising a population cap is not a technical adjustment: it brings larger municipalities into scope, which are therefore better provided with services, shops and medical care.
This is precisely the point on which the scheme was most criticised. A pensioner, by definition, needs access to healthcare, and Mezzogiorno municipalities of a few thousand inhabitants offer only basic local care.
The extension therefore makes the regime workable for people it effectively excluded, without changing either its rate or its duration.
It changes nothing, on the other hand, for those already in it: the regime is not retroactive and is not extended.
We do not publish the named list of eligible municipalities or of the municipalities affected by the earthquakes: they appear in legislative annexes whose current version we have not been able to verify. Eligibility must be checked municipality by municipality, against the official list.
The purpose of the scheme sheds light on this change. It is not a general tax-incentive regime but a regional development policy, intended to support declining Mezzogiorno municipalities demographically and economically.
This purpose explains the geographical condition, its revision, and the fact that the scheme is not comparable to the Greek pensioner regime, which imposes no location requirement and lasts longer.
What the regime does not cover
The substitute tax applies to foreign-source income. Italian-source income remains taxed under the ordinary scale, whose top marginal rate reaches 43%5.
The France–Italy tax treaty also determines how pensions are treated. Public-sector pensions generally follow a different rule from private-sector pensions and may remain taxable in France.
A former civil servant and a former private-sector employee are therefore not in the same position, even though they settle in the same village. Each pension must be classified individually, before departure.
Italian inheritance tax, by contrast, is very favourable: 4%6 in the direct line and between spouses, with an allowance of €1,000,0007 per beneficiary.
What to do
- Check the eligibility of the target municipality on the official list, not on a population estimate.
- Have each pension classified under the France–Italy tax treaty.
- Check the conditions on prior non-residence in Italy.
- Assess the local medical services and the distance to referral facilities.
- Monitor the 183 days8 threshold, which establishes Italian tax residency.
Finally, this regime should be clearly distinguished from the new-resident regime, based on a flat tax of €300,0009 for a maximum of 15 years10, and from the regime for inbound workers. None can be combined with another, and the choice depends on the nature of the income.
Please note
Sources and verification dates
- 1.
Italy, foreign retirees: substitute tax rate on foreign-source income : 7%
« prevede l'applicazione di un'imposta sostitutiva dell'Irpef con aliquota del 7% a qualsiasi categoria di reddito prodotto all'estero, per ciascuno dei nove periodi d'imposta di validità dell'opzione (articolo 24-ter del Tuir). »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 2.
Italy, foreign retirees: number of tax periods covered by the option : 9 years
« l'applicazione di un'imposta sostitutiva dell'Irpef con aliquota del 7% a qualsiasi categoria di reddito prodotto all'estero, per ciascuno dei nove periodi d'imposta di validità dell'opzione (articolo 24-ter del Tuir). — Agenzia delle Entrate, « Regime opzionale per i pensionati esteri » (mise à jour du 8 mai 2026). »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 3.
Italy, foreign retirees: maximum population of the municipality of settlement, since 7 April 2026 : 30,000 inhabitants
« Il regime di favore è applicabile se la residenza viene trasferita in uno dei comuni appartenenti al territorio delle regioni Sicilia, Calabria, Sardegna, Campania, Basilicata, Abruzzo, Molise e Puglia, con popolazione non superiore a 30mila abitanti (tale limite è in vigore dal 7 aprile 2026, in precedenza era 20mila abitanti). Possono beneficiarne anche i pensionati esteri che trasferiscono la residenza in uno dei comuni, sempre con non più di 30mila abitanti, interessati dagli eventi sismici del 6 aprile 2009 (“terremoto dell'Aquila”) o dagli eventi sismici del 2016 (“terremoto del Centro Italia”). — Agenzia delle Entrate, « Regime opzionale per i pensionati esteri ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 4.
Italy, foreign retirees: former population cap for the municipality, until 6 April 2026 : 20,000 inhabitants
« Il regime di favore è applicabile se la residenza viene trasferita in uno dei comuni appartenenti al territorio delle regioni Sicilia, Calabria, Sardegna, Campania, Basilicata, Abruzzo, Molise e Puglia, con popolazione non superiore a 30mila abitanti (tale limite è in vigore dal 7 aprile 2026, in precedenza era 20mila abitanti). Possono beneficiarne anche i pensionati esteri che trasferiscono la residenza in uno dei comuni, sempre con non più di 30mila abitanti, interessati dagli eventi sismici del 6 aprile 2009 (“terremoto dell'Aquila”) o dagli eventi sismici del 2016 (“terremoto del Centro Italia”). — Agenzia delle Entrate, « Regime opzionale per i pensionati esteri ». »
agenziaentrate.gov.itHistorical value, applicable until April 7, 2026
- 5.
Italy: top marginal IRPEF rate : 43%
« fino a euro 28.000 : 23% ; da 28.001 fino a euro 50.000 : 35% [33 % depuis la loi de finances 2026] ; oltre a euro 50.000 : 43% — 14.140 euro + 43% sul reddito che supera i 50.000 euro. — Agenzia delle Entrate, « Aliquote e calcolo dell'Irpef ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 6.
Italy: inheritance tax rate in the direct line and between spouses : 4%
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 7.
Italy: allowance per beneficiary on inheritances in the direct line : €1,000,000
« 4% per i trasferimenti in favore del coniuge o di parenti in linea retta (ascendenti e discendenti), da applicare sul valore complessivo netto eccedente, per ciascun beneficiario, la quota di 1 milione di euro. — Agenzia delle Entrate, « Imposta di successione – Aliquote e franchigie ». »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 8.
Italy: annual presence that establishes tax residency : 183 days
« A person is considered resident in Italy for income tax purposes if they meet at least one of the following conditions for most of the year (at least 183 days per year, or 184 for leap years) »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 9.
Italy, new residents: annual flat tax, moves from 1 January 2026 : €300,000
« la legge di bilancio 2026 ha elevato a 300.000 euro l'importo dell'imposta sostitutiva sui redditi prodotti all'estero da chi si trasferisce in Italia »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source
- 10.
Italy, new residents: maximum duration of the option, from the first tax period : 15 years
« L'opzione è valida per un massimo di 15 anni dal primo periodo d'imposta di validità dell'opzione »
agenziaentrate.gov.itVerified on Nov 2, 2026Verified source