How to Retire in Italy 

Imagine waking up to the scent of fresh espresso, strolling through sun-drenched piazzas, and indulging in world-class cuisine — all while enjoying the relaxed pace of la dolce vita. Italy has long been a dream retirement destination for expats seeking culture, history, and breathtaking landscapes. But while retiring in Italy may be the dream, it does require some planning. 

In this guide, we’ll cover everything you need to know about retiring in Italy, including visa options, cost of living, healthcare, taxes, and the best places to settle down. If you’re ready to make your Italian retirement dream a reality, read on! 

Why Retire in Italy? 

With its rich culture, affordable options, and high quality of life, Italy remains one of the best places to retire abroad. For many expats, the benefits that draw them to Italy include: 

• Rich history and culture: From the Colosseum in Rome to the canals of Venice, Italy is a living museum filled with art, architecture, and tradition. 
• Exceptional food and wine: Each region boasts unique culinary specialties, from fresh seafood on the Amalfi Coast to rich pasta dishes in Bologna. 
• Mild Mediterranean climate: With warm summers and mild winters, Italy is ideal for outdoor activities year-round. 
• Affordable living: While cities like Milan are pricey, smaller towns offer a lower cost of living compared to the US and other European countries. 
• Vibrant expat communities: Established networks in cities and smaller towns help retirees integrate smoothly. 
• Excellent healthcare: Italy ranks highly for healthcare quality, with both public and private options available. 
• Relaxed pace of life: Italians prioritize leisure, family, and socializing, making for a stress-free and enjoyable lifestyle. 

Residency Options for Retirees in Italy 

To retire in Italy as a non-EU citizen, you’ll need a long-term visa. The most common option is the elective residency visa (ERV). This visa is designed for financially independent retirees who don’t need to work. Requirements include: 

• Proof of financial self-sufficiency: You must show a stable annual income of at least €32,000 (around €38,000 for couples) from pensions, investments, or savings. 
• Proof of accommodation: You must have a rental agreement or own property in Italy. 
• Private health insurance: Since you won’t initially qualify for public healthcare, you need private coverage. 

Application Process 

• Gather documents: This includes a passport, financial statements, proof of accommodation, health insurance, and a visa application form. 
• Apply at an Italian consulate: This must be done in your home country before moving. 
• Await approval: Processing times vary but can take one to six months. 
• Obtain a residence permit (Permesso di Soggiorno): Once in Italy, you must apply for this within 8 days of arrival. 

Tips for Getting Approved 

• Strong financial proof is key. Your income must be passive (e.g., pensions, savings), as employment is not allowed. 
• A long-term lease or home purchase strengthens your case. The government wants to see that you’re committed. 
• Be prepared for bureaucracy. The process can be slow, so patience is essential. 

Alternative Option: The Long-Stay Visa (Visa D) 

If you don’t qualify for an ERV but still want to live in Italy for an extended period, the long-stay visa (Visa D) may be an option. This visa allows expats to stay in Italy for longer than 90 days, but doesn’t automatically grant residency. 

If you apply for this visa, you may need to renew annually or apply for a residence permit separately. Unlike the ERV, some versions allow limited work or study options. 

For retirees planning a permanent move, the ERV is the better choice, as it is specifically designed for financially independent individuals. However, if you’re considering a trial period before fully committing, the long-stay visa could be a useful stepping stone. 

Cost of Living in Italy 

Italy is generally more affordable than major US cities, particularly in housing, healthcare, and dining. However, costs vary by region, and imported goods and luxury items can be expensive. Here’s a rough overview for an idea of what to expect: 

• Housing: Rent in major cities like Rome or Milan can exceed €1,500 per month, whereas smaller towns and rural areas offer housing for €600–€1,000 per month. Property purchases are often more affordable than in the US, with some regions offering tax incentives for retirees. 
• Utilities: You can expect to spend €150–€250 per month on electricity, gas, water, and internet. 
• Groceries: A couple can comfortably spend €250–€400 per month shopping at local markets. 
• Dining out: Meals at a local trattoria cost as little as €15 per person, while fine dining can exceed €50 per meal. 
• Transportation: A monthly public transport pass costs €35–€50, and train travel between cities is efficient and affordable. Owning a car can be costly due to insurance and fuel prices. 

Budgeting Tips 

• Live like a local: Shopping at open-air markets and avoiding touristy areas helps reduce expenses. 
• Choose your region wisely: Southern Italy and smaller towns offer lower costs than major metropolitan areas. 
• Consider exchange rates: Fluctuations in the euro-dollar rate can impact your budget. 

Healthcare for Retirees in Italy 

Italy ranks among the top healthcare systems globally and offers high-quality medical care at a fraction of US costs. The public healthcare system is called Servizio Sanitario Nazionale (SSN). Once you obtain residency, you can enroll in the SSN, which provides access to public hospitals and clinics for a small fee. Costs vary by region but typically range from €388 to €2,800 per year for expats. 

However, while Italy’s public healthcare boasts high quality, wait times for non-emergency procedures can be long. Many retirees opt for private healthcare to supplement the SSN, offering faster appointments and English-speaking doctors. Private health insurance costs €1,000–€3,000 per year, depending on age and coverage. 

Tax Considerations for Retiring in Italy 

Like many countries, Italy taxes residents on their worldwide income. Understanding Italy’s tax system is essential for anyone hoping to retire overseas. 

Overview of Italy’s Tax System 

• Progressive income tax rates: Italy applies progressive income tax rates, with higher rates for higher income brackets.  
• Capital gains tax: A flat rate of 26% applies to capital gains, with exemptions for long-held real estate and primary residences.  
• Wealth tax on foreign assets: Italian residents owning foreign real estate are subject to the IVIE tax, which is set at 1.06% of the property’s value. Deductions are available for property taxes paid abroad.  
• Inheritance and gift taxes: Rates range from 4% to 8%, depending on the relationship between the deceased and the beneficiary, with specific exemptions and thresholds. 
• Property tax: This applies to real estate owners, and rates vary between 2% and 9% of the property’s cadastral value, depending on factors such as primary residence status and whether the purchase is from a private individual or a company. 

US-Italy Tax Treaty and Expat Tax Benefits 

US citizens must comply with US tax laws, including filing requirements with the IRS, even while living in Italy. However, the US-Italy tax treaty helps prevent double taxation, allowing retirees to claim credits for taxes paid in Italy. The IRS also provides expat tax benefits such as the Foreign Earned Income Exclusion and Foreign Tax Credit. Using these benefits, most Americans are able to erase their US tax bill entirely while living abroad. 

Best Places to Retire in Italy  

Italy offers a variety of picturesque locations that cater to retirees’ different lifestyle preferences. Here are some top destinations to consider. 

Tuscany 

Known for its rolling hills, vineyards, and historic towns, Tuscany provides a serene environment with rich cultural experiences. Cities like Florence and Siena offer art, history, and excellent cuisine. 

Umbria 

Often called the “Green Heart of Italy,” Umbria is a landlocked region with rolling hills, historic towns, and a slower pace of life. Towns like Perugia, Assisi, and Spoleto offer a mix of cultural attractions and beautiful scenery, ideal for a peaceful retirement.  

Lake Como 

Famed for its stunning lakeside views and charming villages, Lake Como offers a tranquil setting with a touch of luxury. The area is known for its beautiful villas and mild climate. 

Rome 

For those who prefer an urban lifestyle, Rome provides a bustling city environment rich in history and culture. The city offers numerous amenities, including theaters, museums, and fine dining. 

Amalfi Coast 

With its dramatic cliffs and coastal beauty, the Amalfi Coast is perfect for retirees seeking a picturesque seaside experience. Towns like Positano and Amalfi are known for their colorful buildings and stunning views. 

Sicily 

As the largest island in the Mediterranean, Sicily offers a unique blend of cultures, affordable living, and beautiful landscapes. Cities like Palermo and Catania provide rich history and vibrant local life. 

Puglia 

Located in the southern part of Italy, Puglia is known for its whitewashed hill towns, centuries-old farmland, and extensive Mediterranean coastline. The region offers a relaxed lifestyle with lower living costs. 

Le Marche 

This region offers both coastal and mountainous landscapes, with charming towns that are less crowded by tourists. Le Marche provides a peaceful environment with a rich cultural heritage. 

Abruzzo 

Known for its diverse landscapes, including mountains, beaches, and national parks, Abruzzo offers affordable living and a variety of outdoor activities. 

Tips for Choosing the Right Location 

• Healthcare Access: Ensure that quality medical facilities are within a reasonable distance. 
• Cost of living: Research property prices and daily expenses in the area. 
• Lifestyle preferences: Consider whether you prefer a quiet rural setting or a lively urban environment. 
• Community: Look into the presence of expat communities or local groups to help with social integration. 

Steps to Retire in Italy 

Step 1: Research and Plan 

Before making the move, spend time in the regions you’re considering. Italy offers diverse living experiences, from bustling cities like Rome and Milan to quiet countryside retreats in Tuscany or coastal escapes along the Amalfi Coast. Visit different areas, explore the culture, and get a feel for the pace of life. 

If you have ongoing medical needs, make sure your chosen destination has the right facilities. Consulting with expat groups or professionals who specialize in assisting retirees in Italy can provide valuable insight. 

Step 2: Secure the Right Visa 

The ERV is the primary option for retirees. Since this visa requires proof of passive income and does not allow employment, ensure that your finances meet the eligibility criteria before applying at the Italian consulate in your home country. 

If you’re not ready to commit to a permanent move, the long-stay visa (Visa D) allows extended stays but doesn’t automatically grant residency. 

Step 3: Secure Accommodation 

Finding a home in Italy is a crucial step. Renting can be a good option if you want flexibility before deciding on a permanent residence. If you choose to buy property, it’s essential to research regional real estate markets, property taxes, and legal requirements for foreign buyers. Some retirees opt for smaller towns or rural areas, where housing is more affordable than in major cities. 

Step 4: Open a Bank Account 

Having an Italian bank account is necessary for managing everyday expenses, including rent, utilities, and healthcare payments. To open one, you’ll need a Codice Fiscale (an Italian tax code), proof of identity, and proof of residence. Some banks cater to expats and offer English-speaking services, which can make the process easier. 

Step 5: Enroll in Healthcare and Manage Financial Matters 

Once you obtain residency, you can enroll in Italy’s public healthcare system. While public healthcare is of high quality, some retirees choose to maintain private insurance for shorter wait times and more flexibility in choosing providers. 

Step 6: Finalize Financial and Legal Matters 

Set up utility services, transfer pensions, and ensure compliance with tax laws in both the US and Italy. Consulting a tax professional will help you navigate US tax requirements, including FBAR and FATCA reporting. 

Tips for a Successful Retirement in Italy 

Integrate into the Community 

Building a local network will make your transition smoother. Joining expat groups can provide support while engaging in local events and markets will help you connect with Italian culture. Many expats find that getting involved in local activities helps them feel more at home. 

Learn the Language 

While English is spoken in tourist areas, day-to-day interactions, especially in smaller towns, often require Italian. Even basic Italian will enhance your experience and make daily life easier. Language schools, online courses, and immersion through conversation will help you improve over time. Many small towns have language exchange groups where you can practice Italian while helping locals learn English. 

Prep for the Bureaucracy 

Retiring abroad presents unique challenges. One of the biggest adjustments is navigating bureaucracy — paperwork for residency permits, tax registrations, and healthcare enrollment can be time-consuming. Hiring a local professional can help streamline the process. 

Stay Tax Compliant 

US retirees must still file annual tax returns and report foreign bank accounts. The US-Italy tax treaty helps prevent double taxation, but working with an expat tax professional ensures compliance with both countries’ tax laws. 

Embrace Italian Life 

Living in Italy isn’t just about the location. It’s also about the lifestyle. Take the time to enjoy the cuisine, traditions, and slower pace. Adjusting to these cultural differences with an open mind will help you feel more at home. 

Retire in Italy with Help from Greenback 

Retiring in Italy offers a unique opportunity to enjoy world-class culture, breathtaking landscapes, and a relaxed lifestyle. The more carefully you plan, the easier the transition will be. 

Need help managing your expat taxes? Greenback Expat Tax Services specializes in assisting US retirees abroad. Have questions about the process or next steps? Contact us, and one of our Customer Champions will happily address all your concerns.

Start planning your Italian retirement today and experience La Dolce Vita.