Retire in Italy: Visas, Healthcare, Taxes, & More

From delicious cuisine to the affordable cost of living, laid-back pace of life, and rich culture, there are many reasons Americans may want to retire in Italy. Fortunately for retirees — or anyone with enough passive income — a dedicated visa puts that goal well within reach.

We’ve rounded up some of the most pertinent information for Americans thinking about retiring in Italy. Read on for details on visa eligibility, healthcare options, tax implications, and more.

Benefits of retiring in Italy

Some of the top reasons to consider retirement in Italy include the following:

• Cost of living: Italy boasts a significantly lower cost of living than the United States. By some estimates, consumer prices — including rent — are about 32% lower in Italy compared to the US (according to Numbeo).
• Quality of life: “La dolce vita” (“the sweet life” in English) isn’t just a saying. Italians live by this unofficial motto, as evident in their relaxed pace of life, appreciation of good food and wine, and strong family and community bonds.
• Weather: While the weather in Italy varies slightly depending on location and elevation, most of the country enjoys a Mediterranean climate characterized by mild winters and warm summers.
• Healthcare system: The World Health Organization, Bloomberg, and other organizations have named the Italian healthcare system one of the best in the world. Perhaps that’s why Italy has one of the highest life expectancies in the world at 83 years.
• Cuisine: Few cuisines are more beloved worldwide than Italy’s — which includes much more than just pizza and pasta. Cooking styles vary widely across the country, with dishes as diverse as osso bucco (braised veal shanks), arancini (fried rice balls), and tortellini e brodo (tortellini in broth).
• Arts & culture: It’s no surprise that the home country of the Renaissance has a rich, storied culture. From ancient architectural marvels like the Colosseum to museums like the Uffizi gallery, opera houses, and archaeological sites like Pompeii, you could spend several lifetimes exploring Italy’s cultural wonders.
• Natural beauty: From the rugged coastlines of the Cinque Terre to the snow-capped Italian Alps, turquoise-blue waters of Sardinia, and rolling green hills of Tuscany, Italy offers picture-perfect views everywhere you turn.
• Ease of travel: A wealth of public transportation makes it easy to get around Italy, from big cities to beach towns to mountain villages. Its central location within Europe makes travel options to other nearby countries plentiful and relatively affordable.

Potential challenges for retirees in Italy

There are pros and cons to any decision, and retiring in Italy is no exception. Here are some challenges retirees may face in Italy: 

• Language barrier: Italy has one of the lowest English proficiency rates in Europe, particularly in the south. English is much more prevalent in big cities, tourist areas, and among younger generations. A basic level of Italian will make everyday interactions like shopping, banking, and finding housing easier.
• Slower pace: Italy’s laidback nature can be a double-edged sword. While many retirees enjoy the relaxed pace of life overall, it can be frustrating when they need something urgently.
• Bureaucracy: Expats living in Italy must deal with a fair amount of bureaucracy. Processes like getting a residence permit, closing on a property, and paying Italian taxes can be slow-moving and involve a great deal of paperwork.

How to retire in Italy

If you plan on spending more than 90 out of every 180 days in Italy, you’ll need to apply for a long-stay visa.

Fortunately, Italy offers a visa specifically for those with significant passive income, like retirees: the elective residence visa — residenza elettiva.

Italy retirement visa: Eligibility & requirements

To qualify for Italy’s elective residence visa, you must:

• Bring in at least €32,000 (~$34,536) per year in passive income
  • There are additional income requirements for those who want to bring family members:
    • €32,000 (~$34,536) per year more for a spouse
    • €6,400 (~$6,907) per year more for a child
• Have found a place to stay long-term in Italy
• Purchase private insurance with coverage of at least €60,000 (~$64,745)

Permissions, restrictions, & duration

The Italian elective residence visa allows you and your immediate family to legally live in the country for one year. You may renew the visa for an additional two years indefinitely as long as you continue to meet the qualifications. 

After five years, you may apply for permanent residency. Once you’ve resided in Italy for 10 years total, you may apply to become an Italian/EU citizen.

While holding this visa, neither you nor any family members you bring with you may seek active employment. You must also make Italy your primary place of residence and register there for civil and tax purposes.

Required documents & application process

To apply for Italy’s elective residence visa, you must:

• Confirm your eligibility
• Gather the required documents:
  • Completed visa application form
  • Valid passport
  • Passport-sized photo
  • Proof of passive income (bank statements, Social Security statements, last two US tax returns)
  • Proof of long-term accommodation (signed lease or deed for a property in Italy)
    • Note: Temporary accommodations like a hotel room or Airbnb are not valid
  • A letter of intent explaining why you want to move to Italy
  • Money order made out to your local Italian consulate/embassy for $126
• Schedule an appointment at your nearest Italian consulate/embassy
• Submit your application at your in-person appointment
• Receive approval (typically within two to three months)
• Collect your visa in person or by mail (at certain consulates only)

Once you arrive in Italy, you must apply for a residence permit within eight days and have your fingerprints taken at your local police headquarters.

How much does it cost to retire in Italy?

At a bare minimum, you’ll need €32,000 (~$34,536) per year — about €2,667 ($2,880) per month — in passive income to qualify for Italy’s retirement visa.

Given that the average cost of living for one person in Italy is about $1,945 per month, that minimum requirement may be all you need. But, if you want to live in a more expensive area or live a more extravagant lifestyle, you may need more than that.

Best places to retire in Italy

Florence

Florence — the birthplace of the Renaissance — is an art lover’s dream. Museums like the Uffizi Gallery and Galleria dell’Accademia are among the best in the world, housing masterpieces from Michaelangelo, Botticelli, da Vinci, and more. Add to that stunning plazas and cathedrals, artisanal markets, and charming cafés, and it’s easy to fall in love with Florence.

And if you ever need to escape the hustle and bustle of the city, the Tuscan countryside — with its verdant landscapes and world-class vineyards — is just a short drive away. Popular neighborhoods among retirees include Duomo, San Marco, and San Niccolò.

Rome

Italy’s modern capital, home to nearly 2.9 million people, has it all: ancient ruins, stunning Renaissance architecture, museums, green spaces, and restaurant after incredible restaurant. Even locals can’t resist the allure of landmarks like the Colosseum, the Trevi Fountain, and the Sistine Chapel.

Some of the most popular neighborhoods for expat retirees include Aventino, Trastevere, and Prati.

Sicily

The island of Sicily, located in southern Italy, boasts warm weather, sunshine, white sand shores, and crystal clear waters. No matter where you are in Sicily, stunning beaches, charming seaside villages, and striking mountains (and exciting volcanoes!)  are never too far away. 

With its own language, style of cooking, and cultural traditions, Sicily has a notably distinct feel from mainland Italy — and that’s what expats love about it. Some of the top areas for expats in Sicily include Palermo, Catania, and Syracuse.

Healthcare options for retirees in Italy

As we mentioned above, Italy has an excellent healthcare system. All Italian citizens and legal Italian residents have access to free or inexpensive public services through the Servizio Sanitario Nazionale (SSN).

While a federal agency oversees the SSN, each region runs its own individual program. Northern and central Italy tend to have better healthcare than other regions, especially those located in the south. Although coverage is comprehensive and care is generally good, expats may experience long wait times, crowded facilities, and inconsistent quality between regions.

As a result, most expats choose to supplement public healthcare with a private policy. Expats in Italy can expect to pay between €100 (~$108) to €500 (~$540) per month on private health insurance depending on factors like their age and health. 

Do Americans pay taxes in Italy?

Americans living in Italy are subject to US taxes, and may be subject to Italian taxes as well. We’ll break down how it works below.

Italy taxes

How the Italian government taxes you depends on your tax residence status. Italy defines tax residents as those who a) spend more than 183 days out of the year in the country and b) meet one or more of the following criteria:

• Have registered as official residents, OR
• Have established a habitual abode in Italy, OR
• Have made Italy the center of their business, economic, or social interests (such as having a family there)

Tax residents pay taxes on worldwide income — which includes any US-based retirement, Social Security, or pension payments — while non-tax residents pay taxes only on Italian-sourced income.

The national tax rates in Italy for 2024 are as follows:

Income (EUR)	Income (EUR)	Tax Rate
Up to €28,000	Up to ~$30,217	23%
€28,001 to €50,000	~$30,218 to ~$53,964	35%
€50,001+	~$53,965+	43%

In addition to national taxes, expats in Italy are also generally subject to regional taxes (1.23% to 3.33%, depending on location) and municipal taxes (0% to 0.9%).

US taxes

It may not seem fair, but moving abroad does not absolve you of your US tax and reporting obligations. American citizens and permanent residents whose income surpasses the minimum reporting threshold must file an annual federal tax return. In some cases, they’re even subject to state taxes.

The good news? US expats qualify for a couple of special tax breaks, like:

• The Foreign Tax Credit: The FTC provides Americans with dollar-for-dollar credits on any foreign income taxes they’ve paid, which they can apply to their US tax bill. In a country like Italy where taxes are higher than in the US, this typically not only eliminates your US tax liability but also may give you surplus credits to use on future tax bills. 
• The Foreign Housing Exclusion: The FHE lets US expats write off certain qualifying housing expenses in a foreign country, like rent, utilities, and property insurance, among others. To qualify, expats must pass either the Physical Presence Test or the Bona Fide Residence Test.

Keep in mind that moving abroad may add to or change your tax obligations. A couple of the most common reports expats must file include the:

• Foreign Bank Account Report: Americans with over $10,000 across foreign financial accounts must file the FBAR 
• Statement of Specified Foreign Assets: Americans with over $200,000 in foreign assets on the last day of the tax year — or more than $300,000 in foreign assets at any point in the tax year — must file Form 8938.
  • Note: Americans living within the US may need to file this report as well, but the reporting thresholds are much lower: $50,000 instead of $200,000, and $75,000 instead of $300,000.

Ease into retirement abroad

Let’s face it — taxes are probably the last thing you want to deal with when settling into your new home country. Bright!Tax specializes in US expat taxes, and has already helped thousands of clients in hundreds of countries around the world — including Italy — file optimized taxes with minimal effort.

Resources

1. Cost of Living Comparison Between United States and Italy
2. Country Comparisons – Life expectancy at birth
3. Where in Italy do people speak the most (and least) English?
4. Elective Residence Visa Italy
5. Elective Residence Visa | Italian Visa
6. Italian citizenship
7. Elective residency
8. ESTRATTO TABELLA DIRITTI CONSOLARI – dal 01.04.2024 al 30.06.2024
9. Your guide to the cost of living in Italy
10. Italian Healthcare System
11. Getting health insurance in Italy
12. Italy – Overview
13. Italy’s 7% Flat Tax Incentive for pensioners
14. The ‘cheapest’ area in Italy is a stunning spot where expats can live on as little as £500 – full list