An offer you can’t refuse

It’s now official, and it’s tempting.

If you are a pensioner who has not been resident in Italy for the five years running up to your date of application, you can now opt for a tax regime which is highly favourable.    If you get your pension paid abroad, you can now choose to pay a flat rate 7% on your income (for the first five years of your residency in Italy).  The caveats are few:  your residence must be in the Mezzogiorno,  ie. south of Rome, and it must be in a comune with a population of less than 20.000 people.    Bearing in mind that the Italian tax year runs January to December with tax returns due the following June,  for those pensioners on a fixed income a 7% tax rate is certainly not to be dismissed.  Above all any foreign property or investments which would fall under the IVIE or IVAAFE rules, will be ignored by the Italian tax man, again for 5 years.

After your five years are up you will switch back onto normal tax rules.

So, where should you think of putting down some roots?  Ignore the houses for 1 euro game – if you are a pensioner you should be looking for places which are not built vertically, have access to health care within a reasonable drive,  a climate which isn’t too oppressive in the summer, and low year round costs as well as local shops and services.

If you are in Sicily, you are spoilt for choice.  In the province of Ragusa the comunes of Pozzallo (on the sea) Ispica (Capital of Art nouveau) Chiaramonte Gulfi (medieval hill town) Acate, Monterosso Almo and Santa Croce Camerina (home of Inspector Montalbano) are all comunes of fewer than 20.000 souls.

The pick of the bunch in the province of Siracusa are Palazzolo Acreide (one of the UNESCO baroque towns), Portopalo di Capo Passero – on the sea,  Bucheri, Canicattini Bagni – both within easy reach of Siracusa town.

Militello Val di Catania in the province of Catania and the least known of the Val di Noto baroque towns is also a possibility. 

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