Calabria Real Estate

7% Flat Tax Italy:  Tropea Is The Place For You !!

Imagine living in a historic and beautiful beach town, with crystalline water, stunning panoramas, unique sunsets, Mediterranean climate, history and culture, excellent and cheap food, and much more…Imagine paying only a 7% flat tax, and zero in property tax…

Where is this dream? TROPEA… Calabria… Italy!!

The 2019 Italian Budget Law introduced a new special tax regime, aimed at attracting individuals who hold foreign pensions to transfer their tax residence to one of southern Italy’s municipalities. This is known as the “Foreign Pensioners’ regime” as it requires the individual to already be in receipt of a foreign pension. Starting from 1 January 2019, beneficiaries of this special regime, may opt to pay a substitutive tax of 7% on all foreign source income in lieu of the progressive tax rates (which range from 23% to 43% plus 3% as local taxes).

The special regime, which took effect from 1 January 2019, allows taxpayers holding foreign pensions, who have not qualified as Italian tax residents for at least the previous five tax periods, to opt for the application of a flat tax of 7% to all foreign source income.

Taxpayers can opt for the flat tax of 7%, regardless of their age and citizenship if they:

Transfer their tax residence from a country with an administrative cooperation agreement with Italy to one of the following Italian southern regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Apulia, Sicily and Sardinia, in a Municipality with a population of less than 20,000 inhabitants; and

Have not been tax residents in Italy for at least five tax periods prior to the transfer to Italy; and

Currently are in receipt of a foreign pension.

By claiming the special tax regime, taxpayers will be exempt from additional income tax, local taxes and wealth taxes on all foreign source income. Moreover, for the entire length of the option no foreign asset monitoring obligations apply.

Also, if you buy a home there, as a ‘prima casa’, you will get tax relief, with zero costs in property tax.

Piero Lorenzo, broker-owner of Lorenzo International Real Estate, who specializes in helping foreign buyers to purchase homes in Italy, is available to assist you in this exciting process from A to Z.