New Extension of the Tax Break 7% for Foreign Retirees who move to Italy

In this post, we will talk of an important extension that took place in April 2026 and that regards the Tax Break 7% for foreign retirees who want to move to Italy.

Starting from April 7 2026, the cities that are eligible for this tax break, inside the 8 Regions of the South of Italy, Abruzzo, Molise, Campania, Basilicata, Puglia, Calabria, Sicilia and Sardegna, need to have less than 30.000 inhabitants, while the previous limit was 20.000 inhabitants.

This means that 50 more cities are added to the list of "Comuni" who are eligible for the Tax Break 7% for foreign retirees.

Iglesias - Sardinia

1. WHAT IS THE 7% TAX BREAK FOR FOREIGH RETIREES?

The first point that we must consider is what is the Tax Break 7% for Foreign Retirees: you can find all the references and information on this interesting Italian Tax Break here:

New interesting Tax Breax for retired Americans who want to move to Italy: a flat tax at 7%

Agevolazione Flat Tax del 7% per pensionati che si trasferiscono in Italia: il 401(k) e l'IRA americano sono "pensioni estere"?

Agevolazioni fiscali per venire in Italia: gli ultimi chiarimenti sul Regime della Flat Tax 7% per i pensionati esteri

In a few words: if you move to Italy in a Region of the South of Italy, like Abruzzo, Molise, Campania, Basilicata, Puglia, Calabria, Sicilia and Sardegna, and you have a Foreign Pension, you can have an important Tax Break:

- You will pay in Italy only a Flat Tax of 7% on all foreign incomes, not only the pensions: this means that you apply the 7% taxation also on US interests, dividends and capital gains.

- You must move in a small city, with less that 30.000 inhabitants.

- You must have Tax Residence in Italy.

- You can apply this 7% Tax Break for 10 consecutive years.

2. WHAT IS THIS NEW EXTENSION ABOUT?

The extension concerns the Italian cities and villages that are now eligible for this Tax Break 7%: previously, only the cities with less than 20.000 inhabitants were eligible for the Tax Break 7%.

With this new extension, also the cities with less than 30.000 inhabitants are eligible for this Tax Break: this means that all the villages and cities with a population between 20.000 and 30.000 are now included in the Comuni who are eligible for the Tax Break.

3 WHEN THIS NEW EXTENSION HAS BECOME EFFECTIVE?

Another point we must consider in our analysis is the fact that this extension took place on April 7 2026: this means that the extension works for every Foreign Citizens who have moved his/her residence by making the registration to the Anagrafe of the Comune after April 7 2026.

EXAMPLE

Suppose that two US Citizens have decided to move to Italy in 2026 and suppose that the first one has made the registration to the "Anagrafe" of a Comune of the 8 Regions in the South of Italy on April 4 2026, while the second one has made the registration to the "Anagrafe" on April 10 2026.

In a case like this, we will have this paradox:

- the first US Citizen will have to move his/her residence in a city that is inside the list of Comuni with less than 20.000 inhabitants.

- the second US Citizen, instead, can move his/her residence in a city that is inside the (broader) list of Comuni with less than 30.000 inhabitants.

4. MANY MORE CITIES ARE NOW ELIGIBLE FOR THE 7% TAX BREAK.

This legislative news has enlarged the list of Comuni who are now eligible for the Italian residence of Foreign Senior Citizens: we have calculated that approximately, there are at least 50 new cities that can be chosen by the US Retirees.

Let's take a look at some of the most interesting ones:

1 - ROSETO DEGLI ABRUZZI

Region: Abruzzo

Inhabitants: 25.582