Italy flat tax 7% for foreign pensioners: 74 new eligible municipalities from April 2026

The population threshold under Article 24-ter TUIR rises from 20,000 to 30,000 residents. Below is the complete updated list by region.

Effective April 7, 2026, the Italy flat tax 7% for foreign pensioners — governed by Article 24-ter of the Italian Consolidated Income Tax Code (TUIR) — becomes accessible to a significantly wider range of municipalities. Law No. 34 of March 11, 2026 (Article 26, paragraph 1) raises the maximum population threshold from 20,000 to 30,000 residents. As a result, 74 previously excluded municipalities across Southern Italy now qualify for the regime.

How the Italy flat tax 7% for foreign pensioners works

Under Article 24-ter TUIR, foreign nationals who transfer their tax residence to a qualifying Italian municipality can elect a 7% substitute tax on all foreign-source income — including pensions, dividends, capital gains, and rental income from abroad — for a maximum period of ten years. Furthermore, the regime exempts beneficiaries from IVIE, IVAFE, and foreign asset reporting obligations (Form RW).

To qualify, the municipality of residence must be located in Southern Italy (or in earthquake-affected areas of Central Italy designated by law), and must have a population below the statutory threshold — now raised to 30,000 residents. In addition, the applicant must not have been tax resident in Italy in any of the five years preceding the first year of the election.

Why this legislative change matters

Until April 6, 2026, the regime was limited to municipalities with fewer than 20,000 residents. Consequently, many well-connected mid-sized towns were excluded solely on the basis of population. The new threshold of 30,000 residents, therefore, significantly broadens the regime’s geographic scope. These are not remote villages: they are functioning towns with hospitals, schools, public transport, and an urban quality of life that many smaller comuni cannot offer.

Moreover, the profile of the typical beneficiary shifts accordingly. Previously, the regime primarily attracted retirees willing to settle in very small or rural communities. Now, however, it becomes a viable option for a wider category of foreign pensioners who prefer the amenities of a larger town while still benefiting from the Italy flat tax 7% rate.

New eligible municipalities by region: 74 additions (ISTAT data, January 1, 2025)

Campania: 23 new municipalities

Campania has the largest share of newly eligible towns — 23 in total. Notably, several municipalities in the Naples metropolitan area now qualify, including well-known destinations such as Pompei, Gragnano, and Vico Equense.

Sicily: 18 new municipalities

Sicily adds 18 towns to the eligible list. In particular, well-known destinations such as Noto, Erice, Scicli, and Milazzo now fall within the scope of the Italy flat tax 7% for foreign pensioners, making the island even more attractive for international retirees.

Puglia: 18 new municipalities

Puglia, equally, gains 18 newly eligible towns. Among these, destinations such as Ostuni, Conversano, and Putignano are particularly notable for foreign retirees seeking a combination of cultural heritage, coastline, and practical amenities.

Sardinia, Abruzzo, Calabria and Molise: 13 further municipalities

Beyond the three largest regions, the update also unlocks eligible towns in Sardinia (7), Abruzzo (5), Calabria (2), and Molise (1). In Sardinia, for instance, towns in the Cagliari metropolitan area such as Selargius, Assemini, and Sestu now qualify. Similarly, Abruzzo adds coastal towns including Roseto degli Abruzzi, Francavilla al Mare, and Giulianova.

What to do if you have not yet relocated

Should you not yet have completed your transfer to a municipality with fewer than 20,000 inhabitants, we hope this updated list may prove useful. Please do let us know once the relocation has been finalised. Our team will, in that case, be ready to assist you with the formal election of the regime and all related compliance steps.

Who qualifies for the Italy flat tax 7% as a foreign pensioner

The regime is available to individuals who receive a foreign pension and transfer their tax residence to an eligible Italian municipality. It applies for up to ten tax years and covers all foreign-source income under a single 7% substitute tax, regardless of amount or type. Furthermore, it is particularly suitable for retirees from the United States, United Kingdom, France, Germany, Switzerland, and other countries with which Italy has concluded a double tax treaty providing for source-state pension taxation.

To summarise, the key eligibility conditions are: (i) receipt of a foreign pension; (ii) transfer of tax residence to an eligible municipality; (iii) no Italian tax residence in any of the five years preceding the election. As a consequence, individuals who already reside in Italy and are tax resident there do not qualify for the regime at this stage.