Fallen for the irresistible Italian lifestyle and eager to spend your retirement years reveling in La Dolce Vita? All you need is to get organised and speak to the right people, and by early 2023 you could be enjoying your golden years in Italy. To get you started, here are some useful pointers…”
Most popular visa for retirees
Unless you have Italian or wider European family connections, you will need a visa to move and become a full-time resident in Italy. Since Brexit, the most suitable option for typical British retirees is Italy’s Elective Residence Visa (ERV), or Visto per Residenza Elettiva.
ERV holders may not work in Italy and must prove a minimum annual income (pension, savings, dividends, rental income, annuities or other investments) of around €31,000 or €38,000 for a couple. Other requirements for eligibility include proof of accommodation – either a property you own or a rental contract, and private healthcare insurance valid for a year.
Applications are made in person at the Italian consulate in the UK and it’s worthwhile appointing an Italian legal firm to assist with the process. Once granted, the visa must be used within a year. Within eight days of arriving in Italy, you must register for an Elective Residence Permit – valid for a year but then renewable every two, this is the vital bit of paperwork that gives you official residency status.
Is there a Golden Visa in Italy?
Another residency option suited to better off Brits could be Italy’s Golden Visa, a type of fast-track investment visa like those offered in other European countries. Targeting high net worth individuals (HNWI), qualifying applicants are granted Italian residency on flexible terms in return for investing in the Italian economy.
They must also rent or purchase an Italian property and prove a level of income. Qualifying investment classes include government bonds (minimum €2million), corporate bonds or shares (min. €500,000), shares in a start-up (min. €250,000), or projects of public interest (min. €1million). Applicants must make their investment within three months of arriving in Italy. Their first investor residence permit lasts for two years but is renewable for a further three-year period.
Is taxation in Italy kind to foreign retirees?
The good news is that both HNWIs and British retirees with more average incomes can benefit from favourable tax rates in Italy. This is thanks to Italy’s so-called ‘Special Tax Regime’, a collection of tax breaks introduced in recent years and targeted at inbound foreigners.
Under Italy’s STR, a retired British person in receipt of a pension who moves to South Italy can opt to have all foreign sourced income, including pensions, taxed at a flat rate of just seven per cent.
In addition, all foreign investments and overseas properties are exempt from Italian wealth taxes (IVAFE and IVIE) and do not need to be disclosed. STR is available for the year in which a foreign retiree assumes Italian tax residency and then the following nine consecutive years. It applies only in one of Italy’s southern regions, namely Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia, and in a municipality with less than 20,000 inhabitants. Applicants must not have been tax resident in Italy at any time in the preceding five tax years.
Are there tax breaks for HNWIs?
Meanwhile, the STR also offers a flat rate option for HNWIs. Wealthy foreigners who choose Italian tax residency can opt for their non-Italian sourced income to be taxed at the fixed amount of €100,000 for the duration of 15 years. Relatives off the main applicant can piggy-bag off their STR status, opting for a yearly lump-sum substitutive tax on non-Italian sourced income of €25,000. Applicants must not have been tax resident in Italy for more than nine of the preceding ten tax years.
Your healthcare options in Italy
Wherever you retire, access to healthcare should be a primary concern. New arrivals on an ERV can register to join Italy’s state health system once they have their residence permit or by showing and S1 form. You do this at your local health authority (Azienda Sanitaria Locale or ASL), where you’ll be granted an annually renewable health card.
Your S1 form entitles you to reciprocal healthcare rights in European countries – it is available to all UK’s citizens of pensionable age and should be obtained from the NHS’s Overseas Healthcare Services office before you leave the UK. Italian state healthcare is largely free, buy contributions to some aspects are required. You can choose to have private healthcare instead of registering for the state system.