Thank you Tommy. I have decided to take my SS next year early so although I bought land in Portugal I am going to apply for Italian Citizenship in a town of less than 20 thousand. Thanx so much for the reminder. I was not going to be a pensioner for 5 more years but decided it would be advantageous for my Europe move to take it early and qualify for this tax discount for 10 years. Cheers. Gina in Upstate NY moving to Europe
Just remember to make sure you meet all the requirements! If so, it’s an amazing benefit. And you’re helping Italian communities that need an influx of people and money. Let me know how it goes!
You should check with an accountant. I believe you must prove residency with the local police. The idea of the 7% flat rate is to have people living in these towns supporting the local economy. The Italian government has an army of revenuers.
@@traveltirement have you ever thought of putting up a business of helping people especially from the US (since you're from the US) move to Italy or France? Especially now that Portugal has scrapped their 10% NHR tax. Partnering with a solid realtor, a renovation/construction company and tax guy would be awesome.
Great video. There seems to be varying opinions as to what qualifies as a foreign pension. Some accountants are saying that any overseas capital holdings, capital gains or passive income from private saving accounts would qualify as a foreign pension. However, the accountant in your video is claiming that only an official pension qualifies. It would be good for your accountant to clarify that definition of foreign pension income more if possible.
A pension for the Italian tax authority is any tax-deferred account (401k, 403b, 457, IRA, SEP, Roth, etc) or an actual pension. If you have that, then all your other income gets thrown in for the 7% tax treatment. That’s my understanding.
Thank you to you both for one of the best and clearest explanations of the 7% tax program. One question: How long are you required to reside in the particular municipality in order to get the 7% tax rate? Is it 183 days? For example, say you reside 6 months in a southern area, and have a second home in the north (non-7% area), and stay there for a lesser amount of time, does that work?
Thank you for your time and effort. This vidio was perfect . And thanks to your financial friend in Italy 🇮🇹. Both of you are handsome and polite. By the way. I loved the green bathroom fixtures I would redo the floor tiles to match with the walls and keep that bath funky green and yellow. I would then paint 🎨 some lemons and bright art work to go with the style😊.
Great video Tommy. Would a Roth IRA or traditional IRA work instead of Social Security? For most people it’s far smarter to wait until age 70 to start taking Social Security. Would withdrawals from an IRA of either type work under this scenario? Also, I just wanted to double check to make sure I heard correctly. In the 7% zones, they are not going to wealth tax you on any real estate, homes, or other other financial accounts in the United States?
Yes, a Roth or Traditional works as a “pension”. Roth gains are also taxed at 7%. You are correct your houses and assets around the world are not liable for wealth tax. Only income.
@@traveltirement thanks for the response, Tommy. For those who don’t completely understand, I think it’s accurate that you would be taxed for these things outside the 7% zones. And the income tax, in those non-7% zones, if I recall, starts at around 25% from dollar one. If I’m wrong, let me know. And then it goes up pretty quickly after that. And in these non-7% zones, you would be hit with a wealth tax. If you own a home in the United States, you would get tagged for that, but apparently the property tax is a set off so it is kind of a wash. But for IRAs and brokerage accounts, you would get hit for the wealth tax. In those non 7% zones. Again, this is something that people have to be sure about and if I have this wrong, please let me know.
@@traveltirement sorry to bug you. I assume they wouldn’t hit you on the gains from your IRAs or brokerage accounts. Only on the withdrawals. Is that correct?
@@stevenbrady440 Yes, These are small "little details" not too many people (who do these type of videos) mention while they tell people how great it is to move to Italy. BTW, THIS was an excellent video to help with this type information! I'd like to see this video as a standalone video and not co-mingled with the properties however. The wealth tax has really made me reconsider Italy as my new place (unless of course I would get into the 7% tax regime but I'm just not sure I want to live in a small(er) comune to qualify for it). As I understand, Spain and France also have wealth taxes but ONLY if you are above a threshold of several hundred thousand Euros. Not an expert, but this is my understanding as I delve into these details. Many people comment on these type of videos that they will just rent their house in the US but don't think (or they don't know) that just by owning it, you owe the wealth tax on it (IF you are not part of the 7% regime). Yes, when they sell it, no capital gains for Italian tax purposes but it's kind of a "pay as you go" thing. Same with stock sales (i.e. capital gains). Of course I truly think some (many?) people just don't claim it on the taxes (and how would Italy be aware that they own it? ) Some day the data sharing between countries will probably exist to prevent this but I don't think it does now. Of course, if you get caught the fines are quite steep. I wouldn't necessarily say that the property tax is 'a wash' as it really depends on how much the property is worth (I believe the wealth tax is based on this, the property value ...how do you value a US property for Italian tax purposes is my question? We don't have 'Cadastral' values in the US like in EU) and how much the US property taxes are. True, that the US property tax you pay can be deducted from you Italian taxes. I'm no expert...this is just what I have pieced together from videos like this. One should definitely consult and expert BEFORE making a decision. I just shake my head at all the comments in these type of videos when I read "we are moving in 3 months!" Yea! You probably have no idea about these 'small details' that await you.
@@traveltirement Best to take advise from EU perspective, as it may well effect. The True Born Citizen Act requires a person born in EU with both parents born in EU to live and work, Bio Data of person and both parents on Passport, Identity Documents, automated passport control, the EU will be free of Non EU persons from the Mediterranean to the North Sea.
Great video on the basics of the program and good choices on the properties to show the nice range that is available. Do apartments in Italy have the equivalent of monthly condo fees. If they do not how is that handled? I am hoping to spend a month in Italy in the fall, during the rainier season to get a feel on how it is to live there outside of the tourist season. I am still trying to decide on a small town to live in for that month.
As an American, I have an interest in purchasing a small residence in Molise or Abruzzo. My budget is 40,000 Euro... so 25,000 to 30,000 Euro for the property and the remainder in renovations. What is the approximate property tax for such a residence? Are there annual inspections? If I lived there continuously only 2-3 months per year, then would a B and B rental for the remaining months be permitted?
No property tax if it's your primary residence. If a rental, probably a few hundred euros per year. No annual inspections that I know of. Yes, you can Airbnb your place when not there. If you don't rent it over 30 days per tenant, you don't have to register as a business. But you do have to pay tax on any income that you make with it. And that income is not eligible for the 7% treatment.
Very helpful information. Would a V.A. Veteran disability pension be taxable? 21:30 helpful to know. Looking at this option if I go with getting German citizenship based off my mother. Great properties. Number 3 looked incredible with the exposed stone. Though I would rather look at properties below the 60k€. Really enjoy your content thanks for sharing. 👍📺
Awesome video as always! I have a quick question. Did Nicolò Bolla say that if I have a government pension it is not taxed if I do not become a citizen. So that would mean if I retired as a state employee, I would not be taxed on my pension. Does that apply to the entire country, or just the 7% tax regime regions. Thank you so much for all your information. I really enjoy all your videos.
So here's a question. What if we receive medical disability from the US military? This is not a retirement pension, but money received due to military service. How would that work?
I’m an American. I’m a retired New York City Transit Authority worker. I also get Social Security Benefits. I have an excellent Credit Score. I can put 10% down on the house. Can you get a mortgage on a house in Italy? I love small towns, so living in one wouldn’t be a problem for us. I have property in Arizona. Where can I get more information? Thank you for sharing.
Unfortunately, mortgages are quite difficult to get for foreigners. They don't use credit scores in Italy. If you must have a mortgage to buy, I'd recommend you rent for a year in Italy to establish yourself. That will make it much easier. Or, of course, save up the money to buy in cash.
Thx. Now the day I retire I will travel quite a bit to all my relatives that lives all around the world and to places I want to visit. Is there a rule how long time I must stay in my new apartment? One last question is it cumbersome to obtain the 7% tax and will it take a long time. Thx.
To be a tax resident of Italy you’re supposed to live there at least 183 days. But that’s not the only thing they look at. The 7% tax benefit doesn’t take any time. You first have to apply for a visa to stay in Italy long-term. Then your first tax season, you just elect the 7% tax treatment. Of course you have to provide documentation.
@@traveltirement thx. 183 days. Hmm that could be a problem. Guess I need to contact a layer or tax consultant in Italy how deal with that. Thx for a great channel
Great video! Very informative. At one point Mr. Bolla says that the 7% does not apply to government pensions but later in the video he says it does apply to pensions. Maybe he meant private pensions? Also here in the US if we sell our primary residence, there is no tax on the capital gains (if any). Would the 7% tax in italy apply to capital gains when selling a house in the US if I became a tax resident of Italy during that year?
I've read several times if you can prove your grandparents or great grandparents were "born" in Italy you get automatic citizenship. Does anyone know about this? Stories like this are too good be true. Thanks!
It's a real thing. It's called Jure Sanguinis or "right of blood". Here's everything you need to know: italiancitizenshipassistance.com/jure-sanguinis/
Great tax information. I biked through Grammichele a few years ago. It is an interesting drive-by, but i would not want to live there. The hexagonal street plan is quite unique and this history interesting, but it is pretty RAW: lots of graffiti and not a picturesque hill town. Much nicer towns nearby.
The visa you would apply for is the Elective Residency Visa. The minimum income is €31/32k (I've seen both) for a single person and €38k per year for a couple. Just know that each Italian consulate in the US has discretion with this number. And, no, you cannot show money in a bank account to meet this requirement. You must have at least one "pension". (could be an IRA, Roth, 401, etc. or Social Security).
I'm in Houston and my tax on SSA is a whopping "0%". However, the State income tax is "0%". So if someone came from Texas, they would have to start paying on SSA that you once didn't have to. So what is the benefit of living in Italy over Texas? Texas has high property taxes, school taxes, and mud taxes. In other words, you are paying taxes even though your taxes are not on your SSA or State. Those moving out of California have been moving into Texas. They show up, put $300,000 on the table, and still have another $300,000 from the money they got from selling their home back in CA. This has been driving up the cost of homes in many states including Texas. Cheap homes in Italy may not mean affordable living in Italy. After the 10-year 7% is up, you will have to pay close to 45% tax on your SSA. That would be a showstopper for most people. However, you also have to look at the benefits of the Italian medical system and the price of private medical insurance. Medicare costs are on average around $400 per month. That does not cover all costs, which means that subsidy insurance will cost $300 per month, you are stuck paying whatever Medicare doesn't cover, or just go without being treated because it's too expensive. Medical treatment in the States is threw the roof. Dental work is a fraction of the cost overseas as compared to overseas. My 80-year-old father flew to the UAE for new teeth and it cost him about $3,000. He was quoted $90,000 in the states. I wonder what it would have cost in Italy? I should also point out that medical care quality in the States has dropped over the years. I cannot have the same doctors anymore. The ones they assign to me a quacks at best. I recently broke my leg and it cost me $7,000 for an x-ray, emergency room visit, cast, and crutches. No pain medication because of the federal government crackdown. I took tramadol which does next to nothing. A few weeks later I had another x-ray and I learned that they didn't set the bone right. I still haven't gone back on that one. It doesn't hurt and I'm walking fairly well for someone 60. So all I can do is wonder what the next medical shoe is going to fall in my life. So Italy might have higher income taxes but is that offset by prices in the States? From what I remember, Italy has an affordable and professional medical care system. It could be that the taxes might be higher in Italy but in the end, you might end up with less out of pocket when considering all aspects. This would make the 7% zones appealing but regular taxes put one at about the same as living in Texas. Obviously, other States like Georgia have a state income tax as well, which increases overall out-of-pocket taxes paid per year. I'm just trying to justify why it would be more beneficial to live in Italy over staying in the United States. Obviously, prices for real estate are very affordable but what about the the rest? Does it make financial sense to move there or not? Even if you are a multimillionaire, you wouldn't want to be paying 45% of your wealth to Italy. However, those with lower incomes might find it more affordable when one looks at the whole cost of living considerations.
It’s 100% about if you have a dream of living in Italy. Some things are different there. If you don’t like the idea of those things (like taxes) being different, you don’t have to live there. Just that simple!
Correct me if I'm wrong but isn't it impossible to get a home mortgage in Italy as an American coming from the States under €100,000 Euros? I believe you have to come up with half the money as well. So a €50,000 mortgage would require you to put down around $64,500. You also have to present 2 years of tax records as well. If you are on Social Security, I'm not sure how that would work as those who don't make over their SSA, don't need to file taxes.
My mortgage expert says they have a €100k minimum loan amount. Maybe other companies will do smaller loans. I know in Italy and France the minimums have gone up the last couple of years. Small loans just aren’t worth it for the lenders.
@@traveltirement Thank you for the information. I was really wanting to work into a mortgage but unable to come up with the minimum $58,000 U.S. Dollars. I will have to come up with a different plan. I don’t mind finding some place in one of these 7% areas to fix up as I go along. The trick would be to have it somewhat livable so I’m not having to rent an apartment. My research into moving to Italy would be a dream come true. My Italian residency visa has expired and I probably would need to start the process all over again. My problem is that SSA only pays out $2,200 per month. It might be just as the minimum amount to qualify for the visa. I will have to go down to the Italian consulate here in Houston. Thanks for the information and your video. They are fun to watch.
Could you please list some properties in areas that aren't in high earthquake prone zones? Most of Sicily falls in Zone 4, which according to what I've been told is a dangerous Zone for earthquakes. I also have another question, I was told that it's extremely difficult for Expats to obtain a mortgage in Italy, I was told that Italian banks make it pretty much impossible for someone from a non EU Country to obtain a mortgage under 200,000€. Is that accurate? How can someone on Social Security, moving to Europe because of the lower cost of living, come up with $50, $70 or $100K cash for a home if Italian banks won't finance the homes? Can you please clear this up for me? I would love to move to Italy. Please clear this up for me. Thank you!
Earthquakes should not be a worry. Since 1990 (34 yrs) just over 700 people have died in Italy from earthquakes. Just in 2022, over 3,100 died in Italy from car accidents. I’ll take the earthquakes. Yes, mortgages are difficult to get. There are no credit scores. To get a mortgage, rent in Italy for a year or two to establish yourself. I hope that helps!
The goal of the legislation is to revive the southern part of Italy where they have lost a lot of population. The north is where folks have migrated, so they don’t want to encourage more.
Do you happen to know how Italy handles the taxation Roth IRA investments. In the US, Roth IRAs are tax free accounts, so cap gains, dividends, and distributions are not taxed. Does Italy respect that tax status, or does it treat this as any other investment account, and tax cap gains and dividend income? Appreciate the content, thanks.
I don't have any pension. I'm a Canadian early retiree living off passive income from my investments. I guess I wouldn't quality. Correct? Thanks for making these informative videos. I am an new subscriber.
Possibly. If you can show a consistent "passive income" from them. Like if you live off just the dividends, that you can probably convince them of. Just know that each consulate in Canada (where you apply for a visa) has a lot of discretion over what they approve. It's not just a check-the-box process.
@@traveltirement Oh. Ok. Great! It's nice to know. I travelled to Rome, Florence, Cinque Terre, Naples and the Amalfi Coast back in 2022 for 2 weeks and I was enchanted with the country. I have been thinking about slow travelling again and possibly moving to Italy making it my base for other travels across Europe. Setting up residency in Italy would be a great way to accomplish that without having to do the Schengen shuffle every 90 days. Thanks! Please keep making these videos. It's like I am mind-travelling to Italy everytime I watch your videos.
What parts of Umbria? I'm trying to find property that's a fairy quick or inexpensive commute to Genoa where I plan to study voice with a teacher there unless you know of voice teachers for opera in the various provinces that qualify for the 7%
Thanks so much for the great video! I've signed up on your website. Optimistically, if I get the 7% flat for 10 years, then become an Italian citizen at age say 70, would it then make sense to relocate to Portugal for the lower tax rates?
@traveltirement Agree, but once I have my Italian citizenship, I can stay in Italy some of the year, sell my US home, and take that money and buy a different place in another great location like Portugal. Then I could spend time in each and still benefit from the lower taxes.
I don't know the tax treaty between the UK and Italy, but in the US, you'd get a tax credit for the 7% you paid in Italy on your US return. The incentive is you live in Italy for probably 50% of the cost of living in the UK. And live the Italian lifestyle, food, friendly people, and amazing history. And you'd pay 7% in Italy vs 23%+ which is their first tax bracket for progressive taxes. Thanks for watching!
Not exactly. You pay tax in Italy, then when you file in the US, you get a tax credit for what you paid in Italy. You would only pay the difference if there is any.
Is the 7 % tax only on income earned of foreign assets. For example if have 1 million dollars in savings and property which earns for example 50,000 per annum. Is the capital taxable along with the income earned? Thanks for your help
The 7% is only on taxable income. Interest, dividends, capital gains, ordinary income, etc. Normally Italy also has a wealth tax on foreign real estate and financial assets. But in the 7% tax regime that is avoided.
How about me I want to live in Abruzzo Im an Australian Citizen but I was born in Firenze I will receive an Australian pension would I be up for the 7% tax
@@traveltirement I heard while Italy is trying to attract investors and businesses, we all know the mafia doesn’t miss out either. Especially in the vacant small towns where these cheap properties are.
I've not heard a single story about the mafia from any expat in Italy. Not saying they aren't still there, but I think your perception of it is not accurate. If you have some statistics or data on it, I'd love to see.
@@traveltirement I’ve heard from a few xpats that when you set up a business or renovate a property the mafia (primarily in the south) will find out. Nobody will share how much they “take” for safety and I’m sure there is no set rate. LOL.
Well, here is a hint: Anyone with SOME money can move to Italy and not care about the regulations. Separate yourself - before moving - from your money, dump the assets into a controlled trust, then pay out through a third party as a long term retirement style payment. Done. No wealth tax for anything that does not show up. And trusts and the beneficiaries are legally separate.
@@traveltirement Not really. Lots of people I know do that for larger properties etc. - and the difference between 40% and 0% tax gives you a lot of money for those costs.
Some for sure. But Italy is so low-cost you can make less (after taxes) and still have a great lifestyle. Most younger folks move for work. To the north of Italy where most jobs are, or other parts of Europe that are part of the EU. Thanks for watching!
@@roundtwo3321 Yes, like the U.S., Italy taxes on worldwide income. Of course, only if you're a tax resident. If also a U.S. citizen, you'd get a tax credit for income taxes paid in Italy when you file in the U.S.
@@traveltirement Clearly, I'm in the wrong business. I need to start my own nation and convince people to move here. Sadly, I don't cook or possess any natural wonders.😄
" Get rid " of the ORIGINAL rare color 1960s bathrm fixtures that decorators would pay a TIDY SUM for ? Hell sell 'em to ME ! I'm moving to Italy so I'd HAVE a place to put them . Anything to save them frm being smashed and trashed !!!
One of the biggest issue right now is getting the Elective Residency, some consulates in the US are easy some are a pain (Los Angles) that takes the most time and is a lot of paper work.
I have heard this from many people. France outsources their US visa processing and it's very efficient (from what I've heard). I wish Italy would do the same...
Thank you Tommy. I have decided to take my SS next year early so although I bought land in Portugal I am going to apply for Italian Citizenship in a town of less than 20 thousand. Thanx so much for the reminder. I was not going to be a pensioner for 5 more years but decided it would be advantageous for my Europe move to take it early and qualify for this tax discount for 10 years. Cheers. Gina in Upstate NY moving to Europe
Just remember to make sure you meet all the requirements!
If so, it’s an amazing benefit. And you’re helping Italian communities that need an influx of people and money.
Let me know how it goes!
So much of a benefit. Than Tommy for the reminder...hugs will keep you posted@@traveltirement
Thanks once again for the great tax information❤
Enjoyed this Video thanking you cheers 🇦🇺 😊
You should check with an accountant. I believe you must prove residency with the local police. The idea of the 7% flat rate is to have people living in these towns supporting the local economy. The Italian government has an army of revenuers.
I appreciate all of the tax information you continually provide us Tommy. It’s all quite necessary when planning the future. Thank you very much!
My pleasure!
This was quite informative. All 3 properties were interesting, but of course property #3 was my favorite by far.
It is pretty spectacular!
Mico knows his stuff. Very knowledgeable guy, thanks 👍🏻
He's taught me a lot. He went to college in the US, so he also understands a lot of American details.
@@traveltirement yep, I was surprised with the knowledge he had of the US.
Thanks for all the info. Really handy when one starts planning their move.
Glad it was helpful!
@@traveltirement have you ever thought of putting up a business of helping people especially from the US (since you're from the US) move to Italy or France? Especially now that Portugal has scrapped their 10% NHR tax. Partnering with a solid realtor, a renovation/construction company and tax guy would be awesome.
@@seinfeldcostanza9433 Working on some options as we speak!
Great video.
There seems to be varying opinions as to what qualifies as a foreign pension.
Some accountants are saying that any overseas capital holdings, capital gains or passive income from private saving accounts would qualify as a foreign pension.
However, the accountant in your video is claiming that only an official pension qualifies.
It would be good for your accountant to clarify that definition of foreign pension income more if possible.
A pension for the Italian tax authority is any tax-deferred account (401k, 403b, 457, IRA, SEP, Roth, etc) or an actual pension.
If you have that, then all your other income gets thrown in for the 7% tax treatment.
That’s my understanding.
Thank you to you both for one of the best and clearest explanations of the 7% tax program. One question: How long are you required to reside in the particular municipality in order to get the 7% tax rate? Is it 183 days? For example, say you reside 6 months in a southern area, and have a second home in the north (non-7% area), and stay there for a lesser amount of time, does that work?
Yes I think that would work. As long as the house in the south was your primary residence.
They take more into account than just 183 days.
Excellent information thanks to Nicolo ❤
Our pleasure! He is super knowledgable.
Love your vids. Thanks!
Thanks so much!
Very useful info! Thank you!
Glad it was helpful!
Like the colored bathroom ceramics. Would not make a change.
That’s great. It would save you money.
Me too, I would go crazy with colors and wall art.
Thank you for your time and effort. This vidio was perfect . And thanks to your financial friend in Italy 🇮🇹. Both of you are handsome and polite. By the way. I loved the green bathroom fixtures I would redo the floor tiles to match with the walls and keep that bath funky green and yellow. I would then paint 🎨 some lemons and bright art work to go with the style😊.
Thank you! 😃
Growing up in the 70’s I’ve just seen too much of that green!
But it’s really not that bad.
Finally a REAL video that explains the tax scheme....
Thanks so much for watching!
Great video Tommy.
Would a Roth IRA or traditional IRA work instead of Social Security?
For most people it’s far smarter to wait until age 70 to start taking Social Security. Would withdrawals from an IRA of either type work under this scenario?
Also, I just wanted to double check to make sure I heard correctly. In the 7% zones, they are not going to wealth tax you on any real estate, homes, or other other financial accounts in the United States?
Yes, a Roth or Traditional works as a “pension”.
Roth gains are also taxed at 7%.
You are correct your houses and assets around the world are not liable for wealth tax.
Only income.
@@traveltirement thanks for the response, Tommy.
For those who don’t completely understand, I think it’s accurate that you would be taxed for these things outside the 7% zones. And the income tax, in those non-7% zones, if I recall, starts at around 25% from dollar one. If I’m wrong, let me know. And then it goes up pretty quickly after that.
And in these non-7% zones, you would be hit with a wealth tax.
If you own a home in the United States, you would get tagged for that, but apparently the property tax is a set off so it is kind of a wash.
But for IRAs and brokerage accounts, you would get hit for the wealth tax. In those
non 7% zones.
Again, this is something that people have to be sure about and if I have this wrong, please let me know.
@@traveltirement sorry to bug you. I assume they wouldn’t hit you on the gains from your IRAs or brokerage accounts. Only on the withdrawals. Is that correct?
@@stevenbrady440 Yes, These are small "little details" not too many people (who do these type of videos) mention while they tell people how great it is to move to Italy. BTW, THIS was an excellent video to help with this type information! I'd like to see this video as a standalone video and not co-mingled with the properties however.
The wealth tax has really made me reconsider Italy as my new place (unless of course I would get into the 7% tax regime but I'm just not sure I want to live in a small(er) comune to qualify for it). As I understand, Spain and France also have wealth taxes but ONLY if you are above a threshold of several hundred thousand Euros. Not an expert, but this is my understanding as I delve into these details.
Many people comment on these type of videos that they will just rent their house in the US but don't think (or they don't know) that just by owning it, you owe the wealth tax on it (IF you are not part of the 7% regime). Yes, when they sell it, no capital gains for Italian tax purposes but it's kind of a "pay as you go" thing. Same with stock sales (i.e. capital gains). Of course I truly think some (many?) people just don't claim it on the taxes (and how would Italy be aware that they own it? ) Some day the data sharing between countries will probably exist to prevent this but I don't think it does now. Of course, if you get caught the fines are quite steep.
I wouldn't necessarily say that the property tax is 'a wash' as it really depends on how much the property is worth (I believe the wealth tax is based on this, the property value ...how do you value a US property for Italian tax purposes is my question? We don't have 'Cadastral' values in the US like in EU) and how much the US property taxes are. True, that the US property tax you pay can be deducted from you Italian taxes.
I'm no expert...this is just what I have pieced together from videos like this. One should definitely consult and expert BEFORE making a decision. I just shake my head at all the comments in these type of videos when I read "we are moving in 3 months!" Yea! You probably have no idea about these 'small details' that await you.
@@traveltirement Best to take advise from EU perspective, as it may well effect. The True Born Citizen Act requires a person born in EU with both parents born in EU to live and work, Bio Data of person and both parents on Passport, Identity Documents, automated passport control, the EU will be free of Non EU persons from the Mediterranean to the North Sea.
Thanks for the great video, very informative! Any chance you'd share your Excel spreadsheet?
Working on it. It will be part of a low-cost resource with answers to common questions and helpful videos.
Great video on the basics of the program and good choices on the properties to show the nice range that is available. Do apartments in Italy have the equivalent of monthly condo fees. If they do not how is that handled? I am hoping to spend a month in Italy in the fall, during the rainier season to get a feel on how it is to live there outside of the tourist season. I am still trying to decide on a small town to live in for that month.
Harry, yes there are some apartments with condo fees. But most of the ones in this video have none.
I’m excited for your visit!
Thanks for watching.
As an American, I have an interest in purchasing a small residence in Molise or Abruzzo. My budget is 40,000 Euro... so 25,000 to 30,000 Euro for the property and the remainder in renovations. What is the approximate property tax for such a residence? Are there annual inspections? If I lived there continuously only 2-3 months per year, then would a B and B rental for the remaining months be permitted?
No property tax if it's your primary residence. If a rental, probably a few hundred euros per year.
No annual inspections that I know of.
Yes, you can Airbnb your place when not there. If you don't rent it over 30 days per tenant, you don't have to register as a business.
But you do have to pay tax on any income that you make with it. And that income is not eligible for the 7% treatment.
@@traveltirement It may be 9% it was on Villa in Pescara.
Excellent information, thank you !!! That 185 k apartment was awesome. Is the apartment on top available also ? Don't like peeps on top.....
I don't know that. I'm sure that's a nice spot too. But that giant patio is 🤩
Very helpful information. Would a V.A. Veteran disability pension be taxable?
21:30 helpful to know.
Looking at this option if I go with getting German citizenship based off my mother. Great properties. Number 3 looked incredible with the exposed stone. Though I would rather look at properties below the 60k€.
Really enjoy your content thanks for sharing. 👍📺
I asked this if the accountant. Still haven’t heard yet.
Awesome video as always! I have a quick question. Did Nicolò Bolla say that if I have a government pension it is not taxed if I do not become a citizen. So that would mean if I retired as a state employee, I would not be taxed on my pension. Does that apply to the entire country, or just the 7% tax regime regions. Thank you so much for all your information. I really enjoy all your videos.
Pretty sure it’s for the entire country.
FYI it’s not taxed in Italy, but is still taxable in the US.
Thanks for watching!
So here's a question. What if we receive medical disability from the US military? This is not a retirement pension, but money received due to military service. How would that work?
If it’s a replacement for income it will be taxable I believe.
If it’s reparations for an accident it’s not taxable.
Hi tommy . Thank you very much .
My pleasure!
I’m an American. I’m a retired New York City Transit Authority worker. I also get Social Security Benefits. I have an excellent Credit Score. I can put 10% down on the house. Can you get a mortgage on a house in Italy? I love small towns, so living in one wouldn’t be a problem for us. I have property in Arizona. Where can I get more information? Thank you for sharing.
Unfortunately, mortgages are quite difficult to get for foreigners. They don't use credit scores in Italy.
If you must have a mortgage to buy, I'd recommend you rent for a year in Italy to establish yourself. That will make it much easier.
Or, of course, save up the money to buy in cash.
Thx. Now the day I retire I will travel quite a bit to all my relatives that lives all around the world and to places I want to visit. Is there a rule how long time I must stay in my new apartment?
One last question is it cumbersome to obtain the 7% tax and will it take a long time.
Thx.
To be a tax resident of Italy you’re supposed to live there at least 183 days. But that’s not the only thing they look at.
The 7% tax benefit doesn’t take any time.
You first have to apply for a visa to stay in Italy long-term.
Then your first tax season, you just elect the 7% tax treatment. Of course you have to provide documentation.
@@traveltirement thx. 183 days. Hmm that could be a problem. Guess I need to contact a layer or tax consultant in Italy how deal with that. Thx for a great channel
Yes #3 I love
Pretty spectacular!
Great video! Very informative. At one point Mr. Bolla says that the 7% does not apply to government pensions but later in the video he says it does apply to pensions. Maybe he meant private pensions? Also here in the US if we sell our primary residence, there is no tax on the capital gains (if any). Would the 7% tax in italy apply to capital gains when selling a house in the US if I became a tax resident of Italy during that year?
There’s no tax in Italy when selling a primary residence either.
So it depends on if your US house was still your primary.
@@traveltirement Thank you!
I've read several times if you can prove your grandparents or great grandparents were "born" in Italy you get automatic citizenship. Does anyone
know about this? Stories like this are too good be true. Thanks!
It's a real thing. It's called Jure Sanguinis or "right of blood".
Here's everything you need to know:
italiancitizenshipassistance.com/jure-sanguinis/
@@traveltirement I'll never be able to thank you enough for providing the link. You've saved me months of work. I'll contact you prior to my arrival.
@@MDiStefano10 LOL...this entire process took me over 3 years...and I felt lucky it was that fast. Buona Fortuna (in boca al lupo) 🤣
Great video, thanks. Did you intend to have a link to your google spreadsheet as well? That istatdata gets cumbersome
Yes. I’m going to release that with a bunch of other resources.
I’m building it out now. Probably in the next month I’ll make it available.
@@traveltirement Thanks!
Great tax information. I biked through Grammichele a few years ago. It is an interesting drive-by, but i would not want to live there. The hexagonal street plan is quite unique and this history interesting, but it is pretty RAW: lots of graffiti and not a picturesque hill town. Much nicer towns nearby.
Thanks for this added info.
I’ve not been, but it looked so unique I had to share!
Thanks for watching.
QUESTION:
How much of an annual income do you need? And, can you make up any difference with a lump sum cash deposit to qualify for the 7%?
The visa you would apply for is the Elective Residency Visa. The minimum income is €31/32k (I've seen both) for a single person and €38k per year for a couple.
Just know that each Italian consulate in the US has discretion with this number.
And, no, you cannot show money in a bank account to meet this requirement. You must have at least one "pension". (could be an IRA, Roth, 401, etc. or Social Security).
Just a note: those ruins are Greek, not Romans. It's the temple of Paestum.
Ah, thank you for correcting me!
I'm in Houston and my tax on SSA is a whopping "0%". However, the State income tax is "0%". So if someone came from Texas, they would have to start paying on SSA that you once didn't have to. So what is the benefit of living in Italy over Texas? Texas has high property taxes, school taxes, and mud taxes. In other words, you are paying taxes even though your taxes are not on your SSA or State.
Those moving out of California have been moving into Texas. They show up, put $300,000 on the table, and still have another $300,000 from the money they got from selling their home back in CA. This has been driving up the cost of homes in many states including Texas. Cheap homes in Italy may not mean affordable living in Italy. After the 10-year 7% is up, you will have to pay close to 45% tax on your SSA. That would be a showstopper for most people. However, you also have to look at the benefits of the Italian medical system and the price of private medical insurance. Medicare costs are on average around $400 per month. That does not cover all costs, which means that subsidy insurance will cost $300 per month, you are stuck paying whatever Medicare doesn't cover, or just go without being treated because it's too expensive.
Medical treatment in the States is threw the roof. Dental work is a fraction of the cost overseas as compared to overseas. My 80-year-old father flew to the UAE for new teeth and it cost him about $3,000. He was quoted $90,000 in the states. I wonder what it would have cost in Italy? I should also point out that medical care quality in the States has dropped over the years. I cannot have the same doctors anymore. The ones they assign to me a quacks at best. I recently broke my leg and it cost me $7,000 for an x-ray, emergency room visit, cast, and crutches. No pain medication because of the federal government crackdown. I took tramadol which does next to nothing. A few weeks later I had another x-ray and I learned that they didn't set the bone right. I still haven't gone back on that one. It doesn't hurt and I'm walking fairly well for someone 60. So all I can do is wonder what the next medical shoe is going to fall in my life.
So Italy might have higher income taxes but is that offset by prices in the States? From what I remember, Italy has an affordable and professional medical care system. It could be that the taxes might be higher in Italy but in the end, you might end up with less out of pocket when considering all aspects. This would make the 7% zones appealing but regular taxes put one at about the same as living in Texas. Obviously, other States like Georgia have a state income tax as well, which increases overall out-of-pocket taxes paid per year.
I'm just trying to justify why it would be more beneficial to live in Italy over staying in the United States. Obviously, prices for real estate are very affordable but what about the the rest? Does it make financial sense to move there or not? Even if you are a multimillionaire, you wouldn't want to be paying 45% of your wealth to Italy. However, those with lower incomes might find it more affordable when one looks at the whole cost of living considerations.
It’s 100% about if you have a dream of living in Italy.
Some things are different there.
If you don’t like the idea of those things (like taxes) being different, you don’t have to live there.
Just that simple!
Correct me if I'm wrong but isn't it impossible to get a home mortgage in Italy as an American coming from the States under €100,000 Euros? I believe you have to come up with half the money as well. So a €50,000 mortgage would require you to put down around $64,500. You also have to present 2 years of tax records as well. If you are on Social Security, I'm not sure how that would work as those who don't make over their SSA, don't need to file taxes.
My mortgage expert says they have a €100k minimum loan amount. Maybe other companies will do smaller loans.
I know in Italy and France the minimums have gone up the last couple of years.
Small loans just aren’t worth it for the lenders.
@@traveltirement Thank you for the information. I was really wanting to work into a mortgage but unable to come up with the minimum $58,000 U.S. Dollars. I will have to come up with a different plan. I don’t mind finding some place in one of these 7% areas to fix up as I go along. The trick would be to have it somewhat livable so I’m not having to rent an apartment. My research into moving to Italy would be a dream come true. My Italian residency visa has expired and I probably would need to start the process all over again. My problem is that SSA only pays out $2,200 per month. It might be just as the minimum amount to qualify for the visa. I will have to go down to the Italian consulate here in Houston. Thanks for the information and your video. They are fun to watch.
Could you please list some properties in areas that aren't in high earthquake prone zones? Most of Sicily falls in Zone 4, which according to what I've been told is a dangerous Zone for earthquakes. I also have another question, I was told that it's extremely difficult for Expats to obtain a mortgage in Italy, I was told that Italian banks make it pretty much impossible for someone from a non EU Country to obtain a mortgage under 200,000€. Is that accurate? How can someone on Social Security, moving to Europe because of the lower cost of living, come up with $50, $70 or $100K cash for a home if Italian banks won't finance the homes? Can you please clear this up for me? I would love to move to Italy. Please clear this up for me. Thank you!
Earthquakes should not be a worry.
Since 1990 (34 yrs) just over 700 people have died in Italy from earthquakes.
Just in 2022, over 3,100 died in Italy from car accidents.
I’ll take the earthquakes.
Yes, mortgages are difficult to get. There are no credit scores.
To get a mortgage, rent in Italy for a year or two to establish yourself.
I hope that helps!
It would also make sense to make the 7% tax rate avaliable all over Italy as long as the city or town is less than 20,000 people
The goal of the legislation is to revive the southern part of Italy where they have lost a lot of population.
The north is where folks have migrated, so they don’t want to encourage more.
I think your link for the 3rd home is incorrect. Links to a 400k euro home
Thanks for letting me know. I’ll get it updated!
How do I get more information on the third property. I’m interested in purchasing
The property listing link is below the video.
I’m not the agent on these properties.
Thanks for watching!
Do you happen to know how Italy handles the taxation Roth IRA investments. In the US, Roth IRAs are tax free accounts, so cap gains, dividends, and distributions are not taxed. Does Italy respect that tax status, or does it treat this as any other investment account, and tax cap gains and dividend income? Appreciate the content, thanks.
All Roth gains are taxes at ordinary income rates unless you elect for the 7% flat tax. Then only 7%.
No tax on contributions.
Thanks for the question!
@@traveltirement That's disappointing but appreciate the info. Thanks again!
I've heard Canadians cannot take advantage of this tax deal, due to current policies of the Canadian government. Do you know if this is true?
I’m not sure. Sorry.
The biggest problem for living in Italy is the huge taxes.
The rates are high (except the 7% flat tax areas) but the cost of living is low.
So after taxes you may still have more “lifestyle” than in the U.S.
I don't have any pension. I'm a Canadian early retiree living off passive income from my investments. I guess I wouldn't quality. Correct?
Thanks for making these informative videos. I am an new subscriber.
Possibly. If you can show a consistent "passive income" from them.
Like if you live off just the dividends, that you can probably convince them of.
Just know that each consulate in Canada (where you apply for a visa) has a lot of discretion over what they approve.
It's not just a check-the-box process.
@@traveltirement Oh. Ok. Great! It's nice to know. I travelled to Rome, Florence, Cinque Terre, Naples and the Amalfi Coast back in 2022 for 2 weeks and I was enchanted with the country. I have been thinking about slow travelling again and possibly moving to Italy making it my base for other travels across Europe. Setting up residency in Italy would be a great way to accomplish that without having to do the Schengen shuffle every 90 days.
Thanks! Please keep making these videos. It's like I am mind-travelling to Italy everytime I watch your videos.
I appreciate the comment. I'm just learning and sharing as I go!
What parts of Umbria? I'm trying to find property that's a fairy quick or inexpensive commute to Genoa where I plan to study voice with a teacher there unless you know of voice teachers for opera in the various provinces that qualify for the 7%
Only specific towns in Umbria.
They are listed in an addendum to the 2017 legislation as well as towns in Lazio and Marche.
Thanks for watching!
Thanks so much for the great video! I've signed up on your website.
Optimistically, if I get the 7% flat for 10 years, then become an Italian citizen at age say 70, would it then make sense to relocate to Portugal for the lower tax rates?
Only if lower tax rates were your goal.
I would never move somewhere just for a tax rate.
@traveltirement Agree, but once I have my Italian citizenship, I can stay in Italy some of the year, sell my US home, and take that money and buy a different place in another great location like Portugal. Then I could spend time in each and still benefit from the lower taxes.
@@schowtyme That sounds like a great plan!
Tax on overseas rental? Taxed in uk and then gross in Italy at 7%
Where’s the incentive?
I don't know the tax treaty between the UK and Italy, but in the US, you'd get a tax credit for the 7% you paid in Italy on your US return.
The incentive is you live in Italy for probably 50% of the cost of living in the UK. And live the Italian lifestyle, food, friendly people, and amazing history.
And you'd pay 7% in Italy vs 23%+ which is their first tax bracket for progressive taxes.
Thanks for watching!
How about Army veterans that serve in the usa
Your military pension would only be taxable in the USA. Any other income, it would depend on the type of income it is.
So you have to pay American tax and then an additional 7% tax in Italy?
Not exactly. You pay tax in Italy, then when you file in the US, you get a tax credit for what you paid in Italy.
You would only pay the difference if there is any.
Is the 7 % tax only on income earned of foreign assets. For example if have 1 million dollars in savings and property which earns for example 50,000 per annum. Is the capital taxable along with the income earned? Thanks for your help
The 7% is only on taxable income. Interest, dividends, capital gains, ordinary income, etc.
Normally Italy also has a wealth tax on foreign real estate and financial assets.
But in the 7% tax regime that is avoided.
@@traveltirement great
Sorry but the link for the Italy population database seems wrong, could you please repost the correct link thanks
Looks like they've changed it or are doing an upgrade.
Maybe try back in a few days!
How about me I want to live in Abruzzo Im an Australian Citizen but I was born in Firenze I will receive an Australian pension would I be up for the 7% tax
The pension or passive income must be foreign sourced. Not from Italy.
That’s my understanding.
So yes that should work.
Can you collect ss if you live out of the US?
Yes you can. You can have your SS sent directly to a foreign bank or to a US bank, then transferred to a foreign bank.
So, how do I get to stay permanently in Italy with USA passport?
The most common Visa is the Elective Residency Visa.
It lets you stay a year and is renewable each year.
Is your Italian accountant related to Bud Spencer???
I just looked him up and they do look similar!
what is the nearest place in Italy that is walking distance to Vatican?
By "place" do you mean property?
I don't research anything in Rome. Sorry.
@@traveltirement how about a property near Rome?
I don’t do any searches in Rome. But you can search on Gate-away.com.
Why don’t you share what the mafia charges.
I don’t understand?!?
@@traveltirement I heard while Italy is trying to attract investors and businesses, we all know the mafia doesn’t miss out either. Especially in the vacant small towns where these cheap properties are.
I've not heard a single story about the mafia from any expat in Italy. Not saying they aren't still there, but I think your perception of it is not accurate.
If you have some statistics or data on it, I'd love to see.
@@traveltirement I’ve heard from a few xpats that when you set up a business or renovate a property the mafia (primarily in the south) will find out. Nobody will share how much they “take” for safety and I’m sure there is no set rate. LOL.
Well, here is a hint: Anyone with SOME money can move to Italy and not care about the regulations. Separate yourself - before moving - from your money, dump the assets into a controlled trust, then pay out through a third party as a long term retirement style payment.
Done. No wealth tax for anything that does not show up. And trusts and the beneficiaries are legally separate.
Would probably cost more to set up all the trusts than the tax you would pay.
But you can do what you want.
@@traveltirement Not really. Lots of people I know do that for larger properties etc. - and the difference between 40% and 0% tax gives you a lot of money for those costs.
Taxes are probably why the Italians left Italy.
Some for sure. But Italy is so low-cost you can make less (after taxes) and still have a great lifestyle.
Most younger folks move for work. To the north of Italy where most jobs are, or other parts of Europe that are part of the EU.
Thanks for watching!
@@traveltirement Am I understanding correctly that Italy takes income tax on income not earned in Italy?
@@roundtwo3321 Yes, like the U.S., Italy taxes on worldwide income.
Of course, only if you're a tax resident.
If also a U.S. citizen, you'd get a tax credit for income taxes paid in Italy when you file in the U.S.
@@traveltirement Clearly, I'm in the wrong business. I need to start my own nation and convince people to move here. Sadly, I don't cook or possess any natural wonders.😄
@@roundtwo3321 Don't sell yourself short! 😁
Thanks Tommy - excellent summary - appreciate the way you add value through your channel.
Appreciate that. Thanks for watching!
" Get rid " of the ORIGINAL rare color 1960s bathrm fixtures that decorators would pay a TIDY SUM for ? Hell sell 'em to ME ! I'm moving to Italy so I'd HAVE a place to put them . Anything to save them frm being smashed and trashed !!!
I could donate them to the local comune, so they wouldn't go to waste!
@@traveltirement - As long as they too realize they have serious value this would b a GREAT idea !
So you don't like avocado...lol
Delicious to eat, not for bathroom fixtures! 😂
Excellent video! Thank you.
I appreciate that! Thanks for watching.
One of the biggest issue right now is getting the Elective Residency, some consulates in the US are easy some are a pain (Los Angles) that takes the most time and is a lot of paper work.
I have heard this from many people. France outsources their US visa processing and it's very efficient (from what I've heard).
I wish Italy would do the same...