Thank you for this tutorial and for demonstrating the correct website. If you click on the Italian flag you can view it in English. Interestingly, "tutti i comuni per stato civile" translates to "all municipalities by marital status". I would never have figured out that this is the info needed. I am still a bit challenged finding the locations. The map is a great tool. Thank you again for this info.
Any recommendations on Italian language schools ? I was thinking studying Italian in different areas may give a better feel for a place then just traveling through.. also would give a base to work from, to explore areas around Italy ..
Sorry, I don't have any. But that's a good idea to put together. I've mostly used Coffee Break Languages and I know StoryLearning has good language courses online.
Excellent information, thank you. I do find myself getting confused by the concept of the Municiality versus the Communi and how that effects qualification. I'll give a specific example - I am interested in the greater Bari area in Puglia. In the data I pulled, the Bari metropolitan area has a population of 1.22 million and Bari has a population of 316K. Capurso and Valenzano have populations of 11.3K and 17.2K, respectively, and both are listed as towns and communes of the Metropolitan City of Bari. Each are listed as municipalities in the database. Since they are part of the Bari metropolitan city, do they not qualify as eligible villages / towns for the 7pct tax despite being below 20K? The greater Metropolitan City of Bari covers about 40 villages, cities and towns so if they do not qualify, it appears that one would have to live pretty far out of the city to find a qualifying village or town. Thanks for the help!
Bari is the name of the province, as well as the city itself. As long as the commune is below 20k, you should qualify. Even if it's in the province of Bari. I hope that helps!
Ask yourself 2 questions: 1. What is going to happen after the 10 years of 7% taxes ends? Then, you will be subject to Italy's regular rates, as much as 45% on income of, say, 100K. That's not how you plan "retirement." You'll be forced to NOT become a tax resident, which means you cannot stay there more than either 180 days or 90 days. You cannot live there full-time after that. 2. What happens if Italy decides, in the future, to end the program? Well, you'll still be in the 7% bracket for the remainder of your 10 years. BUT after that, nobody will want to move to Italy for the tax break, which means the house you bought to "retire and live the good life" will be worth MUCH LESS because there will be no buyers. And you'll still need to not become a tax resident, which means you cannot live there full time anymore. The sad but plain fact is that the EU does NOT want any member state to become a tax haven. So, it will end if the EU has its way, and that is more likely than not.
Bouno lavorro il mio fratello! I’m going to Italy (again) in spring 2024 to scout for a retirement home. It’s risky to gamble my savings on any health issue and brutal cost of health care in the US
@@traveltirement the map function operates as you said but it won’t zoom in on Sardinia. Is it to be assumed that all of Sardinia qualifies for the 7% flat tax? I am looking in the Cagliari area and that city is way over the threshold. Thanks for all you do!
Can we import our household goods and car from France to Italy? What about health care in towns less than 20 000? Is health care included under the 7% scheme? What is the cost to buy a property? What is the property taxes and insurance costs if we paid cash?
Yes you should be able to ship your stuff. Or drive it there. You can have a car in Italy as long as you're a tax-resident. Healthcare in Italy is separate from the tax regime. Same options apply as any resident. As a non-resident buyer, you'll pay 9% on the cadastral value of a house. If becoming a resident in 18 mo, you'll pay 2%. Plus fees for notary. No property tax if it's your primary residence. Maybe 0.75-1.5% if not. Depends on the region, type and size of house. I don't know about insurance costs at the moment. Thanks for watching!
Very helpful! Thank you! Maybe this isn't the right video to ask this question but if I do qualify for the 7% tax rate, can I deduct that tax paid to Italy on my US tax return as a foreign tax credit? I have seen both yes and no answers to that question.
@@traveltirement OK, here's what I have found out. First I tried asking the IRS but, not surprisingly, that was a waste of time. You cannot talk with an actual person anymore and can't even schedule an appointment at an IRS office. I then tried contacting H&R Block but no dice. However, two accounting firms (Cerity Partners in the US and Accounting Bolla in Italy) both say that the 7% flat tax paid in Italy is deductible on your US tax return. In other words, an American living in Italy as a tax resident and qualifying for the 7% flat tax would not see an overall increase in income taxes. I hope this info is helpful.
Rose, I sent you an email regarding this. For anyone reading this comment, here's some info: • U.S. citizens are taxed on worldwide income, not matter where you live • Italy and the U.S. have a tax treaty to eliminate double-taxation • Income taxes paid to Italy will be credited on your U.S. return • Cost of living in Italy is low (50% less?) so you need less income • Less income means less to tax, either in Italy or the U.S. I'm not a CPA or tax professional, so don't take this as tax advice!
There is a USA-Italy tax treaty to avoid double taxation. You may get a tax credit in the USA because you will pay more in Italy than USA, but you can use that to do a Roth conversion.
@@SEnricoPIndiogine Be careful with Roth conversions, because Italy taxes Roth gains. So they become more like a post-tax IRA. Just run the numbers to make sure it makes sense.
@@traveltirement Yes, that is why I stopped doing Roth conversions. The only reason to still do a Roth conversion is if one has foreign tax credit higher than the tax liability in the USA. Then you may as well use it to do a Roth conversion, otherwise it would be a lost credit.
Great video, as usual. I tried the statistics link but it takes me to the old red and gray website, what am I doing wrong (why do they still have the old one up?)
thanks for this viseo, I am from the UK and work online building website for UK customers, as I am not retired would I be able to get this 7% flat tax or the fact that I work online stop me from getting it? please let me know if you can? many thanks
One requirement for the 7% flat tax is a foreign "pension". But that could include a UK retirement account if you are of the age to receive distribution. Or, of course, an actual pension, public or private.
That is possible. Mind you that you need a real house in the below 20,000 comune. I was thinking about a country house in the 7% area and a second house in a above 20,000 comune. You are allowed to have more than 1 house, but keep your official residence inthe below 20,000 comune. You cannot rent it or leave it empty. I has to be a "real" residence. However, no one forces you to live there the whole year.
You’d file and pay a normal return in the US. Standard deduction, ordinary income rates, etc. But you’d get a tax credit for the tax you paid in Italy. And with the lower cost of living, you’ll be pulling less from retirement accounts. US taxes by citizenship not residency, so no way to get around Uncle Sam.
You would be grandfathered in and keep your tax break for the duration. Just know if you move to a town under 20k to get the flat tax, then you move to one that's larger, you will lose the benefit.
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Wow! This is a fabulous tool, thank you for sharing. From Penticton, British Columbia, Canada.
Thanks for watching!
From Canada (Québec), Good job ! Very useful info.
Thanks for watching!
Good work in locating and sharing this potentially useful information. Thanks
You’re welcome!
Thank you for this tutorial and for demonstrating the correct website. If you click on the Italian flag you can view it in English. Interestingly, "tutti i comuni per stato civile" translates to "all municipalities by marital status". I would never have figured out that this is the info needed. I am still a bit challenged finding the locations. The map is a great tool. Thank you again for this info.
Thanks for watching 🤩
Thank you for the video!
My pleasure!
Exactly the info I was looking for. Thanks from Ontario Canada.
Glad it was helpful!
Man that was helpful thank you you win a sub 👍🏻
Thanks for the sub! Just learning and sharing...
Just about called you a big baby, you beat me to it and I had to chuckle. Good stuff.
Thanks for watching 😁
Just what I was looking for from BC Canada thank you
You're very welcome!
Great stuff. Grazie.
You’re welcome. Thanks for watching!
Great video!! Thank you!
Thanks for watching!
Any recommendations on Italian language schools ? I was thinking studying Italian in different areas may give a better feel for a place then just traveling through.. also would give a base to work from, to explore areas around Italy ..
Sorry, I don't have any. But that's a good idea to put together.
I've mostly used Coffee Break Languages and I know StoryLearning has good language courses online.
Excellent information, thank you. I do find myself getting confused by the concept of the Municiality versus the Communi and how that effects qualification. I'll give a specific example - I am interested in the greater Bari area in Puglia. In the data I pulled, the Bari metropolitan area has a population of 1.22 million and Bari has a population of 316K. Capurso and Valenzano have populations of 11.3K and 17.2K, respectively, and both are listed as towns and communes of the Metropolitan City of Bari. Each are listed as municipalities in the database. Since they are part of the Bari metropolitan city, do they not qualify as eligible villages / towns for the 7pct tax despite being below 20K? The greater Metropolitan City of Bari covers about 40 villages, cities and towns so if they do not qualify, it appears that one would have to live pretty far out of the city to find a qualifying village or town. Thanks for the help!
Bari is the name of the province, as well as the city itself.
As long as the commune is below 20k, you should qualify. Even if it's in the province of Bari.
I hope that helps!
You're becoming the Italian tax expert!
Just learning and sharing!
Thanks for watching 😎🙏
Thank you Sirl Very helpful. 👍
Glad it was helpful!
Ask yourself 2 questions:
1. What is going to happen after the 10 years of 7% taxes ends? Then, you will be subject to Italy's regular rates, as much as 45% on income of, say, 100K. That's not how you plan "retirement." You'll be forced to NOT become a tax resident, which means you cannot stay there more than either 180 days or 90 days. You cannot live there full-time after that.
2. What happens if Italy decides, in the future, to end the program? Well, you'll still be in the 7% bracket for the remainder of your 10 years. BUT after that, nobody will want to move to Italy for the tax break, which means the house you bought to "retire and live the good life" will be worth MUCH LESS because there will be no buyers. And you'll still need to not become a tax resident, which means you cannot live there full time anymore.
The sad but plain fact is that the EU does NOT want any member state to become a tax haven. So, it will end if the EU has its way, and that is more likely than not.
Thanks for watching.
You could always use the option to change it to English… a little easier to understand if your Italian isn’t so good
Thanks 🙏
Bouno lavorro il mio fratello! I’m going to Italy (again) in spring 2024 to scout for a retirement home. It’s risky to gamble my savings on any health issue and brutal cost of health care in the US
I hope you have a great trip. Thanks for watching!
@@traveltirement the map function operates as you said but it won’t zoom in on Sardinia. Is it to be assumed that all of Sardinia qualifies for the 7% flat tax? I am looking in the Cagliari area and that city is way over the threshold. Thanks for all you do!
All of Sardinia qualifies as long as the town (comune) is under 20k population.
Can we import our household goods and car from France to Italy?
What about health care in towns less than 20 000?
Is health care included under the 7% scheme?
What is the cost to buy a property?
What is the property taxes and insurance costs if we paid cash?
Yes you should be able to ship your stuff. Or drive it there.
You can have a car in Italy as long as you're a tax-resident.
Healthcare in Italy is separate from the tax regime. Same options apply as any resident.
As a non-resident buyer, you'll pay 9% on the cadastral value of a house. If becoming a resident in 18 mo, you'll pay 2%. Plus fees for notary.
No property tax if it's your primary residence. Maybe 0.75-1.5% if not. Depends on the region, type and size of house.
I don't know about insurance costs at the moment.
Thanks for watching!
Very helpful! Thank you! Maybe this isn't the right video to ask this question but if I do qualify for the 7% tax rate, can I deduct that tax paid to Italy on my US tax return as a foreign tax credit? I have seen both yes and no answers to that question.
My Italian accountant friend says yes. But he does mainly Italian taxes, not US taxes for expats.
That's my wishy-washy answer. 😁
@@traveltirement OK, here's what I have found out. First I tried asking the IRS but, not surprisingly, that was a waste of time. You cannot talk with an actual person anymore and can't even schedule an appointment at an IRS office. I then tried contacting H&R Block but no dice. However, two accounting firms (Cerity Partners in the US and Accounting Bolla in Italy) both say that the 7% flat tax paid in Italy is deductible on your US tax return. In other words, an American living in Italy as a tax resident and qualifying for the 7% flat tax would not see an overall increase in income taxes. I hope this info is helpful.
My son said the 7% tax does not really help Americans because we pay anywhere we live. could you extrapolate on this?
Rose, I sent you an email regarding this.
For anyone reading this comment, here's some info:
• U.S. citizens are taxed on worldwide income, not matter where you live
• Italy and the U.S. have a tax treaty to eliminate double-taxation
• Income taxes paid to Italy will be credited on your U.S. return
• Cost of living in Italy is low (50% less?) so you need less income
• Less income means less to tax, either in Italy or the U.S.
I'm not a CPA or tax professional, so don't take this as tax advice!
There is a USA-Italy tax treaty to avoid double taxation. You may get a tax credit in the USA because you will pay more in Italy than USA, but you can use that to do a Roth conversion.
@@SEnricoPIndiogine Be careful with Roth conversions, because Italy taxes Roth gains.
So they become more like a post-tax IRA.
Just run the numbers to make sure it makes sense.
@@traveltirement Yes, that is why I stopped doing Roth conversions. The only reason to still do a Roth conversion is if one has foreign tax credit higher than the tax liability in the USA. Then you may as well use it to do a Roth conversion, otherwise it would be a lost credit.
@@SEnricoPIndiogine Yes! Great thing to pay attention to.
10 years I hear. them up to 43% for my tax bracket
The taxes are progressive. So you wouldn’t actually pay 43%.
Thanks for watching 🙏
Great video, as usual. I tried the statistics link but it takes me to the old red and gray website, what am I doing wrong (why do they still have the old one up?)
I’m not sure?!?
@@traveltirement
OK, I’ll try some Google searches then.
Thank you
You have to try every google result to get the correct screen. Does the link get you directly there?
@@ecaponera22 This is what you should be using:
esploradati.istat.it/databrowser/#/it
thanks for this viseo, I am from the UK and work online building website for UK customers, as I am not retired would I be able to get this 7% flat tax or the fact that I work online stop me from getting it? please let me know if you can? many thanks
One requirement for the 7% flat tax is a foreign "pension". But that could include a UK retirement account if you are of the age to receive distribution.
Or, of course, an actual pension, public or private.
Thanks for coming back to me, I dont have any pension yet and its a few years away, at least I know now cheers @@traveltirement
What’s to stop someone from buying in a 7% tax area but living in another ?
You would no longer qualify if you move to a larger town.
How did they keep track of someone moving around yet having a residence in a 7% town
You pay tax at the tax office in the local commune.
That is possible. Mind you that you need a real house in the below 20,000 comune. I was thinking about a country house in the 7% area and a second house in a above 20,000 comune. You are allowed to have more than 1 house, but keep your official residence inthe below 20,000 comune. You cannot rent it or leave it empty. I has to be a "real" residence. However, no one forces you to live there the whole year.
Once you are setup for the 7% tax rate, what percent do you pay on 401k withdrawels in the US?
You’d file and pay a normal return in the US. Standard deduction, ordinary income rates, etc.
But you’d get a tax credit for the tax you paid in Italy.
And with the lower cost of living, you’ll be pulling less from retirement accounts.
US taxes by citizenship not residency, so no way to get around Uncle Sam.
@@traveltirement Thank you
What would happen to your 7% tax situation if you moved to a town that was barely under 20K but then the next year exceeded 20K?
You would be grandfathered in and keep your tax break for the duration.
Just know if you move to a town under 20k to get the flat tax, then you move to one that's larger, you will lose the benefit.
@@traveltirement Thanks! Enjoying the content.