Most people believe that the Italian 7% tax regime only applies to Southern Italy.

This is incorrect.

While Southern regions are included, the regime also applies to specific municipalities in Central Italy. These areas are often overlooked, yet they offer some of the most strategic relocation opportunities.

Understanding exactly which towns qualify for the Italy 7% tax regime is essential before making any move.

In this guide, we explain where you can live, which municipalities are eligible, and how to approach this decision strategically.

For a complete overview of the regime, read our full guide.

For practical scenarios and common questions, read our Q&A on the 7% special tax regime.

What Is the Italian 7% Tax Regime

The Italian 7% tax regime (Article 24-ter TUIR) allows eligible individuals to pay a substitute tax of 7% on all foreign-source income.

The regime applies for up to ten years and includes significant benefits such as exemption from wealth taxes on foreign assets and exemption from foreign asset reporting obligations.

To qualify, individuals must receive pension income from abroad, transfer their tax residence to Italy, not have been tax resident in Italy for at least five years, and move to an eligible municipality.

Which Towns Qualify for the Italy 7% Tax Regime

To benefit from the regime, you must move to a municipality that meets two conditions.

First, the municipality must have fewer than 20,000 inhabitants.

Second, it must be located in an eligible area defined by law.

Eligible areas include:

Southern Italy regions:
Sicily
Calabria
Sardinia
Campania
Basilicata
Abruzzo
Molise
Puglia

Central Italy earthquake municipalities:
Lazio
Marche
Umbria
Abruzzo (specific areas)

This second category is often ignored but is critical for strategic planning.

Official reference here.

Southern Italy Towns Eligible for the 7% Tax

Most content online focuses only on Southern Italy.

Any municipality under 20,000 inhabitants located in the regions listed above qualifies.

These areas are attractive for:

  • lower cost of living
  • coastal lifestyle
  • established expat communities

However, limiting your choice to Southern Italy may not always be optimal.

Central Italy Towns Eligible for the 7% Tax Regime

The Italian government extended the regime to municipalities affected by the 2016 earthquakes.

These towns are located in Central Italy and offer a very different lifestyle compared to Southern regions.

Examples include:

Lazio:
Amatrice
Accumoli

Umbria:
Norcia
Cascia
Preci

Marche:
Camerino
Visso
Ussita

These municipalities are often:

  • closer to Rome and major infrastructure
  • located in mountain or countryside settings
  • less crowded and more authentic

This makes them particularly attractive for retirees seeking both tax efficiency and quality of life.

Why Choosing the Right Municipality Is a Strategic Decision

Selecting the right town is not just a legal requirement.

It directly affects:

  • lifestyle
  • accessibility
  • property investment potential
  • long-term sustainability

Many individuals initially focus on well-known destinations such as Sicily or Puglia.

However, Central Italy may offer better connections, proximity to major cities, and more balanced living conditions.

In addition, real estate in earthquake-affected areas can present unique opportunities.

Common Mistakes When Choosing a Municipality

A frequent mistake is assuming that any small town qualifies.

This is incorrect. Population alone is not sufficient.

Another common error is relying on incomplete lists found online without verifying official eligibility.

Some individuals also focus only on tax benefits without considering infrastructure, healthcare, and daily life logistics.

Finally, failing to properly structure tax residence may jeopardize access to the regime.

How to Verify If a Municipality Is Eligible

Eligibility requires a two-step analysis.

The municipality must have fewer than 20,000 inhabitants.

It must also be located either in an eligible Southern region or within the list of earthquake-affected municipalities.

The official government resource provides guidance, but interpretation is not always straightforward and often requires professional assessment.

How We Help You Apply the 7% Tax Regime

At Move to Dolce Vita, we assist clients in identifying the right location and structuring their relocation properly.

This includes:

  • verifying eligible municipalities
  • coordinating tax and legal strategy
  • assisting with property acquisition
  • ensuring full compliance with Italian tax residency rules

We do not simply explain the regime.

We build a complete relocation strategy tailored to your income, assets, and lifestyle.

Contact us today for a personalised tax assessment.

Final Thoughts: More Options Than You Think

The Italian 7% tax regime is often misunderstood as limited to Southern Italy.

In reality, it offers a broader range of opportunities, including selected towns in Central Italy.

Understanding where the regime applies allows you to make better, more strategic decisions.

When structured correctly, the regime provides a unique combination of tax efficiency and quality of life.

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