The 7% Map

370 of Sardinia's 377 municipalities. The island's map of the 7% regime for foreign pensioners after the 30,000-resident threshold.

Of Sardinia's 377 municipalities, or comuni, 370 now qualify for the 7 per cent regime. I mean Article 24-ter of the Italian Income Tax Code (TUIR): if you receive a pension paid by a foreign payer and move your residence to a qualifying municipality in southern Italy, you pay 7 per cent on all the income that reaches you from abroad, for ten years [1].

Seven towns are out: Cagliari, Sassari, Quartu Sant'Elena, Olbia, Alghero, Nuoro and Oristano. The rest of the island is in [2].

The threshold changed on 7 April 2026. Article 26 of Law no. 34 of 11 March 2026 raised the ceiling from 20,000 to 30,000 residents for the eight regions of southern Italy, the Mezzogiorno [3]. In Sardinia the change has seven names: Selargius (28,377 residents), Assemini (25,630), Carbonia (25,623), Iglesias (24,653), Capoterra (23,092), Porto Torres (20,846) and Sestu (20,751). In March they were out; from April they are in [2]. Most of them sit in the ring around Cagliari or in the Sulcis: a quarter of an hour from the regional capital, at very different house prices.

Be careful which figure you look at. What counts is not today's population but the ISTAT figure, from the national statistics office, at 1 January of the year before the first year of the option. That number then stays fixed for the whole ten years, even if the municipality grows [4]. Move in 2026 and you are measured against the snapshot of 1 January 2025. Move in 2027 and it is 1 January 2026.

Oristano is the textbook case. On 1 January 2025 it had 30,067 residents: 67 above the threshold. Anyone moving there in 2026 stays out of the regime because of sixty-seven people. ISTAT's estimate for 1 January 2026 is 29,888; if the final figure confirms it, Oristano comes in for anyone arriving from 2027 [2]. It is the only one of the seven where the question is still open. Nuoro, at 33,054, has a longer road ahead; for the other five it does not arise.

In my office, though, the problem I see most often is not about population. It is about boundaries. A couple finds a house "in Cagliari", signs the purchase offer, and then learns from the land registry extract (the visura catastale) that the property lies in Monserrato, Selargius or Elmas. For them it is good news: all three qualify, Cagliari's airport is in Elmas and the university hospital is in Monserrato. The bad news is for those who bought across the line: same Poetto beach, same seafront, but the stretch that belongs to Quartu Sant'Elena, 68,237 residents, out of the regime with no way back. For Article 24-ter, the town you say you live in does not matter. What matters is the municipality in the land registry extract and in your registration with the municipal population register.

The requirements are few and you need all of them. You need a pension paid by a foreign payer, and no Italian tax residence in the five previous tax years. You also have to arrive from a State with a tax cooperation agreement in force with Italy [1]. The pension is the key that opens the door, not the only income that gets through. Once in, the 7 per cent covers every kind of income produced abroad: dividends, interest, rent from houses outside Italy, capital gains on foreign securities. With advance tax ruling no. 292 of 21 November 2025 the Agenzia delle Entrate (the Italian Revenue Agency) added what is left over from winding up foreign companies the pensioner owns, as investment income produced abroad [5]. Someone who closes their own companies in the year of the move finds the real advantage here, not in the pension. Italian-source income, including any INPS pension, stays under ordinary income tax, IRPEF.

With German clients the surprise is different. The Italy-Germany double taxation convention leaves social security pensions to the paying State: the Deutsche Rentenversicherung pension of someone living in Sardinia stays taxed in Germany; the Italian 7 per cent does not apply because Italy does not tax it at all [6]. The regime stays useful for the other foreign income, and for the exemption from foreign-asset reporting (the quadro RW) and from the IVIE and IVAFE wealth taxes on foreign assets [7]. For a British pensioner it is the other way round: the UK State Pension and private pensions are taxable only in the State of residence, so the 7 per cent covers them in full; only government service pensions stay with the United Kingdom [8].

The comparison with the regime under Article 24-bis of the TUIR takes one line. Since 1 January 2026 the lump-sum tax for new residents has risen to €300,000 a year, anywhere in Italy [9]. Three hundred thousand divided by 0.07 is 4,285,714: below that level of annual foreign income the 7 per cent costs less, and anyone above it is not reading this article. Take a foreign pension of €40,000 and €20,000 of foreign dividends: under the regime you pay €4,200 a year. Under ordinary taxation you would pay roughly €10,400 of IRPEF on the pension, €5,200 of tax at 26 per cent on the dividends, plus the regional and municipal surcharges: over €16,000, before any deductions.

Nobody grants you the regime; you apply it yourself. In the tax return for the first year you state the municipality you have moved to, the years of non-residence and the State of the body paying the pension [4]. If the municipality is wrong, nobody tells you at that point. It comes out later, when a check matches your registration with the municipal population register against the ISTAT figure for the previous year, and the Agenzia delle Entrate has until 31 December of the fifth year after the return was filed [10]. At that point the foreign income of every year concerned goes back to ordinary IRPEF, with penalties and interest.

Two grounds for forfeiture are worth keeping in mind before you choose where to live. The first is non-payment: if the substitute tax is not paid by the deadline for the balance, or only in part, the regime ends from that year, with a single window to put it right by the deadline for the following year's balance [11]. The second is geographical: moving your residence to a municipality that does not qualify, even just from Selargius to Quartu Sant'Elena, ends the regime. Moving to another qualifying municipality keeps it; the new municipality is measured on 1 January of the year before the move [4]. In both cases you cannot opt a second time [11].

The table of all 377 Sardinian municipalities, with the figure at 1 January 2025 and the estimate at 1 January 2026, is at the end of this article. Before you sign a purchase offer, read the "Comune" field in the land registry extract and look it up in the table, in the column for the year you intend to move.

Sources

[1] Article 24-ter, paragraphs 1 and 2, Presidential Decree no. 917 of 22 December 1986 (Italian Income Tax Code, TUIR), introduced by Article 1, paragraph 273, Law no. 145 of 30 December 2018 and amended by Article 5-bis, Decree-Law no. 34 of 30 April 2019.

[2] ISTAT, resident population by age and sex at 1 January 2025 and estimate at 1 January 2026, municipal data (demo.istat.it); our analysis of the 377 Sardinian municipalities.

[3] Article 26, paragraph 1, Law no. 34 of 11 March 2026 (annual SME law), Official Gazette of 23 March 2026, in force from 7 April 2026.

[4] Decision of the Director of the Agenzia delle Entrate of 31 May 2019, points 1.3, 1.4 and 1.6; Agenzia delle Entrate circular no. 21/E of 17 July 2020.

[5] Agenzia delle Entrate, advance tax ruling no. 292 of 21 November 2025.

[6] Italy-Germany double taxation convention of 18 October 1989, ratified by Law no. 459 of 24 November 1992, Article 19(4).

[7] Article 1, paragraph 274, Law no. 145 of 30 December 2018 (exemption from foreign-asset reporting and from IVIE and IVAFE for those who exercise the option).

[8] Italy-United Kingdom double taxation convention of 21 October 1988, ratified by Law no. 329 of 5 November 1990, Articles 18 and 19.

[9] Article 24-bis, paragraph 2, TUIR, as amended by Article 1, paragraphs 25 and 26, Law no. 199 of 30 December 2025.

[10] Article 43, paragraph 1, Presidential Decree no. 600 of 29 September 1973.

[11] Article 24-ter, paragraphs 4 to 7, TUIR (duration of the option, termination for non-payment, termination for moving to a non-qualifying municipality, bar on a new option).

Agostino Galizia, chartered accountant and statutory auditor in Cagliari, Sardinia. Ordine dei Dottori Commercialisti ed Esperti Contabili di Cagliari (Cagliari Institute of Chartered Accountants) no. 1330/A; Registro dei Revisori Legali (Italian register of statutory auditors) no. 80487. Galizia & Pinna Associati S.r.l. STP.

This article is for information only and does not replace an assessment of your specific case.