Italy's favourable tax regimes require years of prior non-residence. One Sardinian summer too many may already have used them up.
Five clean years: that is the entry price of the 7 per cent regime. Anyone who moves their residence to an eligible municipality in Southern Italy and wants their foreign income taxed at a substitute rate of 7 per cent must not have been resident in Italy for tax purposes in the five tax periods before the year of the move. Article 24-ter, paragraph 2, of the Italian Income Tax Code (TUIR) says so [1]. For individuals, the tax period coincides with the calendar year. Five whole years, one after another, with no exceptions: if even one of them turns out to be 'Italian', the regime does not start. And since Law 34/2026 raised the population ceiling for eligible municipalities, the regime now covers almost every comune in Sardinia [6].
The other two favourable regimes work the same way, with different numbers. The flat tax for new residents (Article 24-bis TUIR) requires nine years of non-residence out of the last ten, so one wrong year is tolerated [2]. The regime for inbound workers, the so-called impatriati, requires three (Article 5 of Legislative Decree 209/2023), rising to six or seven for those returning to work for the same employer or the same group [3]. The logic is the same across all three: the reward goes to people genuinely arriving from abroad, not to people returning after a short break. So far, familiar rules. The problem is what many foreign owners do not know: since 2024 you can become an Italian tax resident simply by spending too many days here. Without registering with the municipal population register, and without meaning to.
The rule itself is simple to state. Since 1 January 2024, anyone physically present in Italy for the greater part of the year — 183 days, or 184 in a leap year — is resident for tax purposes. This is the new Article 2, paragraph 2, of the TUIR, rewritten by Legislative Decree 209/2023 [4]. Fractions of a day count too: the day you arrive and the day you leave each count in full. And what matters is presence as such, not the reason for it: a holiday weighs exactly as much as remote work done from the Sardinian house for a foreign employer, as the Agenzia delle entrate (the Italian Revenue Agency) clarified in its circolare (circular) No 20/E of 4 November 2024 [5].
Take a concrete case. A foreign owner opens the house in mid-May and closes it in mid-October: roughly 154 days. Easter week adds 7. The Christmas and New Year break, another 10 or so. Three long weekends across the rest of the year, another 12. Total: past 183. Nobody in the family has ever spoken about moving, yet for the Italian tax authorities that is a resident year. And the count has to be redone for each year of the five, not just the last one.
Resident, moreover, means resident for the whole year, from January to December. Half-year residence does not exist in Italy, apart from the few double tax treaties that allow a split year for mid-year moves, among them those with Germany and Switzerland.
What does that involuntary year cost? Two distinct things. The first: for that year you pay Italian tax on all your income, wherever in the world it arises, and you must complete the quadro RW, the section of the Italian tax return where residents list the bank accounts, properties and investments they hold abroad [7]. The second, which is the subject of this article: that year contaminates the count of prior non-residence, and pushes the regime you were planning further into the future.
How far, the dates will tell you. Suppose the compromised year is 2026. For the 7 per cent regime the clean five-year run restarts in 2027 and closes with 2031: the first available option therefore falls on the 2032 tax period. Someone planning to move in 2027 loses five years over one summer. For the impatriati the delay is shorter, with access sliding to 2030. The 24-bis usually survives, because it tolerates one year in ten. The paradox is plain to see: the regime foreign pensioners want most, the 7 per cent, is also the strictest of the three about the past.
In my office I see the same wrong sequence, almost every time. First the house is bought. Then it is furnished and lived in 'almost all year round'. Only at the end, often a few weeks before the formal move, comes the question of which regime applies. The check on the previous five years, which should be the first step of the whole journey, arrives last, when the compromised years are already history and can no longer be corrected.
The check itself is done with documents the client already has at home: boarding passes, card statements, motorway toll records, the utility bills of the Sardinian house. They are the same documents the Agenzia delle entrate can use to recount the days in an audit, because the digital trail of a long summer is dense and does not fade. In my experience the problem is almost never a missing document: it is the client convinced that nobody counts the days, while his own bank statement is already counting them for him.
The risk needs stating in full. The option for these regimes is self-assessed: you exercise it in your tax return, and no office validates it at that moment. If the five-year period was compromised, the problem surfaces when the assessment arrives, possibly years later: loss of the regime, ordinary taxation of all foreign income for the years under challenge, penalties and interest. The tax office has until 31 December of the fifth year after the year in which the return was filed [8]. And proving the days, at that point, falls on the taxpayer.
The operational instruction is a single one. Before fixing the year of your move, recount your days of presence in Italy for each of the last five years, documents in hand. If 2026 is at risk, the calendar decision needs taking now, with four months of the year still to run, not in January, when the count will be closed.
Sources
[1] Article 24-ter, paragraph 2, of Presidential Decree No 917 of 22 December 1986 (TUIR, the Italian Income Tax Code).
[2] Article 24-bis, paragraph 1, TUIR.
[3] Article 5, paragraph 1, of Legislative Decree No 209 of 27 December 2023.
[4] Article 2, paragraph 2, TUIR, as replaced by Article 1 of Legislative Decree 209/2023.
[5] Circolare of the Agenzia delle entrate No 20/E of 4 November 2024.
[6] Article 26 of Law No 34 of 11 March 2026.
[7] Article 4 of Decree-Law No 167 of 28 June 1990, converted into Law No 227 of 4 August 1990.
[8] Article 43, paragraph 1, of Presidential Decree No 600 of 29 September 1973.
A preliminary eligibility check
A documentary reconstruction of your tax residence over the last five tax periods, with a year-by-year day count and a written opinion on access to the regimes under Articles 24-bis and 24-ter TUIR and Article 5 of Legislative Decree 209/2023, including the first tax period in which the option can be exercised. Scope and fee agreed in writing before the engagement begins.
Agostino Galizia
Chartered accountant and statutory auditor in Cagliari, Sardinia · Ordine dei Dottori Commercialisti ed Esperti Contabili di Cagliari No 1330/A · Italian register of statutory auditors No 80487.
This article is for general information only and is no substitute for advice on your specific circumstances.
