Do you think those who are leaving their natal nation for Italy are moving “for” something or “against” something, or a combination? Because if it is for something dolce, a sense of place that the Italian story and perhaps vacations have confirmed, then I suspect the paessagio is not enough to make up for a passagiata without joy, or at least without four generations strolling the otherwise picturesque piazza.
Young Italians leaving their homeland means that there will be no babies to replace them. Catholic Italy has the lowest birth rate in the already sub-replacement EU, 6.3 live births per 1,000. The odds are not high of meeting a baby and parents on that stroll. I am studying the patterns of these churches as part of my work as an eco-regional designer and feel like the emptiness of these once fully integrated Domus ecclesia and the emptiness of cribs and elementary schools are related, and that the urgent challenge is to refill both with souls to fully appreciate the beauty of the Italian story embodied in this landscape.
I love the hopeful and light tone of your stack, so don’t want to be a downer. I have a great love and affinity for my Italian friends old and new and am focusing on revival there to help Italians- by birth and by choice- to be hopeful and heroic enough to make families and communities again. The story is the source for re-enchantment, revivification and repopulation from that cultural and spiritual base. Not by importing a quota of bodies who don’t care to retell the stories. It’s not a numbers thing alone. Numbers are tools not Truth.
Now, back to your regularly scheduled, fun and hopeful Substack….
Clark, this is a lovely comment, not a downer at all. :)
It's a combination, I think. The ones moving toward something tend to stay. The ones moving away bring the problem with them and are more likely to leave again. (The old "wherever you go, there you are.")
Your point about the empty churches and the empty cribs being the same emptiness is on the money. The piazza needs the four generations, not just the paesaggio. It's a hard thing to solve, and I suspect you're right that it starts with the story rather than the numbers.
Well said, Antonio. And, yes, those wrong accents… In Canada, as I’m sure you’ve noticed, 99% of restaurants, shamefully, even Italian ones, get Tiramisù wrong. And often it’s not just the accent. I digress.
So you lived in Canada, it seems. Was it Toronto? You left Italy (region?), for I guess a better, if not at least different, life, then returned. Was it the weather—which I wouldn’t blame you for—or the different lifestyle, or the people who say they’re coming for dinner but don’t?
I visit Italy twice yearly. I’ve traveled from north to south with still much to see. I spend months in the south because I like the slower pace and the warmer weather that lasts longer. But the best mussels in all of Italy are in Taranto, so I remain. 😉
As you eloquently put it, for foreigners who adopt Italy and live off their savings and pensions from abroad, it’s La Dolce Vita lived well. Unfortunately, the locals struggle and live to complain. It’s in their DNA to do so and they indoctrinate their offspring to do the same thing. It’s a never-ending cycle of lamentela. But they carry on as Italians always have.
Should life in Italy be better? Absolutely yes. Given its vast and expansive richness, it appears the outside world is better positioned to enjoy its fruits of labour. It should be the opposite —or at least on par.
I love Italy. What’s there not to love? It’s likely why you returned. And why would you?
Thanks, Nicholas! I hear you about the tiramisù accent and the Taranto mussels.😄
One clarification: I'm still in Canada. I visit every year and plan to retire in Italy, but at the moment, unless my working circumstances change radically, I'm here.
On the lamentela, I'd offer a slightly different read. Complaining is what people do when they're staying. The ones who go are the ones who stopped complaining. The complaining is real, but I think it's the sound of the problem more than the cause of it.
Okay, for some reason I thought you were back in Italy. Indeed, it’s the ones who remain that complain. I find when you ask expatriates, they’ll still complain about how better the opportunity is here but the life is better in Italy. I guess there’s no perfect place. Like you, I return to it dot twice yearly. I spend a lot of time there end enjoy it very much. But my position is much different than Italians’ position.
You’re really right about the taxes. I have Self-Employed and rental income in the US that I can take with me, but my income is low, more in line with the average Italian .
In the US I pay very little taxes on this. In Italy, the tax hit would be so high that I don’t think I could survive even with the lesser cost of living. Maybe when I retire, and have Social Security pension, but the 7% locations seem to limiting….
I would definitely become one of those Italians (I’m jure sanguis dual) who complains!
I hear you. With dual citizenship, the 7% would actually be 7%, by the way, so it's a shame that the eligible locations don't really appeal to you. That said, have you looked into regime forfettario? Below 85K euros, for self-employment via Partita IVA, taxes are fairly low.
I have a friend who lives near Bologna who’s a freelance IT guy, and he said he pays about 25% on his Self-Employed income. I’m guessing that’s what you mean? I wonder if foreign rental income would qualify for self-employment via Partita IVA? Or if I could set it up so it does. Definitely need to talk to an accountant/commercialista to research it. Thanks for the tip
Most likely, yes. Forfettario starts at 5% and rises to 15% after the first five years, but you also have to account for pension contributions, so 25% all-in is in the right ballpark.
What you can't do is declare rental income from US properties as self-employment income. That portion stays reddito diverso, and Italy taxes it, generally allowing a credit for the US tax you pay on it.
Impatriati is an alternative to forfettario, in which you pay taxes only on 50% of your qualifying income for the first five years. However, that applies only to employment and self-employment income earned for work performed in Italy. So it doesn’t help with your rental income either.
The good news is that the Italian taxable base for foreign properties is generally based on the net figure from your US return, which can be reduced by deductions such as depreciation and mortgage interest.
The bad news is IVIE, a yearly tax on the value of your foreign properties. The standard rate is 0.76%, although higher rates can apply in some cases. It’s calculated on the property value, so it can be the bigger of the two bills.
I'll write a proper comparison of impatriati and forfettario soon. But yes, this is well worth a conversation with a commercialista, and for your self-employment income, forfettario would almost certainly win.
Would declaring rental income as self-employment income be allowed under the Italian tax code?
And it's my understanding that because I actually pay more (2%) than the .76% wealth tax as a local property tax ( really our version of a wealth tax except we call it something else), that I can deduct the property tax against the wealth tax.
There are some edge cases, but foreign rental income is not allowed as self-employment income.
You're correct on the credit. BTW, IVIE is 1.06% now, not 0.76%; it was raised by the 2024 budget law.
IVIE allows an offset for foreign wealth taxes on the property in the US. At 2%, you probably wipe it out. But you still need to file the Quadro RW either way.
Talk to a commercialista, but on paper, your fiscal load in Italy might be pretty light.
Oh, I see I misread your first response. I thought you originally said you said I could declare the rental income as Self-employment. got me all excited!
The 7% retirement tax rate is very tempting, and I could probably find a few places I would like to live. but I’m quite a few years away from my Pension days. I think next time I’m in Italy, I’ll make an appointment with one of my friends commercialistas and really drill down. Thanks for your advice and information.
Interesting.
Do you think those who are leaving their natal nation for Italy are moving “for” something or “against” something, or a combination? Because if it is for something dolce, a sense of place that the Italian story and perhaps vacations have confirmed, then I suspect the paessagio is not enough to make up for a passagiata without joy, or at least without four generations strolling the otherwise picturesque piazza.
Young Italians leaving their homeland means that there will be no babies to replace them. Catholic Italy has the lowest birth rate in the already sub-replacement EU, 6.3 live births per 1,000. The odds are not high of meeting a baby and parents on that stroll. I am studying the patterns of these churches as part of my work as an eco-regional designer and feel like the emptiness of these once fully integrated Domus ecclesia and the emptiness of cribs and elementary schools are related, and that the urgent challenge is to refill both with souls to fully appreciate the beauty of the Italian story embodied in this landscape.
I love the hopeful and light tone of your stack, so don’t want to be a downer. I have a great love and affinity for my Italian friends old and new and am focusing on revival there to help Italians- by birth and by choice- to be hopeful and heroic enough to make families and communities again. The story is the source for re-enchantment, revivification and repopulation from that cultural and spiritual base. Not by importing a quota of bodies who don’t care to retell the stories. It’s not a numbers thing alone. Numbers are tools not Truth.
Now, back to your regularly scheduled, fun and hopeful Substack….
Clark, this is a lovely comment, not a downer at all. :)
It's a combination, I think. The ones moving toward something tend to stay. The ones moving away bring the problem with them and are more likely to leave again. (The old "wherever you go, there you are.")
Your point about the empty churches and the empty cribs being the same emptiness is on the money. The piazza needs the four generations, not just the paesaggio. It's a hard thing to solve, and I suspect you're right that it starts with the story rather than the numbers.
Well said, Antonio. And, yes, those wrong accents… In Canada, as I’m sure you’ve noticed, 99% of restaurants, shamefully, even Italian ones, get Tiramisù wrong. And often it’s not just the accent. I digress.
So you lived in Canada, it seems. Was it Toronto? You left Italy (region?), for I guess a better, if not at least different, life, then returned. Was it the weather—which I wouldn’t blame you for—or the different lifestyle, or the people who say they’re coming for dinner but don’t?
I visit Italy twice yearly. I’ve traveled from north to south with still much to see. I spend months in the south because I like the slower pace and the warmer weather that lasts longer. But the best mussels in all of Italy are in Taranto, so I remain. 😉
As you eloquently put it, for foreigners who adopt Italy and live off their savings and pensions from abroad, it’s La Dolce Vita lived well. Unfortunately, the locals struggle and live to complain. It’s in their DNA to do so and they indoctrinate their offspring to do the same thing. It’s a never-ending cycle of lamentela. But they carry on as Italians always have.
Should life in Italy be better? Absolutely yes. Given its vast and expansive richness, it appears the outside world is better positioned to enjoy its fruits of labour. It should be the opposite —or at least on par.
I love Italy. What’s there not to love? It’s likely why you returned. And why would you?
Thanks, Nicholas! I hear you about the tiramisù accent and the Taranto mussels.😄
One clarification: I'm still in Canada. I visit every year and plan to retire in Italy, but at the moment, unless my working circumstances change radically, I'm here.
On the lamentela, I'd offer a slightly different read. Complaining is what people do when they're staying. The ones who go are the ones who stopped complaining. The complaining is real, but I think it's the sound of the problem more than the cause of it.
Okay, for some reason I thought you were back in Italy. Indeed, it’s the ones who remain that complain. I find when you ask expatriates, they’ll still complain about how better the opportunity is here but the life is better in Italy. I guess there’s no perfect place. Like you, I return to it dot twice yearly. I spend a lot of time there end enjoy it very much. But my position is much different than Italians’ position.
You’re really right about the taxes. I have Self-Employed and rental income in the US that I can take with me, but my income is low, more in line with the average Italian .
In the US I pay very little taxes on this. In Italy, the tax hit would be so high that I don’t think I could survive even with the lesser cost of living. Maybe when I retire, and have Social Security pension, but the 7% locations seem to limiting….
I would definitely become one of those Italians (I’m jure sanguis dual) who complains!
I hear you. With dual citizenship, the 7% would actually be 7%, by the way, so it's a shame that the eligible locations don't really appeal to you. That said, have you looked into regime forfettario? Below 85K euros, for self-employment via Partita IVA, taxes are fairly low.
I have a friend who lives near Bologna who’s a freelance IT guy, and he said he pays about 25% on his Self-Employed income. I’m guessing that’s what you mean? I wonder if foreign rental income would qualify for self-employment via Partita IVA? Or if I could set it up so it does. Definitely need to talk to an accountant/commercialista to research it. Thanks for the tip
Most likely, yes. Forfettario starts at 5% and rises to 15% after the first five years, but you also have to account for pension contributions, so 25% all-in is in the right ballpark.
What you can't do is declare rental income from US properties as self-employment income. That portion stays reddito diverso, and Italy taxes it, generally allowing a credit for the US tax you pay on it.
Impatriati is an alternative to forfettario, in which you pay taxes only on 50% of your qualifying income for the first five years. However, that applies only to employment and self-employment income earned for work performed in Italy. So it doesn’t help with your rental income either.
The good news is that the Italian taxable base for foreign properties is generally based on the net figure from your US return, which can be reduced by deductions such as depreciation and mortgage interest.
The bad news is IVIE, a yearly tax on the value of your foreign properties. The standard rate is 0.76%, although higher rates can apply in some cases. It’s calculated on the property value, so it can be the bigger of the two bills.
I'll write a proper comparison of impatriati and forfettario soon. But yes, this is well worth a conversation with a commercialista, and for your self-employment income, forfettario would almost certainly win.
Would declaring rental income as self-employment income be allowed under the Italian tax code?
And it's my understanding that because I actually pay more (2%) than the .76% wealth tax as a local property tax ( really our version of a wealth tax except we call it something else), that I can deduct the property tax against the wealth tax.
There are some edge cases, but foreign rental income is not allowed as self-employment income.
You're correct on the credit. BTW, IVIE is 1.06% now, not 0.76%; it was raised by the 2024 budget law.
IVIE allows an offset for foreign wealth taxes on the property in the US. At 2%, you probably wipe it out. But you still need to file the Quadro RW either way.
Talk to a commercialista, but on paper, your fiscal load in Italy might be pretty light.
Oh, I see I misread your first response. I thought you originally said you said I could declare the rental income as Self-employment. got me all excited!
The 7% retirement tax rate is very tempting, and I could probably find a few places I would like to live. but I’m quite a few years away from my Pension days. I think next time I’m in Italy, I’ll make an appointment with one of my friends commercialistas and really drill down. Thanks for your advice and information.
So right you are Antonio. Great article I totally share.
Thank you, Tino. I appreciate you. 🙏🏻