Italy is one of the most beautiful countries in the world. The food is real, the Mediterranean natural charm is real, and the Roman and Renaissance history is real. If you are wondering whether you should move to Italy and are looking for a place with genuine culture and a slower pace of life, Italy delivers.
Unfortunately, this is not the whole story, especially for expats. The income tax is one of the highest in the world, bureaucracy treats your time as if it has no value, roads haven't been properly maintained since the post-war reconstruction era, and a healthcare system makes you wait months for an appointment. I am not even talking about the stagnated economy, young Italians’ migration out of the country, and mass immigrant flow from Africa and the Middle East.
Most people who think about how to move to Italy have spent a week in Tuscany, not six months trying to open a bank account. I am writing for the second group. In this article, I will explain what it is really like living in Italy, including taxes, the cost of living in Italy, healthcare, infrastructure, politics, bureaucracy, and tourists.
If you move to Italy and choose a well-known city, you will be sharing it with a very large number of visitors who do not live there. This is obvious before you move, but becomes quietly exhausting after you do.
The economic importance of tourism to Italy is real; tourist places in Italy, like Venice, Florence, and Rome, depend heavily on it. However, tourism shapes those cities in ways that work against people who actually live there. Restaurants near major sites are priced for people who are spending a week, not a year. Local shops get replaced by souvenir vendors, especially around major tourist attractions in Italy. Public transport fills up with people who do not know the system. There is rarely much contact between the tourist population and the people who call the city home.
Italy's frequent political shifts and evolving tax policies create uncertainty that can make long-term planning difficult for expats
Italy has had over 65 governments since World War II. That number is not a quirk of history. It reflects how the Italian political system actually functions as coalitions form, collapse, and reform on a regular basis. For most of daily life, this does not matter much. For your financial planning as an expat, it matters more than you would like.
Tax regimes that exist when you make your decision may not exist in the same form when you arrive, and may have changed again by the time they would have benefited you. The direction of travel has generally been toward restricting them or making them more expensive.
Italy's government takes a large share of what you earn and does not always deliver equivalent services in return. That is the honest summary of the deal you are accepting.
The broader political direction in Europe is also worth considering. The continent is dealing with demographic decline, unsustainable pension systems, and governments that have built welfare states they cannot fully afford. Italy is not unique in this, but it is an example of the pattern in a particularly visible form. You are not moving to a country on an upward trajectory.
Italy's public administration is genuinely difficult to make sense of. There is no elegant way to say it. Offices have short and inconsistent hours, processes are fragmented across multiple agencies, and the amount of documentation required to do basic things, such as open a bank account, register as a resident, and get a driving licence recognized, is more than most people expect.
Tax filing is manageable if you are a simple employee using the Modello 730 system. If you have foreign income, investments abroad, or are self-employed, it gets complicated fast. That is why you will need a commercialista.
Italy's aging infrastructure, heavy traffic, and regional disparities can make everyday life far more frustrating than many expats expect
The infrastructure gap between northern and southern Italy is one of the most persistent and talked-about issues in the country, and it is real. Milan, Turin, and Bologna have modern road and rail connections. Parts of the south have road conditions and public transport links that feel a generation behind. Over 80% of trips in Italy are made by car. It is one of the most car-dependent countries in Europe, and the roads do not match that dependency.
In the cities, traffic is its own problem. Rome and Naples are some of the most congested cities in Europe. Italian city driving operates by rules that are partly written and partly improvised, and parking in a restricted traffic zone (ZTL) will earn you fines that show up by post weeks later. You could sometimes receive multiple fines from a single drive, from different cameras positioned along the same route.
Italy has a universal public healthcare system called the SSN (Servizio Sanitario Nazionale). It is funded through taxes and covers citizens and legal residents. Overall, healthcare in Italy offers decent quality, particularly in the northern regions.
The problem is wait times. For anything non-urgent, you can wait months for a specialist appointment through the public system. The quality also drops significantly as you move south.
As expected, most expats end up using private healthcare in Italy, at least partially, to avoid the queues. Annual private health insurance for one person ranges between $1,000 USD and $3,000 USD, depending on age and coverage. This is especially relevant when considering healthcare in Italy for foreigners.
Since 2024, foreigners who voluntarily register for the public system pay a minimum of €2,000 ($2,350 USD) per year for access. That is just the entry fee. EU citizens have an easier path through the European Health Insurance Card, but after three months, they still need to register with the local health authority. In practice, many residents end up paying for both the public system through taxes and a private plan to actually access healthcare in Italy within a reasonable timeframe.
The cost of living in Italy varies a lot depending on where you are. In rural areas of Sicily, Calabria, or Abruzzo, you can live well on a modest income. In central Rome or Milan, you are paying prices comparable to major Western European capitals. The national average sits somewhere in between.
The monthly cost of living in Italy, for a single person excluding rent, runs around $935 USD. However, a one-bedroom apartment in a city centre adds roughly $805 USD per month at the national average, but in Rome or Milan, that number climbs to $1,200–$2,000 depending on the neighbourhood. As a family in a three-bedroom city-centre apartment, your total monthly costs land somewhere between $4,200 and $5,500 USD.
Although the cost of living in Italy is somewhat similar to that of other Western European countries, it is still more expensive than in Latin American countries, which offer tax advantages and access to a world of luxury. Take Paraguay, for instance. The cost of living in Paraguay is around 47% cheaper than in Italy, including rent. Add in what you save on tax, Paraguay runs a territorial system with a flat 10% rate on personal income, and you'll invest and spend far more than you would in Italy. For the money you would spend on an average lifestyle in Italy, you can live upscale in Paraguay.
However, if you go for an upscale neighbourhood, international schools, or private healthcare in Italy, the number moves fast. Annual tuition at an international primary school can reach $22,000 USD, and rent in premium areas of Milan or Rome can push well above $4,000 per month. Italy is not a cheap country for expats, particularly if you end up paying privately for services, healthcare in Italy for foreigners, schools, and childcare that the public system theoretically covers but practically struggles to deliver on time.
Italy has a progressive income tax system called IRPEF. The rates start at 23% and climb to 43% for anything above €50,000 ($58,500 USD). That alone is not unusual for Europe and reflects the standard Italian tax rate structure. What catches people off guard is that those are just the national rates.
On top of IRPEF, each region charges its own surcharge, between 1.23% and 3.33%, and municipalities add another layer on top of that, up to 0.9%. If you live in Rome or Milan and earn a decent salary, your real marginal rate gets close to 47%, which is why many expats research income tax in Italy before relocating. For instance, if you earn $70,000 USD a year, you will likely pay somewhere around $21,800–24,000 in income tax alone. That is the reality before you factor in social contributions.
Another piece of bad news for Italian enthusiasts is that the reach of the tax system does not stop at your local income. Once you are a tax resident, Italy taxes your worldwide income. Foreign bank accounts, investments, and property abroad all need to be declared. There is a 0.2% annual wealth tax on financial assets held outside Italy and a 1.06% tax on foreign real estate. For expats with assets in other countries, this can significantly increase their income tax rate in Italy.
On top of income tax, social security contributions (INPS) take another significant chunk out of employment income. The combined employer-employee contribution rate can exceed 40% of gross salary in some categories, which further reinforces the overall burden of income tax in Italy.
There are some incentives for new residents. Some workers relocating to Italy can get a 70% income exemption for the first few years. Retirees moving to the south get a flat 7% rate on foreign pension income for up to ten years. High-net-worth individuals can pay a flat €300,000 ($350,000 USD) per year on all foreign income. Although those sound like real benefits, they are time-limited, come with conditions, and have been modified more than once by different governments. Thus, you cannot know when the law changes after you are relocated.
Italy is a wonderful place to visit, but the realities of living there, including high costs, bureaucracy, and unpredictable policies, make it a less attractive Plan-B destination than many people expect
Italy is not a cheap country to live in. The cost of living in Italy is higher than many expect, and the tax burden is heavier than it looks. Healthcare in Italy works, but you will likely pay twice, once through taxes and once through private insurance. Infrastructure quality is uneven and significantly worse outside the north. The bureaucracy will take up the time you did not plan to spend. The government has shown, repeatedly, that it can change the rules that attracted you in the first place.
For sure, Italy is genuinely beautiful; the food and culture are real in a way that is hard to find elsewhere, and outside the major cities, the cost of living in Italy decreases. However, if you go in based on a holiday and some YouTube videos, the gap between expectation and reality will be significant, especially if you haven’t seriously considered how hard it is to move to Italy.
For expats building Plan-B, there are many other great destinations where you can find natural beauty, modern amenities, stable laws for expats, and a way lower cost of living compared to Europe or North America. If you are still asking yourself, “Should I move to Italy?", it may be worth comparing alternatives before making a final decision. If you don’t know how to start your search, download our free special report on Plan-B Residencies & Instant Citizenships.