Tax Incentives For Moving To Sicily: 50% IRPEF Reduction Proposal

Sicily is proposing a 50% cut in personal income tax (IRPEF) to attract new residents from abroad.

Discover the latest legislative developments, the benefits for potential new residents moving from overseas, and how a law firm can assist with tax planning and relocation procedures.

The proposal to halve the IRPEF for those transferring their tax residence to Sicily from abroad is the key measure within a package of around thirty amendments submitted by the Sicilian Regional Government to the Budget Committee of the Sicilian Regional Assembly (ARS), aimed at expanding the draft of the 2026 Financial Law.

What is IRPEF?

The Imposta sul Reddito delle Persone Fisiche (IRPEF) is the Italian personal income tax, levied on individuals for income from property (buildings and land), capital, employment (including similar income), and pensions.

The Sicilian Regional Assembly has placed at the centre of political debate an innovative fiscal proposal with a clear objective:
"to counter depopulation, encourage the settlement of new families, attract human capital, and stimulate the regional property market..."

Among the measures included in the Regional Stability Law is the incentive tied to halving the IRPEF, which could make moving to Sicily particularly advantageous for those who previously had tax residency abroad, foreigners as well as Italians returning home after years of work overseas.

What the IRPEF Proposal Provides

According to the amendments approved by the Budget Committee of the Sicilian Regional Assembly, the Region has introduced into the Financial Law a measure granting a refund equal to 50% of the IRPEF declared and paid by those transferring their tax residence from abroad to Sicily.

The benefit applies exclusively to individuals who purchase or renovate a property in any municipality on the island within 12 months of moving, and retain ownership until at least 31 December of the second year following the relocation.

The incentive is open to employees, self-employed workers, and pensioners who are tax residents in Italy, and it can reach up to €100,000 per year for three years.

The Regional General Accounting Office explained that the measure is designed to self-finance, thanks to the increased IRPEF revenue generated by the new taxpayers.

Who could benefit from the IRPEF reduction

To benefit from the IRPEF cut, one must have taxable income or a pension subject to Italian taxation.

The rise of remote work could encourage the relocation to Sicily of so-called digital nomads, skilled professionals who can work remotely from anywhere with just a computer and an internet connection.

Sicily would offer them, beyond the fiscal relief, a mild climate, stunning locations, excellent cuisine, and a competitive cost of living.

It is important to note that this proposal is distinct from the national tax relief for returning workers (impatriates), an existing scheme in Italy allowing those who move their residence from another country to pay a reduced tax on part of their foreign income for a set period.

The Sicilian measure adds to this by offering a regional IRPEF refund.

Legislative progress

The provision has already been approved by the Budget Committee of the Sicilian Regional Assembly, and its implementation now awaits publication in the Official Gazette, along with the issuance of specific decrees and regulations defining eligibility criteria, procedures, and timeframes for access to the benefit.

The requirement to purchase or renovate a property could significantly boost Sicily's real estate market.

The ongoing outflow of students and workers from Sicily to other countries calls for new measures capable of reversing the trend, making it advantageous to move to Sicily rather than leave it.

The basis for the IRPEF reduction in the July Decree

On 15 July 2025, the Italian Council of Ministers approved, on a preliminary basis, a legislative decree implementing the Sicilian Regional Statute's provisions on financial matters.

This act, described as "historic" by Sicilian government sources, aims to fully realise the financial autonomy provided for in Sicily's special statute, largely unimplemented for decades.

In summary:

• Content: the decree amends Article 6 of Presidential Decree no. 1074 of 26 July 1965, granting full implementation of Sicilian financial autonomy.
• Procedure: being a national legislative decree (though derived from the special statute), final approval follows the national process, including publication in the Official Gazette of the Italian Republic.
• Impact in Sicily: the decree has significant political and economic importance for the island, as it opens new prospects for Sicily's "development-oriented fiscal policy".

Thanks to this decree, the Sicilian Region will be able to autonomously adjust local taxes such as IRPEF and IRAP, and related surcharges — in some cases reducing them to zero, to attract new residents and investments.

Each modification, however, must still be enacted by the regional authorities to become operational.

One-Euro Houses

Those wishing to relocate to Sicily can also take advantage of the long-running "Houses for €1" initiative.

This does not merely involve buying properties for the symbolic price of €1, but also the opportunity to renovate and restore them, thereby returning them to the local community.

The €1 applies only to the purchase price of the property; buyers are responsible for all transaction costs and the mandatory renovation expenses, which must be completed within a specified timeframe.

Why Sicily is promoting this measure

Sicily is among the Italian regions most affected by depopulation.

Demographic projections show that its population could drop significantly in the coming decades due to a negative natural balance and a steady outflow of emigrants, especially young and skilled workers.

A powerful fiscal incentive, combined with a low cost of living and a unique cultural and natural setting, could attract workers, retirees, digital nomads, and investors.

Real benefits and practical considerations

The advantages stem not only from reduced regional IRPEF burdens but also from the possibility of combining these incentives with other local measures, such as urban regeneration projects and initiatives to purchase properties at symbolic prices in depopulated villages.

From a practical standpoint, it is essential to assess:

• how the refund will be disbursed and under what eligibility criteria;
• when the rules will actually become effective;
• whether the measure is compatible with other existing tax regimes.

A preliminary analysis of one's income, assets, and personal needs is crucial to determine the real fiscal benefit.

Why contact a specialised law firm

The regulatory framework is evolving and includes several technical aspects requiring personalised evaluation.

Our international law firm assists both Italian and foreign clients through every stage of their tax relocation to Italy, from verifying eligibility to optimising their tax burden.
We can assist with:

• personalised tax planning considering national and regional incentives;
• preparing and reviewing documentation for tax residency transfer;
• identifying property opportunities in Sicily and verifying their legal status;
• representation and assistance in dealings with financial authorities.

If you are considering relocating to Sicily for personal or professional reasons, contact us for a preliminary consultation.

FAQ – 50% IRPEF Reduction for Those Moving to Sicily

Is the measure already in effect?

Not yet. It has been approved by the Budget Committee of the ARS but will become effective only after publication in the Official Gazette and the issuance of implementing decrees.

Who can benefit from the IRPEF reduction in Sicily?

Anyone transferring their tax residence from abroad to Sicily, whether Italian or foreign citizens, provided they purchase or renovate a property within 12 months of moving.

How much can one save?

The refund equals 50% of the IRPEF paid, up to a maximum of €100,000 per year, for three years.

Is buying a property required to obtain the benefit?

Yes. The transfer of tax residence must be accompanied by the purchase or renovation of a property in Sicily, which must be retained for at least two years.

Does the measure apply to retirees as well, or only to workers?

It applies to employees, self-employed workers, and retirees with taxable income in Italy.

Can it be combined with the national tax relief for returning workers?

Generally, no. The regional proposal limits cumulation, though each case should be evaluated individually.

When will it come into force?

After the final approval of the regional financial law and publication of the implementing regulations, expected during 2026.

Why has Sicily introduced this measure?

To counter depopulation, attract new residents, and stimulate both the property and labour markets.

What advantages does it offer to new residents?

Besides significant tax savings, Sicily offers a lower cost of living, favourable climate, high quality of life, and investment opportunities in affordable properties.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.