Written by Julia in Puglia,
Last Modified: 25th November 2021

Villages in southern Italy with populations under 20,000, are offering a 7% flat rate tax when you become resident there in retirement.

Even if this doesn’t apply to you, these villages are still worth looking at as they often have properties at great prices and a good cost of living. Small towns and villages in southern Italy are popular locations to buy a holiday home, or even a forever home. Below I will suggest a few villages on mainland southern Italy.

Find out more by downloading our full guide to buying property in Italy.

5 reasons to buy in southern Italy

1. The sunshine and low rainfall is the main attraction. Winters are generally mild, although freak weather conditions can occur, such as snow, or storms, especially on higher ground.

2. Many towns and villages in southern Italy are a short drive to the sea. Due to its popularity as a summer holiday destination, it’s possible to buy property suitable to rent to tourists.

3. Although largely rural the south does have large towns with all the facilities you need and good transport links to popular tourist areas. High-speed trains are on the way, and the regions that attract a lot of tourists over the summer, such as Campania, Puglia, Calabria, Sicily and Sardinia, have airports.

4. Property prices in southern villages are generally cheaper than in the north due to young people heading to the cities for university and work. Like south west England, unemployment for the young is high, but for retirees the south is still very attractive.

5. The new recovery fund has allocated billions to regions in southern Italy, and they are promoting investment in southern enterprises and innovative ecosystem projects. This will create more work, and improvements in healthcare, transport, infrastructure etc. I would suggest that the best locations are those within a 45 minute drive of: an airport, a large town with a hospital and tourist attractions. Good roads and nearby food shops are a necessity.

Otranto town in Puglia

What regions are included in the 7% tax?

The regions included in the 7% flat tax scheme are: Abruzzo, Molise, Campania, Puglia, Basilicata and Calabria. Also, the islands of Sicily and Sardinia.

What does the 7% tax apply to?

This 7% substitute tax can apply to pension income, and overseas business, employment and rental income. Also, investment income from non-Italian companies, wealth tax on foreign assets and exemption from declaring foreign assets.

However, it does not extend to Italian-sourced income, such as rental income on Italian property, this will be taxed in the normal way. Also, if your pension is paid by a government or local authority in another country, it may not apply to that. Always get professional advice for your particular case.

We can put you in touch with a trusted lawyer for advice about Italian taxes.

Who can get the special tax rate?

Pensioners of any nationality can apply if they:

  • Have been tax resident outside Italy for at least 5 years prior to the tax year which they will become an Italian tax resident.
  • Transfer their tax-residence to one of the defined regions in southern Italy, in a municipality (comune) with a population of fewer than 20,000 inhabitants. Alternatively, a municipality, with fewer than 3,000 inhabitants in a defined seismic area.
  • Have previously been resident in a territory with which Italy has in place arrangements for administrative co-operation. For example, sharing tax information.

Timings

The 7% regime currently applies for nine years (it initially was only 5 years). It’s important you transfer residency at the optimum time of year to fit in with a full tax year. After 9 years the normal rates will apply.

Where can I find a nice village with a population of under 20,000?

Many people retiring to Italy are currently asking the same question. Where can I find a nice village with a population of under 20,000? You can look up population figures broken down by region, province and municipality on tuttiitalia.

If you already have a particular village in mind, you can also find the population of individual municipalities listed alphabetically on I.stat   However, before moving there do check the data is up to date with the local commune. Also, seek recommendations from residents of the region. Here are some examples of the types of villages you will find in the mainland regions of southern Italy.

Abruzzo region, southern Italy

Citta Sant’Angelo, Pescara –  Population 14,250

Citta Sant’Angelo is a small Medieval hill top town with great views of the Gran Sasso Mountains and towards the coastline of Pescara. There are shops, bars, restaurants, museums, and it is a short drive from a hospital and outlet village. It is 30 minutes from Pescara airport, in the Abruzzo region. Apartments cost from €45,000 and houses from €75,000.

Penne, Pescara – Population 11,716

The historical centre of Penne is located in a panoramic position on two hills, with a picturesque piazza. It is near a Nature reserve and Lake Penne. It has shops, a museum, hospital, pharmacy etc. 45 minutes drive from Pescara airport. The cost of an apartment can start at €65,000, but something in a historic building can cost over €165,000.

Penne, Pescara

Rocca San Giovanni, Chieti – Population 2,301

Rocca San Giovanni is known for the trabocchi (fishing platforms) which are open for guided tours and host dinners based on traditional seafood dishes. Fishing, diving, cycling, walking and swimming in the sea are all popular. Cavalluccio beach, is one of the most beautiful on the coast. It is located 45 minutes drive along the coast from Pescara airport. Apartments cost from €54,000 and detached house from €200,000.

Puglia region, southern Italy

The Puglia region is a great place to retire to. There are two airports and big towns with all the amenities you would need such as hospitals, supermarkets, DIY stores etc.

Oria, Brindisi – Population 14,711

Oria’s historic centre is on a hill with a castle and church, looking across the plains towards the vineyards of Manduria and 30 minutes from the sea. It is well known for it’s Medieval tournament held in August. It has shops, restaurants etc. Further facilities, such as a hospital are in the nearby town of Francavilla Fontana. Oria is 35 minutes drive from Brindisi airport. Apartments and small countryside villas needing some work start at around €35,000. €200,000 could buy you a large property in the historic centre with vaulted ceilings.

For innovative ideas on raising the money to buy your Italian home, read How to Pay for an Italian Property.

Carovigno, Brindisi – Population 16,903

Popular with British expats, Carovigno is conveniently located between the airport at Brindisi (30 minutes), the sea (12 mins), and the white hill top town of Ostuni (30 mins), which attracts many  tourists and hosts several summer events. The town has a castle, restaurants, bars and shops. Apartments cost from €41,000 and countryside villas from €60,000.

Locorotondo, Bari – Population 14,074

Loocrotondo has a charming historic centre with views across rolling hills. Tall whitewashed houses with sloping stone roofs and flower-filled streets attract visitors and the countryside area is dotted with the cone-shaped Trulli houses. It is one hours’ drive from both Bari and Brindisi airports. Apartments cost from €80,000 but can be over €285,000 in a central area. Countryside villas and Trulli from €185,000.

Locorotondo, Bari

Otranto, Lecce – Population 5,769

Otranto is located on the east coast of the Salento peninsula, and is 35 minutes from the beautiful town of Lecce. It is a lovely port town, that has a castle with a dry moat. The town’s basilica has a fine mosaic pavement dating from 1166. The population grows greatly when holiday makers descend on the town in the summer months, and there are many lovely, restaurants and cafes overlooking the sea. It’s a one hour drive down the coast from Brindisi airport. Apartments cost from €85,000 and villas from €200,000.

Molise region, southern Italy

Molise is a lovely little region and property prices here are very cheap. The Campobasso municipality has a population of almost 48,000, however, most surrounding villages have less than 5,000 inhabitants. The downside for foreign buyers is the distance to the nearest airport. Campobasso is about central to Naples and Pescara airports, with drive times of over two hours to both.

Molise does have a lovely stretch of coastline on the Adriatic sea. Its main seaside resort and port town is Termoli, which is about two hours’ drive from Pescara airport.

Guardialfiera, Campobasso – Population 1,053

Guardialfiera is a welcoming village on the outskirts of the lower Molise in the Campobasso province. It stands out from the hill and has a historic centre that was built around the 10th century. The village as a whole, called Piedicastello, is built around the ancient castle, and the surrounding walls.

Guardialfiera also offers lots of nature, with the woods of San Martino and San Nazzario in the upper part. Then there is Lake Guardialfiera where you can picnic, swim or sunbath along its sandy shores. The town itself has a bank, post office, food shops, restaurants and bars. Guardialfiera is 1 hour 35 minutes from Pescara airport. Apartments in Guardialfiera cost around €50,000 and town houses start at €97,000.

Petacciato, Campobasso – Population 3,485

A few kilometres from Termoli, Petacciato is characterized by a beautiful ancient village and a maritime area equipped for tourism. Petacciato Marina has beautiful beaches and enjoys breathtaking views. If you are looking for relaxation, with natural areas to walk and cycle, this is it. Apartments in Petacciato cost around €60,000 and villas from €110,000. A large villa costs about €350,000.

We can put you in touch with a trusted lawyer for advice about purchasing property.

Campania region, southern Italy

Castellabate, Salerno – Population 9,225

Castellabate is located in the province of Salerno in the heart of the Cilento National Park . The town is an ancient village of medieval origins. It is included on the list of ” most beautiful villages in Italy ” and is also a World Heritage Site by UNESCO. The town is located about 300 metres above sea level and is characterized by narrow cobbled streets, ancient buildings that hide elegant courtyards and terraces that can offer wonderful views. The nearest big hospital is in Agropoli, which is 20 minutes’ drive and the nearest airport is Naples (1hr 49mins). Castellabate apartments start at about €135,000, or €180,000 with a sea view. Villas cost from €280,000.

Castellabate, Salerno

Summonte, Avellino –  Population 1,589

Summonte is a well kept inland village in the Portenio natural park. Little alleyways lead to great views of the mountains. There are several good trattorias and cafes, to enjoy the local cuisine. The village hosts a music festival and chestnut festival that attract many visitors.

The focal point of the village is the large tower which is lit up at night and can be visited at weekends. It is a lovely area for walking through the nature park and chestnut groves. Drive time to Naples airport is just 45 minutes, and the sea at Salerno is also 45 minutes drive. Apartments in Summonte cost from €85,000 and town houses from €125,000.

Basilicata region, southern Italy

Like Molise, the region of Basilicata doesn’t have an airport and has few tourists, but it does offer authentic Italian villages with great views and low property prices. The nearest airports are Naples and Bari.

Irsina, Matera – Population 4,972

Irsina is a step back in time and is in quite a remote area. A tree-lined street stretches up to the historic centre, where you can see views across low rolling hills, mountains and woodland. Ancient walls surround the historic centre with its watchtowers, noble palaces, small churches and narrow streets. In the newer side of town, there are bars, shops and a sports field.

The nearest airport is at Bari, Puglia, which is a 1 hour 10 minute drive. The amazing town of Matera, with it’s impressive cave dwellings, is 40 minutes’ drive. Houses in the historic centre needing some renovation can cost from €88,000. Apartments to renovate start at just €20,000.

Irsina, Matera – Fabio Boccuzzi / Shutterstock.com

Metaponto, Matera –  Population 1,000

Sea, nature and archaeology make Metaponto one of the most popular destinations in Basilicata. The town is split between the village, which was founded by Greek colonists, and the Metaponto Lido which consists of a mile of white sandy beach. A short distance from the modern village is located the archaeological area of Metaponto and its ruins, including the famous Tavole Palatine with the amazing Doric columns and the National Archaeological Museum of Metaponto.

Matera is 38 minutes away, Taranto 42 minutes, Brindisi airport 1 hour 20 minutes and Bari airport 1 hour 18 minutes. It also has a trainline to Taranto, where you can change for Brindisi. Apartments near the sea cost from €75,000, large villa from €250,000.

Make sure you get the best possible mortgage for your property by talking to your recommended Italian mortgage specialist.

Calabria region, southern Italy.

Pizzo, Vibo Valentia – Population 9,298

Pizzo, is a seaside town in the Vibo Valentia province of Calabria. The historic heart of the town is on a headland above the sea; newer properties are spread along the seashore in either direction. There are beaches nearby and Pizzo is both a busy ‘local’ town and a holiday destination. The famous tourist resort of Tropea is 49 minutes’ drive along the Costa degli Dei (‘Coast of the Gods’).

Pizzo has a historic castle and a pleasant town centre. A curiosity is the Chiesetta di Piedigrotta, a bizarre cave-chapel on the shore. There is a train station on the outside of town with trains running along the coast. The airport at Lamezia Terme is only 20 minutes drive. Apartments cost from €50,000, houses from €90,000.

Pizzo, Vibo Valentia

There are so many amazing villages and small towns in southern Italy. The best way to find the right one for you is to decide how far you want to be from an airport and a big town, then get in a car and go explore. Don’t judge a town by the residential streets on the outskirts, always park and walk to discover the historic centre and main piazza. It is here you will really get a feel for the village and the community.

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