In April 2026 Italy made its 7% flat tax more generous. The tax had always been limited to southern towns of no more than 20,000 residents. That limit went up to 30,000. Three months later the government published a rewritten version of Italy's entire income tax code, taking over on 1 January 2027. In the part of the new code that carries the retirement tax forward, the limit appears to read 20,000 again. Read literally, the wider limit lasts nine months and then vanishes by accident.
Our colleague and co-author Marco Mesina, in his review of the new law, noticed the discrepancy and notified us of the potential impact.
People have already moved on the strength of the April change. Houses have been bought, leases signed, residence registered and schools chosen, all on the basis of a rule that was law when the decision was made and is still law today. You cannot undo a move at a filing deadline. If you picked your town from our map of eligible comuni and it falls in the band that opened in April, that is the band now in question.
How the limit could disappear by accident
The April change was small in form. It did not write a new rule. It changed one number inside an existing article of the tax code.1
The new code switches off the first 191 articles of the old one from 1 January 2027.2 The retirement tax is one of them. Once the old article is switched off, the April change has nothing left to change. From 2027, the only place the rule lives is the matching article of the new code.3 If that article says 20,000, then nothing in Italian law says 30,000.
The new code does say that references to the old articles should be read as references to the new ones.4 That fixes cross-references. It does not change the number printed in the new article.
The dates explain how this happened. The cabinet approved the draft of the new code on 18 February 2026. The higher limit took effect on 7 April 2026. The final version was signed off on 4 June 2026, two months later. The draft was written before the change and approved after it. Nothing suggests anyone meant to reverse it.
Why it will probably be fixed
Parliament asked the government to gather existing tax law into one organised text, not to change it.5 A tidying-up job is not understood to carry the power to alter the rules. Where its wording differs from the rule it was meant to copy, the difference is treated as a mistake, and the original rule wins. If the difference were treated as a real change instead, the government would have gone further than Parliament allowed, which can be challenged.6
Both arguments favour you. Neither works on its own. Someone has to raise them, and usually that means a dispute with the tax authorities.
Who is affected
The 7% election covers the year you move plus the next nine.7 If it starts in 2026, that runs to 2035 and crosses the changeover. Four situations behave differently, and the second is the one nobody can answer yet.
You moved before July 2026, to a town of 20,001 to 30,000. The strongest position. You are an Italian tax resident for 2026, so you make your election in the 2026 return and it takes effect from 2026, while the higher limit is unquestionably the law. Italian law also protects taxpayers who act in good faith on the rules as published.8 You are the group Parliament is least likely to want to disturb.
You moved, or are moving, in the second half of 2026, to a town of 20,001 to 30,000. This is an open question, and it is worse than it looks. To count as an Italian tax resident for a year you have to be here for the greater part of it.9 Arrive in September and you are not resident for 2026. You become resident in 2027, you make your election in the 2027 return, and the regime starts on 1 January 2027.
So you bought the house, registered with the anagrafe and moved your life while the limit was 30,000, but the text that governs your election is the one that takes over on 1 January 2027. Registering with the anagrafe during 2026 does not fix this. Enrolment only counts if it runs for most of the year, and even then it is only a presumption that can be rebutted.
There is a further oddity. Your town's population is measured on the figure at 1 January of the year before your regime starts, so 1 January 2026.10 A 2026 population figure, judged against a 2027 rule.
Whether your position should be judged by the law you relied on when you moved, or by the law in force when your regime starts, has no official answer. Nobody has ruled on it, because until now the limit had never moved mid-stream.
You are already in the regime and want to move to a larger town after 1 January 2027. The weakest position. You have nothing already established to defend. The rules do let you move to another qualifying town during your ten years,11 but whether the new town qualifies is exactly the disputed point.
You are arriving in 2027 or later. You would be choosing a town against a text that may not support the choice.
One more unknown sits over all of this. The regime stops if its conditions stop being met.12 Whether the town size is tested once when you join, or again every year, has never mattered, because the limit never moved. Now it has.
A smaller point, for completeness: the April change never said when it starts to apply, so if you arrived in the first three months of 2026 there is a fair argument either way about which limit is yours.13 For how your pension and social security are taxed once you are inside the regime, see our guide to foreign pensions in Italy.
What this means for you now
Nothing has changed yet. The higher limit is the law today and stays the law through 31 December 2026. What follows is about protecting your position, not changing your life.
Check which side of 20,000 your town sits on. Only 20,001 to 30,000 is caught by this. Two things surprise people. The test runs on the official figure at 1 January of the year before your regime starts, not on today's population, so later growth or decline does not change your answer.10 And it counts the whole comune including outlying frazioni, which runs higher than the town centre suggests.
Do not move house over this. If you chose a town of 20,001 to 30,000, you had your reasons, and they have not gone away. Moving again to a smaller town would remove a legal question and replace it with a life you did not choose. That is a bad trade. The only case worth a thought is if you are still browsing and genuinely torn between two towns you like equally, one on each side of 20,000.
If you are arriving later in 2026, understand that your regime starts in 2027. There is no longer a way into the 2026 tax year. That is not a reason to delay, but it does put you in the open question above rather than in the safe group, so go in with your eyes open. If you are still weighing the timing of your move, our guide to timing a move to Italy without crashing your retirement walks through how the year you arrive drives everything.
Keep the evidence of when you decided. The purchase or the lease, the residence registration, the date you first took advice. If this ever has to be argued, the fact that you committed while the higher limit was in force is the most useful thing in your file.
If you are already in the regime and eyeing a bigger town, pause that one. A move after 1 January 2027 into a town of 20,001 to 30,000 is the weakest position of all.
There is also a formal route to get a written answer from the Agenzia delle Entrate (AdE), the Italian revenue agency, about one taxpayer's specific facts. It is not right for everyone. Ask us whether it makes sense in your case. Because so much of this turns on being an Italian tax resident for the right year, our definitive guide to U.S.-Italy tax residency is the place to start on the residency test itself.
If you hold Italian citizenship, contact your representatives
This is the kind of problem that gets fixed when someone points it out. It is not a political argument. Parliament raised the limit itself in March 2026, and there is no sign anyone wanted to undo it. What is missing is attention before 1 January 2027.
If you are an Italian citizen living abroad and registered with AIRE, the register of Italians resident abroad, you have representatives in Rome whose job includes exactly this. Italians abroad vote in a separate overseas constituency, which returns eight deputies and four senators. North and Central America accounts for two deputies and one senator.14
- Find your representatives and their official email addresses on camera.it and senato.it. Members elected for the overseas constituency are listed as such. The finance committees of both chambers handle tax bills and are worth copying.
- Be specific. A short message naming the article of the new code, the old article it replaced and the March 2026 law that raised the limit is far more useful to a parliamentary office than a general complaint. The details are in the notes below, and you are welcome to copy them.
- Say plainly what you want. Not a new benefit. Just that the figure of 30,000 be restored in the text that takes effect on 1 January 2027.
- If you moved because of the higher limit, say so, and say when. That is what turns this from an abstract drafting point into a real case.
What happens next
The likely fix is a correcting decree. The government has already issued several as part of this reform, and there are five months before the new code takes effect. The alternative is official guidance confirming that a tidying-up exercise cannot change the rule and that the higher limit stands. Either would settle it cleanly, and the people who have already moved are the best reason to settle it early rather than argue it one household at a time.
Until then, treat the question as open. We are watching for the fix and will update this page when there is one.
Is your town on the wrong side of the line?
Book a free consultation. We will tell you which of the four positions you are in, help you preserve the evidence that protects you, and watch for the fix so you do not have to.
Book a Free Consultation →Sources & Legal References
- Art. 26 co. 1, L. 11 marzo 2026 n. 34 (legge annuale sulle piccole e medie imprese), in GU 23.3.2026 n. 68, in force 7.4.2026, amending art. 24-ter co. 1 of DPR 22.12.1986 n. 917. The consolidated text of art. 24-ter co. 1 now reads "avente comunque una popolazione non superiore a 30.000 abitanti". The 3,000-resident limit for the comuni listed in Allegati 1, 2 and 2-bis to DL 17.10.2016 n. 189 and for the comuni affected by the 6 April 2009 earthquake is unchanged. ↩
- DLgs 19 giugno 2026 n. 117, "Testo unico delle disposizioni legislative in materia di imposte sui redditi", in GU Serie Generale n. 152 of 3.7.2026, Suppl. Ordinario n. 26. The decree came into force on 4.7.2026; the annexed testo unico, comprising 377 articles in four Parts with nine allegati, applies from 1.1.2027 under art. 377 ("Decorrenza"). Art. 376 co. 1 lett. e) abrogates artt. 1-191 of DPR 917/1986, which includes art. 24-ter, from the date in art. 377. ↩
- Art. 247 of the testo unico annexed to DLgs 117/2026, the successor to art. 24-ter of DPR 917/1986. It sits in Parte II ("Regime speciale"), Titolo I, Capo XXIV, "Opzioni per le imposte sostitutive sui redditi delle persone fisiche che trasferiscono la propria residenza fiscale nel territorio dello Stato". ↩
- Art. 376 co. 2 of the testo unico annexed to DLgs 117/2026. ↩
- Art. 21 co. 1, L. 9 agosto 2023 n. 111, as extended by L. 8 agosto 2024 n. 122 and amended by L. 8 agosto 2025 n. 120: delega for the "riordino organico delle disposizioni che regolano il sistema tributario" by means of testi unici. ↩
- Art. 76 Cost. ↩
- Art. 24-ter co. 4 and co. 5, DPR 917/1986: the election is made in the tax return for the tax period in which residence is transferred, takes effect from that period, and is valid for the first nine tax periods following the one in which it becomes effective. ↩
- Art. 10 co. 1, L. 27 luglio 2000 n. 212 (Statuto dei diritti del contribuente): relations between taxpayer and administration are governed by the principles of collaboration and good faith. ↩
- Art. 2 co. 2, DPR 917/1986, as replaced by DLgs 27.12.2023 n. 209 with effect from 1.1.2024: residents are those who "per la maggior parte del periodo d'imposta, considerando anche le frazioni di giorno, hanno la residenza ai sensi del codice civile o il domicilio nel territorio dello Stato ovvero sono ivi presenti", with enrolment in the anagrafe della popolazione residente for the greater part of the tax period operating as a rebuttable presumption. Art. 24-ter co. 1 requires transfer of residence "ai sensi dell'articolo 2, comma 2". ↩
- Provv. Agenzia delle Entrate 31.5.2019 n. 167878: population determined on ISTAT data at 1 January of the year preceding the year in which the option takes effect. ↩ ↩
- Provv. Agenzia delle Entrate 31.5.2019 n. 167878; circ. Agenzia delle Entrate 17.7.2020 n. 21. ↩
- Art. 24-ter co. 7, DPR 917/1986: "Gli effetti dell'opzione non si producono laddove sia accertata l'insussistenza dei requisiti previsti dal presente articolo, ovvero cessano al venir meno dei medesimi requisiti." ↩
- L. 34/2026 contains no provision on when the art. 26 co. 1 amendment starts to apply. The competing readings turn on whether the relevant date is the acquisition of Italian tax residence for the 2026 tax period under art. 2 of DPR 917/1986, or the transfer of habitual residence under art. 43 c.c. ↩
- The Circoscrizione Estero returns 8 deputati and 4 senatori across four geographic ripartizioni, of which North and Central America is allocated 2 deputati and 1 senatore. A reform of the overseas constituency was under parliamentary discussion in July 2026, so the current allocation should be checked before relying on it. ↩
The information in this article is provided for general informational purposes only and does not constitute financial, legal, tax, or accounting advice. Any opinions expressed are solely those of the author and do not necessarily reflect the views of JSBC. You should not act or refrain from acting on the basis of this content without first seeking the advice of a qualified professional regarding your particular circumstances.