New tax incentive for individuals moving their residence from abroad to Sicily: reimbursement of up to 60% of IRPEF
Article 25 of Sicily Regional Law No. 1 of 5 January 2026, entitled “Measures to attract new residents”, introduced a specific incentive for individuals who transfer their residence from abroad to Italy and establish their tax domicile in the territory of the Sicilian Region.
The measure, implemented by Regional Decree No. 30 of 19 May 2026 issued by the Sicilian Department for the Economy, together with subsequent implementing provisions, provides for a contribution calculated by reference to the Italian personal income tax (IRPEF) due and fully paid. The ordinary contribution is equal to 50% of the relevant IRPEF and may increase to 60% where certain conditions are met.
The measure applies to transfers carried out during the 2026-2028 three-year period and is conditional not only on acquiring Italian tax residence and establishing a tax domicile in Sicily, but also on making a real estate investment in the Region.
1. Personal and income requirements
The first requirement is the acquisition of Italian tax residence under Article 2 of Presidential Decree No. 917 of 22 December 1986 (the Italian Income Tax Code, or TUIR) by an individual who was previously resident abroad. The express reference to Article 2 TUIR means that tax residence must be assessed under national tax rules, without the regional legislation introducing an autonomous definition for the purposes of the benefit.
Under Article 2 TUIR, individuals are considered tax resident in Italy if, for most of the tax period, taking fractions of a day into account, they have their civil-law residence or domicile in Italy, or are physically present in Italy. Registration with the Resident Population Register (APR) also creates a rebuttable presumption of residence.
Acquisition of Italian tax residence must be accompanied by the establishment of the taxpayer’s tax domicile in Sicily. The measure does not impose a nationality requirement and may therefore apply both to Italian citizens previously resident abroad and to foreign nationals who become tax resident in Italy.
As regards income, Article 3 of Regional Decree No. 30/2026 includes among the eligibility requirements the receipt, after the transfer, of employment income, employment-equivalent income and pensions falling within Article 49(2)(a) TUIR, taxable in Italy.
The legislation also contains specific provisions concerning self-employment and business income. In particular, Article 6(2) of the same Regional Decree expressly contemplates a request for the contribution also in relation to IRPEF accrued on such income.
The coordination between the two provisions is not entirely straightforward. While Article 3 limits the categories of income relevant to eligibility, Article 6 appears to allow, once the eligibility requirement has been met, IRPEF relating to self-employment or business income to be taken into account as well. The precise scope of the qualifying tax base will therefore require particular care in practice.
2. Real estate investment and maintenance requirements
Italian tax residence and a Sicilian tax domicile are not sufficient on their own. Within twelve months from establishing the tax domicile in Sicily, the beneficiary must purchase a property located in the Region or carry out qualifying building works on a property already owned.
No minimum investment threshold is provided. The rules establish neither a minimum purchase price for the property nor a minimum amount of expenditure for the building works. The real estate investment is therefore an autonomous condition for access to the contribution.
The measure also imposes specific maintenance requirements. Residence and tax domicile in Sicily, as well as ownership of the property, must be maintained until 31 December of the second year following the year in which residence is transferred. The requirement therefore covers both the personal conditions and continued ownership of the property for the full period prescribed by the rules.
Failure to comply is expressly regulated: breach of the maintenance requirement results in revocation of the contribution and an obligation to repay the amounts received. The required duration of residence, tax domicile and ownership is therefore an important factor to consider from the planning stage of the relocation.
3. Amount and duration of the contribution
The contribution is granted for three years, starting from the year in which the conditions laid down by the legislation are met. As a general rule, it is equal to 50% of the IRPEF due and fully paid on the basis of the income tax returns for the relevant tax years.
A maximum annual contribution of EUR 100,000 applies. This amount is not an income threshold but a cap on the benefit that may be granted. The theoretical maximum contribution over the full three-year period is therefore EUR 300,000.
According to the example provided by the Sicilian Region, where EUR 100,000 of IRPEF has been paid, the contribution may amount to EUR 50,000, while EUR 29,000 remains allocated to the Italian State and EUR 21,000 to the Sicilian Region. If the same relevant amount of IRPEF arises in each of the three tax years, the aggregate contribution may therefore reach EUR 150,000.
The contribution rises to 60% where the purchase of the property or the qualifying building works, together with the transfer of the tax domicile, take place in a Sicilian municipality with fewer than 5,000 inhabitants. The annual cap of EUR 100,000 continues to apply. For this purpose, the relevant population figure is the resident population as at 31 December of the year preceding the transfer of the tax domicile, based on ISTAT data.
4. Procedure for obtaining the contribution
The benefit is conditional on filing a specific application. The interested person must submit the prescribed “Application for Recognition” no later than 31 December of the year following the relevant tax year, failing which the benefit is forfeited. A separate application must be filed for each year in which the contribution is claimed.
The application must be accompanied by evidence that the conditions are met, including residence and tax domicile in Sicily, the real estate investment, filing of the income tax return and full payment of the IRPEF assessed. The required documentation includes, among other items, the notarised deed of purchase, evidence relating to qualifying building works, a copy of the income tax return and proof of payment.
The applicant must also undertake to notify the competent Department of subsequent events that may result in the loss of entitlement or a reduction in the amount of the contribution. Such events include failure to maintain the relevant conditions, a total or partial refund of IRPEF paid and the filing of amended tax returns resulting in a lower tax liability.
The contribution may be paid by direct credit or, at the beneficiary’s request, in the form of a tax credit available for offset. The measure therefore does not reduce the IRPEF due at source: the tax must first be declared and fully paid, and the contribution is recognised only afterwards.
5. Coordination with other tax regimes for new residents
A further issue concerns coordination with other Italian measures designed to encourage the transfer of tax residence to Italy. The regional rules impose limits on combining this benefit with other national or regional tax incentives aimed at attracting new residents.
For employees and, subject to the interpretative issues discussed above, certain self-employed individuals, the inbound workers regime under Article 5 of Legislative Decree No. 209/2023 may be relevant. Individuals with foreign-source income may instead need to consider the new residents regime under Article 24-bis TUIR, while recipients of foreign pensions may fall within the regime provided for by Article 24-ter TUIR.
The Sicilian incentive must therefore be assessed together with any other potentially applicable regimes, taking into account the nature and source of the taxpayer’s income, previous tax residence, the municipality chosen for relocation and the planned real estate investment.
6. Conclusions
Article 25 of Sicily Regional Law No. 1/2026 introduces a new measure aimed at attracting individuals resident abroad. The incentive takes the form of a contribution calculated by reference to IRPEF due and fully paid and is conditional on a real estate investment in Sicily.
The measure differs structurally from the main national tax regimes for new residents. It does not directly alter the calculation of IRPEF but operates after payment of the tax by granting a regional contribution generally equal to 50% of the tax and, in the cases specified by the legislation, 60%.
Access to the incentive nevertheless requires a comprehensive assessment of the relevant conditions, with particular regard to the acquisition of tax residence under Article 2 TUIR, the categories of qualifying income, the real estate investment and the maintenance requirements. These issues are accompanied by annual procedural obligations and by the need to coordinate the regional measure with any other tax incentives that may apply to the move to Italy.
INTERNATIONAL DESK Considering relocating your residence to Italy? RCLex’s International Desk assists Italian and international clients with the tax and legal aspects of moving to Italy, coordinating with foreign professionals and assessing the incentives that may apply. |
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