Imagine two expat retirees, John and Paul. They earn the same: €80,000 a year from pensions and investments.
Both John and Paul move to Italy in 2026. John buys, for an impressively low price, a beautiful stone house in a Tuscan hill town.
After 1 year, John realizes he needs to pay a progressive income tax that climbs to 43% in the upper brackets, and starts to regret the move.
Paul, on the other side, buys a similar property about 500 kilometres southeast. More sunshine, even better beaches. His Italian tax bill? Just €5,600 a year.
Over ten years, the gap between those two men is a six-figure number. And that is not a loophole – it is all perfectly legal.
So where exactly is Paul living? He’s in Puglia. And Puglia isn’t the only place where this special 7% low tax regime is available. Seven other southern regions offer it too.
But Puglia gives you something many of the alternatives don’t: better infrastructure, spectacular beaches, and a much deeper expat network.
In this article you will discover why Puglia wants people like you, the pros, the cons — and the one thing about the low-tax regime almost every guide gets wrong.
Pro #1: Why Puglia Wants People Like You in the First Place
Nobody hands out a 7% tax rate out of generosity. Southern Italy has a people problem.
Young Italians leave for Milan, Munich, London. The ones who stay have fewer children. So towns shrink.
Ostuni is down more than 3,000 residents since 2002. Manduria had almost 32,000 people in 2001; it’s around 29,600 today.
That’s the reason Southern Italian regions implemented one of the most generous tax incentives in the entire Europe. Southern Italy is looking for retirees with foreign income, who spend locally, fill empty houses, and don’t compete for jobs.
The main incentive comes from Article 24 of Italy’s income tax code. It lets a foreign pensioner who moves to an eligible southern municipality pay a reduced flat 7% tax on all foreign-source income: dividends, capital gains, rental income from that flat you kept back home.
Another benefit is that you’re also exempt from Italy’s wealth taxes on foreign property and foreign financial assets. And this benefit is valid for 10 years (the year you move plus nine).
The conditions to qualify for this benefit are: you can’t have been an Italian tax resident in any of the previous five years, and you must come from a country with a tax cooperation agreement with Italy — the US, UK, Canada, Australia and all EU countries qualify.
The best part is that one of the strictest requirements was recently relaxed. Until recently, this incentive was valid only if you moved to towns with less than 20,000 inhabitants.
That often meant no hospital, no rail station, half the shops shut in January. You had to choose between the tax break and a town with services.
In April 2026 that changed. A new law replaced “20,000” with “30,000.” About 74 municipalities across the eight eligible regions walked into the regime overnight.
18 new cities in Puglia entered the list of those eligible for the tax breaks — the biggest jump of any region — including Ostuni, Putignano, and Conversano. These are cities with emergency departments, mainline stations, year-round commerce.
The trade-off didn’t disappear, but it relaxed most in Puglia, because Puglia’s mid-sized towns are unusually well served by southern standards.
This lower 7% tax is also valid for 7 other regions of Southern Italy – we already covered Sicily before. So which other region interests you more: Calabria, Sardinia, Campania, Basilicata, Abruzzo, or Molise? Let us know in the comments which region you would like to know more about, and we will cover it in a future article.
But what about the cost of living in Puglia? Well… I have more good news.
Pro #2: The Living Costs Are Still So Much Lower
The average asking price across Puglia is €1,291 per square metre — about $135 per square foot. The Italian national average is €1,903.
So prices are 32% cheaper in a region with 800 kilometres of coastline and better weather than most of the country.
Of course the costs are not the same in the entire Puglia, and this is an average. The Adriatic coast and the Valle d’Itria might cost two or three times more than inland country in the far south.
Concretely: €110,000, about $128,000, gets you a renovated, ready-to-move three-bedroom apartment in Galatina. That is pretty much the price of a Tesla Plaid or a BMW X5, and in this town, you get a nice home.
Then there are the running costs: property tax on a main residence is quite low. Condominium fees are also low. For both together, costs are still under €90 a month.
Bari, one of the most expensive cities in Puglia, is still way, way cheaper than major cities in Northern Italy.
But this bargain has an expiry date. Puglian coastal property prices increased 15.5% since 2022. And in the first half of 2026, Ostuni was the most-searched Italian municipality by foreign buyers.
The world began to notice this part of Italy, and the window is closing, but there is still time for you.
Pro #3: Puglian Infrastructure Is Better Than One Would Expect in Southern Italy
I’ve spent enough time in Italy to realize that sometimes “30 km away” means just 10 minutes, but in other situations it might mean 1 hour.
So I feel obligated to talk about the matter of connectivity, since this is especially important in Southern Italy.
Let’s talk about flights first. Puglia’s airports carried 11.5 million passengers in 2025, up 7%. Bari alone had almost 8 million.
And here is the headline for anyone with grandchildren in New Jersey: in May 2026, United launched a nonstop Newark–Bari service, four times a week. Puglia’s first scheduled transatlantic route.
If you prefer to fly to other parts of Europe, Bari and Brindisi have multiple low-cost flights to major cities like London, Paris, Frankfurt, Munich, Milan and Rome.
Roads are another plus. Puglia is mostly flat, so you will not have many winding roads like in Sicily or Campania.
The SS16 Adriatica is a dual carriageway — effectively a free motorway — from Bari through Polignano and Monopoli to Brindisi and Lecce. Journey times are short and, more importantly, predictable.
Rail is the one still under construction, but the direction is clear. In July 2026 a direct Frecciarossa — Trenitalia’s fastest train — started running from Lecce and Bari to Naples.
Bari to Naples in about three and a half hours, Lecce to Naples in under five, with no change.
When the full high-speed line is done, targeted for 2028, the goal is Bari–Naples in about two hours and Bari–Rome in about three.
Not everything is flowers, and as you know from my other articles, I always try to be honest about the bad sides, so I’ve picked the two cons of Puglia you should know.
But first, a quick note: I recently reviewed the entire Forbes 2026 list of the best places to retire abroad — 24 countries, 96 cities — including what they got very wrong. That review, plus our personalized matching algorithm for Europe and South America, is available to members on Patreon.
Con #1: 2 Months of Brutal Heat, a Thirsty Region, and Winter Ghost Towns
Puglia’s climate is a gift for eight or nine months of the year. For two or three, it’s only for those who love heat.
July and August routinely bring 35 to 40°C inland — that’s 95 to 104 Fahrenheit. Away from the coast, there is little sea breeze.
If your image of retirement is a long lunch in the shade, understand that in August the shade is also 38°C — 100 Fahrenheit.
Then there is the water issue: Puglia is one of the driest parts of Italy, and the water basins in the region are often in a poor state. So Puglia relies on regional water networks and on transfers from neighbouring Basilicata.
To be fair, the water scarcity in Puglia is not as bad as in Sicily. Still, drought is a real regional issue there, and worth thinking about when you’re choosing between a house with a cistern and one without.
Then there is the seasonality. Puglia was the most-desired domestic summer destination for Italians in 2026, and foreign arrivals are growing at double-digit rates.
In Polignano and Ostuni, that produces an August in which the historic centre is basically a theme park. Parking is impossible. Short-let conversion has hollowed out the year-round housing stock, and local prices climb.
And then comes the mirror image: a January in which the coastal towns empty, and a fair share of restaurants and services simply close until spring.
May and January are two completely different stories. So never buy in Puglia on one visit, but check it during completely different seasons.
Con #2: No English, Slow Paperwork, and a Car You Can’t Give Up
Let’s start with the language, because this is where a lot of “retire abroad” content is not honest with you.
English is spoken in Puglia’s tourist-facing businesses — the beach clubs, the fancier restaurants, the real estate agents who want your money.
But it is rarely spoken in everyday places: public offices, the police headquarters that handles your residence permit, etc.
Functional Italian is a must if you’re moving there rather than spending holidays there. I’ve been learning Italian for a year already, and that has been a big pleasure for me.
On my last trip to Italy, I talked to many locals about life, and even learned the rules of a game called Boccia. They didn’t switch to English to talk to me, first because they didn’t speak English, but also because they could understand my Italian! That’s the level you need before you move.
Speaking Italian, you will better handle the next con, which is the bureaucracy. Administrative processes in Italy are slow, document-heavy, and full of traps.
The classic one: your permesso di soggiorno — the residence permit — and your health registration can each appear to require the other. You go to office A, they send you to office B, and office B sends you back.
So expats often end up hiring a commercialista, an accountant who handles the tax and residence paperwork, and that costs a few thousand euros in the first year.
Finally, the car. In every one of the five towns we’ll cover, a car is a must. Regional trains are cheap but infrequent, and they don’t reach many parts of the countryside.
So Puglia is hot, crowded in season, monolingual and paperwork-heavy. But to be fair, so is most of the Mezzogiorno (the Italian South). So why Puglia, and not the others?
Why Not Tuscany, Sicily or Calabria?
Let’s compare Puglia against 3 very famous Italian regions among expat retirees.
Tuscany first, because it is the region that comes to mind when we talk about retirement in Italy.
Test one: taxes. The lower 7% income tax regime applies to 8 regions — Tuscany is NOT among them. Therefore you pay normal income tax there. That is why, in our example at the beginning, John pays much higher taxes than Paul. John lives in Tuscany.
Prices are also higher. The average home prices in Tuscany rose 18.2% since 2022, faster than Puglia’s 15.5%, and from a much higher base. Restoration rules in the protected centres are stricter, reducing the supply of homes.
And Tuscany is not as sunny or warm as Puglia. In fact, inland Tuscany can be quite cold and damp from November to March, and a stone house in the hills needs heating.
Where Tuscany still wins, and it does: depth of the international community, English-speaking professionals, cultural infrastructure, and an easier resale market at the top end.
We covered Tuscany in detail in a previous article.