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.
Sicily next. On the Health Ministry’s essential-levels-of-care scores, Puglia has 228 out of 300, tenth in Italy and the only southern region in the top ten. Sicily has 173, the second lowest among all regions.
Both Sicily and Puglia give you the lower tax rates, but they differ drastically if you happen to get sick.
The other advantage Puglia has over Sicily is that… Sicily is an island. Every trip to the rest of Italy means taking a ferry or a flight. The Messina bridge is still just a project, and the Palermo–Catania motorway has constant viaduct closures.
The next problem is the water. Sicilian networks lose about 52% of the water put into them, and the result is turnazione: your taps run only on some days. This affected large numbers of residents through 2024, 2025 and into 2026.
There is one thing, however, that Sicily wins against Puglia: connectivity. Sicilian airports like Palermo and Catania are much bigger than their Puglian counterparts.
So except for the better connectivity, Sicily does not have the same conveniences as Puglia.
There is still a third region that we can compare: Calabria. Here we also start by comparing healthcare infrastructure, which is, on average, better than Sicily, but still way, way below Puglia.
Differently from Sicily, however, Calabria has even worse connectivity. The biggest Calabrian airport is Lamezia Terme, which is smaller than both the Bari and Brindisi airports in Puglia.
Roads there are more difficult. Calabria is very mountainous, and the Ionian coastal roads are accident-prone single roads that have been “under upgrade” for decades.
A hospital 40 kilometres away in Calabria can be more than an hour away. In the Puglian flatlands, the same 40 kilometres means thirty-five minutes.
Where Calabria wins: it has cheaper property — in fact, much cheaper properties than Puglia. It also has splendid beaches, matching Puglia’s 27 Blue Flag beaches in 2026.
Now you know Puglia wins the comparison.
So which cities in Puglia are the best? We found five candidates, all of them eligible for the lower tax regime. We will start from the good, up to the best.
Town #1: Galatina
If you want to live in everyday Italy, where nothing is staged for tourists, this is the place.
It is located on the central Salento plain, about 20 kilometres (12 miles) south of Lecce, and 20 to 25 kilometres from both coasts. The population is around 25,000 people.
Prices are very low. The median is €992 per square metre, about $100 per square foot, and a median apartment sells for around €81,000, or about $92,000.
House prices did jump 18.1% in twelve months, but that’s a thin market coming off a very low base.
Healthcare is a strength. Galatina has its own hospital, the Santa Caterina Novella, with a 24-hour emergency department. And within 40 kilometres you have the Vito Fazzi in Lecce, the province’s top-tier emergency hospital.
It is a city with a well-preserved downtown and is quite clean by Southern standards.
The downsides: no sea view, a flat agricultural landscape some find monotonous, hot inland summers with no coastal breeze, and almost no English-speaking community.
Town #2: Manduria
Manduria has close to 29,600 people. It is near the Ionian coast, about 10 kilometres from the beaches at San Pietro in Bevagna and 35 kilometres east of Taranto.
It is the birthplace of a famous wine variety, the Primitivo di Manduria, which became part of the town’s identity.
In terms of price, the median is €1,203 per square metre, about $125 per square foot, with a median apartment sale near €104,000, or about $118,000.
That’s less than half of what you’ll pay in many coastal cities in Southern Italy, and in Manduria you have two coasts within reach.
On the negative side, healthcare infrastructure is below average. Manduria has the Marianna Giannuzzi hospital, with a 24-hour emergency department, cardiology, intensive care and oncology.
On paper, it sounds good. In practice, the Giannuzzi has a documented history of staffing shortages, including incidents of the emergency department running with a single doctor on duty.
The health authority is responding: about €5.6 million of structural works and a redesign of the emergency pathways, approved in 2025. But complex care still means Taranto or Lecce, 35 to 55 kilometres away.
Manduria is for the value hunters who want two coasts and a real town around them. It is among the cities that became newly eligible for the special lower tax regime, so it will likely attract many eyes in the coming months.
Town #3: Locorotondo
This is that famous town on a hilltop in the heart of the Valle d’Itria, the country of trulli, the cone-roofed stone huts.
It’s the smallest of the five towns we selected, with just 14,000 residents. It is inland, but also very close to the sea, just 25 kilometres from the beaches of Monopoli.
Prices are below Italian averages: €1,826 per square metre, about $190 per square foot, with a median apartment sale around €166,000, or about $188,000.
Healthcare is better than you’d expect for a town this size. There’s no hospital in the town, but the Valle d’Itria hospital in Martina Franca is just 9 km away, with a 24-hour emergency department, intensive care and cardiology.
One detail: it’s in a different province, under the Taranto health authority rather than Bari.
Connectivity is the weakness. Bari airport is 75 kilometres away, which means more than 1 hour by road. The local trains are slow and rare. This is a car town.
Despite all that, this is probably the most serene and tranquil of the five towns I will show you.
Town #4: Polignano a Mare
This town sits on a limestone cliff straight above the Adriatic Sea, 33 kilometres southeast of Bari, and has 17,000 people.
It’s the most expensive town on our list: €2,780 per square metre — still way below the €3,000 or more per square metre in coastal cities of Campania.
So why is Polignano on this list despite the price? First, because of healthcare. The town has no hospital of its own, but in June 2026, the new Monopoli–Fasano hospital became fully operational about 15 kilometres away.
Behind that sit Bari’s big hospitals, about 40 kilometres away: the Policlinico university hospital and the Giovanni Paolo II cancer institute. No other town on our list has this much high-level medicine within 45 minutes.
Trains from Bari to Polignano a Mare are very frequent and very cheap — prices are just 4 euros, and the trip takes from 20 to 40 minutes.
Just be aware that seasonality is extreme there. Beaches and the historic centre in August are among the most congested places in Puglia. Polignano is beautiful, but not for someone too averse to summer crowds.
And a detail worth knowing: only 3.6% of residents are foreign, and most of them are Georgian and Bangladeshi, not retired Brits and Americans. Don’t expect a ready-made expat circle.
Now, the last town, and likely the best of the 5.
Town #5: Ostuni
The città bianca — the white city — stands on a hill at 218 metres, seven kilometres from a 20-kilometre stretch of Adriatic coast.
Population in January 2026: 29,803 residents. Foreign residents: 5.3%, the highest share of the five.
It’s also the only town on our list with everything at once: a hospital in town, a mainline station, an airport under 40 minutes, and an established expat community.
The hospital is a small one with a 24-hour emergency department, rebuilt in 2025. For bigger cases, the Perrino in Brindisi, the second-level emergency hospital, is about 37 kilometres away.
Brindisi airport is 35 minutes away. And it is very well connected by railway.
All of that comes at a price. Ostuni costs almost €2,500 per square metre, about $260 per square foot, and seaside second homes go for €3,625, so two and a half times the regional average prices.
And remember, it was the most-searched Italian town by foreign buyers in the first half of 2026. Ostuni is for someone looking for quality of life for a slightly higher price.
But there is still ONE thing you must also have in mind. Ostuni became eligible for the lower tax regime only in April 2026, when the old 20,000-resident limit was raised to 30,000.
But even under the new ceiling, its margin is just 197 people. If the city grows by 200 residents, it is no longer eligible for the special 7% tax regime.
The good news is that once you qualify for the regime, you’re in for the full ten years, even if during this period Ostuni grows above 30,000 residents.
Fortunately (or unfortunately, depending on the perspective), Ostuni’s population trend is downward, which will probably keep it eligible to offer the special lower tax regime.
Now, these are the best places to retire in Puglia if you want to pay lower taxes. But we also ranked ALL the best cities to retire in Europe in one of our most ambitious projects ever.
Join us on Patreon for detailed reports on all the countries we covered, plus access to our algorithm that will help you discover the best country and city for you.
Levi Borba is the founder of expatriateconsultancy.com, creator of the YouTube channel The Expat, and a best-selling author. Some of the links in our articles may be affiliated links, meaning the author earns a small commission if you make a purchase.
