Sicily’s New IRPEF Refund for New Residents: 50–60% Tax Relief for Foreign Nationals Moving to Italy
Summary: In April 2026, the Sicilian Regional Government introduced a three-year IRPEF refund scheme for individuals transferring their tax residence from abroad to Sicily. The benefit equals 50% of IRPEF actually paid, rising to 60% for moves to municipalities under 5,000 inhabitants, up to a ceiling of €100,000 per year per person. Legal basis: Art. 25, Sicilian Regional Stability Law 2026, implementing decree approved 9 April 2026. The measure applies to 2026–2028 and cannot be combined with other national relocation-based tax regimes. An Italian property purchase or qualifying renovation is a mandatory precondition.
What Is the Sicilian IRPEF Refund and Who Introduced It?
On 9 April 2026, the Sicilian Regional Government approved an implementing decree — signed by Regional Minister for Economy Alessandro Dagnino — activating Article 25 of the Sicilian Regional Stability Law for 2026. The measure establishes a direct regional contribution equivalent to a partial refund of IRPEF (Italy’s personal income tax) for individuals who relocate their fiscal domicile to Sicily from abroad.
The scheme is explicitly positioned as an anti-depopulation tool, designed to attract workers, entrepreneurs, digital nomads, pensioners, and returning emigrants. For foreign investors and expatriates, it represents a meaningful reduction in effective Italian income tax for the first three years of Sicilian residency.
Who Qualifies for the IRPEF Refund?
Eligibility criteria are set out in Article 25 and apply to individuals who meet all of the following conditions:
- Tax residence transferred from abroad to Sicily — not from another Italian region
- After the transfer, the individual must earn taxable income in Italy: employment, self-employment, business income, or Italian-source pension
- Purchase of a habitable property in Sicily (or qualifying renovation works) within 12 months of establishing fiscal domicile
- Tax residence and property ownership maintained until at least 31 December of the second year after the transfer — early exit voids the benefit and triggers recovery
- The refund cannot be combined with other national or regional relocation-based tax incentives (see compatibility note below)
Important — non-cumulation rule: Art. 25 explicitly excludes cumulation with other national or regional incentives aimed at attracting new residents. This means the Sicilian IRPEF refund cannot be combined with the “Impatriati” regime (Art. 5, D.Lgs. 209/2023 — 50–70% income exemption for inbound workers). Compatibility with the pensioner flat-tax regimes (7% substitute tax in southern municipalities) must also be assessed on a case-by-case basis. MG Law advises clients on optimal regime selection before any application is filed.
How Much Is the Refund? Amounts and Duration
| Municipality Type | Refund Rate | Annual Ceiling | Duration |
|---|---|---|---|
| All Sicilian municipalities (general) | 50% of IRPEF paid | €100,000 / year | 3 annual instalments (2026–2028) |
| Municipalities with < 5,000 inhabitants | 60% of IRPEF paid | €100,000 / year | 3 annual instalments (2026–2028) |
The refund applies to IRPEF actually due and fully paid by the beneficiary. The mechanism is ex post: the taxpayer first fulfils their tax obligations through the ordinary Italian payment process (F24 / Modello Redditi), then files an application to the Regional Department for Finance and Credit (Dipartimento Regionale delle Finanze e del Credito) to receive the regional contribution.
Who Should Act on This Measure? Four Target Profiles
How to Apply: Step-by-Step Process
The refund is not automatic. It requires a formal application to the regional authority after the relevant tax year has been finalized. The practical sequence:
- Legal assessment — Verify eligibility and confirm non-overlap with other incentives (Impatriati, pensioner flat-tax, etc.). MG Law conducts this analysis before any move is executed.
- Transfer of fiscal domicile to Sicily — File change of tax residence with the Agenzia delle Entrate. The effective date determines the year the right arises.
- Property acquisition or renovation — Purchase a habitable Sicilian property or execute qualifying building works within 12 months of establishing fiscal domicile. MG Law handles full real estate due diligence, Compromesso, and Rogito.
- Maintain residence and ownership — Hold both tax residence and property ownership through at least 31 December of the second year following the transfer year.
- File annual Italian tax return — Declare Italian-source income in the Modello Redditi. Pay IRPEF through standard channels (F24).
- Submit application for the regional refund — File with the Dipartimento Regionale delle Finanze e del Credito upon finalization of the relevant tax year. MG Law manages the full filing procedure.
How Does This Compare to Other Italian Relocation Incentives?
| Regime | Benefit | Duration | Combinable with Sicily Refund? |
|---|---|---|---|
| Sicily IRPEF Refund (Art. 25 / 2026) | 50–60% refund on IRPEF paid | 3 years (2026–2028) | — |
| Impatriati Regime (Art. 5, D.Lgs. 209/2023) | 50–70% income tax exemption | 5 years | ❌ Excluded |
| Pensioner Flat Tax — South Italy (Art. 24-ter TUIR) | 7% substitute tax on foreign pensions | Up to 10 years | ⚠️ Assess individually |
| Flat Tax for HNW New Residents (Art. 24-bis TUIR) | €100,000 annual substitute tax on foreign income | Up to 15 years | ⚠️ Assess individually |
Strategic note: For many profiles — particularly foreign pensioners and digital nomads — the Sicily IRPEF refund may be the most advantageous standalone option during the 2026–2028 window, especially combined with a property purchase in a small municipality (under 5,000 population) where the rate rises to 60%. The decisive variable is always the client’s income composition and whether existing incentive elections have already been made. MG Law conducts a quantitative scenario analysis before any regime election.
Why Legal Assistance Is Essential: MG Law’s Role
Three legal processes must be coordinated simultaneously to access this benefit correctly: Italian immigration and residency procedures, real estate acquisition due diligence, and tax regime election and annual compliance. An error or sequencing mistake in any one — including missing the 12-month property window or inadvertently electing an incompatible national regime — can void the entire three-year benefit and trigger administrative recovery proceedings.
MG Law manages all three tracks from a single point of contact, with offices in Palermo and Noto (Sicily) providing direct local presence for property and administrative matters, supported by tax specialists and multilingual counsels operating remotely worldwide.
- Eligibility assessment and regime comparison analysis before any decision
- Full real estate due diligence (Stato Legittimo, urban planning, cadastral checks, abusi edilizi) for Sicilian property acquisition
- Negotiation and drafting of Compromesso and Rogito with notaio coordination
- Transfer of fiscal domicile to Sicily — filings with Agenzia delle Entrate
- Annual Modello Redditi preparation and IRPEF compliance
- Application for the regional IRPEF refund to the Dipartimento Regionale
- Full remote management available — power of attorney, certified translations, apostilles
Legal Sources & References
Official Sicilian Region statement: regione.sicilia.it — IRPEF rimborso 50% nuovi residenti
Informazione Fiscale — technical analysis: informazionefiscale.it — rimborso IRPEF 50–60% Sicilia
La Sicilia press coverage: lasicilia.it — rimborso IRPEF al 50% per chi arriva nell’isola
Art. 25, Legge di Stabilità Regionale Siciliana 2026 · Decreto Assessore Dagnino, approvato 9 aprile 2026
Have questions about moving to Sicily and accessing this incentive?
MG Law’s tax and real estate specialists are available for a full eligibility and regime analysis — remotely, worldwide.
