The 7% Flat Tax Towns Are (Almost Certainly) Not Dropping Back to 20,000

To be honest, we don’t know if this article counts as a public service announcement or political analysis. We probably would not have written it at all, except that a number of readers have written in, and there is a fair bit of noise on social media. This all stems from a report that the 30,000-inhabitant limit for Italy’s 7% flat tax for foreign retirees will revert to 20,000 on 1 January 2027. Some of it has tipped into mild panic. Here is what is actually going on, and why we think you can breathe. DOWNLOAD THE FULL LIST OF 7% TAX TOWNS! Where the scare comes from First, the good news that started all this. In April 2026 Italy raised the population ceiling for its 7% regime from 20,000 to 30,000 across the eight southern regions, and a batch of towns qualified for the first time. Noto, Ostuni and the rest of the newly eligible list have been on our Town Explorer 7% filter since. The scare comes from a second, much bigger piece of legislation. Italy is consolidating forty years of income tax law into a single new code, D.Lgs. 117/2026, published in July and taking effect on…