For those of you who read my last Ezine you will be happy to know that I got my wellies for Christmas and also a more than welcome surprise of a toolbelt. I feel complete! I have been putting both to good use in the last week (seeing as though we have a good weather spell), by doing some early morning ‘potatura‘ of the olive trees.
Financial life in Italy 2026
By Gareth Horsfall
This article is published on: 22nd January 2026
I thought I would have a go myself this year since the chap who came last year hasn’t committed and it appears to be quite hard to find people in the area who are not already booked up. So, I thought I would give it a try after reading a few books, speaking with numerous people about it and watching far too many Youtube videos on the subject.
I am quickly realising how obsessive one can become when you are pruning olive trees, regarding correct shape, removing too much or too little and wondering whether the tree is growing too high, how to train it further down, whether to cut this branch or the other one. It’s quite therapeutic actually although it appears to be rather arbitary because we have no idea where the olives will produce, how many, and if environmental factors will affect production this year. However, as my 7.30am to 9 am morning routine (when not travelling) it is a good way to start the day.
Anyway, for my readers who have been doing this for many years, I will let you be the judges. See some fotos below. (Feel free to send comments about where I might be going wrong).
Moving on from land work I wanted to send this brief Ezine out just to reconnect in the New Year. 2025 proved to be a positive year for our investment accounts and it is anyone’s guess what is in store for 2026.
I am attending the Spectrum IFA Group annual conference from the 26th to 30th January and will be doing my usual round-up Ezine when I get back. We will be speaking with Rathbones Asset Management, Evelyn Partners, Prudential, New Horizon Asset Management, LGT Wealth Management and others as well.
But, before I return (hopefully Greenland will still be a part of Europe by then) I wanted to share some information on Italy with you, as a light hearted read.
On Facebook I follow a page called Dataroom di Milena Gabanelli. You may know of her from the programme ‘Report’, which is where I first became familiar with her around 15 years ago. Now she works for Corriere della Sera and has her own FB channel. It’s very interesting as they regularly put out content about Italy and global events but backed up with solid facts.
The most recent one I saw was ‘Chi paga meno tasse’. A look at the health system and exactly where tax revenue is coming from to support the system itself.
The following is summary of the video, which is only a few minutes long, but provides some quite interesting information, which I wanted to share with you.
(The data is taken from studies of contributi previdenziali relative dichiarazione 2023.)
Did you know that 76% of taxpayers in Italy declare less than €29000 gross per annum.
This group do not pay towards the health service because they are exempt. Their income is below the threshold set by the Italian government. (The ticket)
9% of taxpayers in Italy declare between €29000 and €35000 gross p.a.
This group pays for health expenses but not for welfare (pensions and schools!).
Only 15% declare over €35000pa.
This group contributes to both the health system and the welfare. They pay for the majority.
Let’s analyse things a little further
With an income of €29000 gross pa there is likely to be very little margin to pay your health care expenses. In this category fall many ‘pensionati and dipendenti’ and so we can exclude them for the purposes of the analysis.
The rest are autonomi ( self-employed people- like myself)
- 1.8 million autonomi in Italy are on the flat tax regime and so cannot be considered.
- 2.2 million autonomi pay IRPEF (normal income tax rates) and of these 1.3 million declare income under €29000pa. This means that they pay €2 billion in tax or ONLY 8% of the whole category for the autonomi.
To analyse further to see whether any of these people have a real need or if they are working in nero, we can look to the index ISA which looks at fiscal ability to pay. They work on a points based system and if a contribuente has under 8 points then there is the risk of fiscal evasion.
Tax Evasion vs Tax Avoidance
Here we have some interesting facts:
- 78% of restaurants declare less then €28000pa gross
- 70% mechanics under €20700 pa gross
- 60% alimentari under €10700 pa gross
- 48% hairdressers under €11900 pa gross and also 45% of balneari
Anyone who is declaring less than they actually bring in is also paying less contributions towards the health service and also they will receive less pension, which means that the people who are paying will have to pick up the bill.
The Agenzia delle Entrate are not funded well enough, even though they have some interesting tools at their disposal, and can do controls on only 4.5% of people / businesses annually.
It’s no surprise that the Italian government really doesn’t have much, if any, room for manoeuvre to change tax rates and why the health service is underfunded.
Short term rentals
If you like those facts you may also like the following ones about the explosion in short term rentals in Italy (affitti brevi), which go some way to explain why many cities and famous locations in Italy are now almost impossible to visit without a tremendous amount of people all doing the same.
- In 2011 short term rental advertisements didn’t exceed 20000 in the whole of Italy
- In 2021 this number had exploded to 620000
- In 2022 to 644000
- and 2023 to 700,000 which equates to approximately 11 billion euro invoiced a year
In the market of short-term rentals Italia is No 3 in the world behind the France and the USA!
If we analyse some of this data then we can see that 75% of these rentals are in the hands of private landlords and 25% managed by agencies.
Agencies, in general, retain 35% of the income to manage the cleaning and change of sheets etc. Almost all of the advertisements are now on the digital platforms like AirBnb and Booking.com, who in general keep between 14 and 18% of the income. The same platforms have been obliged since 2017 to apply a withholding tax of 21% on gross income.
In the Legge di Bilancio 2026 this withholding tax of 21% now applies to the first property. For the second a witholding tax of 26% and for owners of 3 properties or more, they are now deemed to be a business activity and must open a partita IVA (VAT position). The war on private landlords continues, not just here in Italy but across many countries, but whether it will make much difference in the long run is anyone’s guess.
If you have enjoyed this information so far, then I will leave you with the world of Italian politicians and how they are paid (c/o Dataroom di Milena Gabanelli)
They are paid well because they should, in theory, not be corruptible and should work in the interests of the country.
An Italian politician is entitled to a number of benefits, ranging from:
Indennità parlamentare, which is a compensation payment for being a politician and spending time away from home. It is currently €10435pm Gross or €5000-5300 pm after taxes and contributi.
Diara (per deputati e senatori) – just €3500pm
+ Expenses reimbursement.
These do not always have to be documented!!!!
They also qualify for reimbursement of travel expenses
And reimbursement of telephone expenses
Pensions
The same politicians are entitled to a pension after only 5 years of working in Parliament. (versus 20 years for the rest of us!)
Interest payments
They are also entitled to an interest rate of 5.4% on the money in their savings and current accounts. The bank pays this automatically versus the average rate for us , at about
0.2 %
And on that note I will leave it there. This Ezine was really was meant to be a light-hearted way of staying in touch.
I will be following this up from our conference with a market review from the week after next, followed by some other Ezines on tax and also organising your affairs for your loved ones.