For those wishing to retire in Italy.

I would add that anyone seriously interested should have at the least an intermediate understanding of Italian.
One has to interact with the surrounding society to have a satisying existence. Some travelers seem to misjudge the language need when they have mostly visited the tourist centers. Dealing with ordinary living arrangements in another language is not to be taken lightly.

Does that mean that Italy would tax you 7% on retirement distributions or anything you would use to live in their country, on top of being taxed in the US on that income as well, at whatever rate?

Yes, though there's a treaty with the US which avoids double taxation, though you still end up paying the higher rate. However, that's only one aspect of the tax complex. https://m.taxesforexpats.com/italy/us-tax-preparation-in-italy.html

Mike, true words about needing some degree of fluency. Even in a big city like Rome, you cannot expect every bank, office, utility, service person will speak a English well or at all. Try negotiating with an Italian bank over a lost debit card. 😖

Roberto, thanks for posting. Getting a tax advisor who understands both the Italian and American tax laws is imperative.

Jay -- my taxing info is a little dated but I believe that you would pay the 7% locally but then would receive a tax credit on any tax owed to the US. I hold some foreign bonds that tax is withheld at distribution but I get that as a tax credit against my US taxes. And it is only fair you pay taxes in Italy since you are using their services.

Jay -- my taxing info is a little dated but I believe that you would
pay the 7% locally but then would receive a tax credit on any tax owed
to the US. I hold some foreign bonds that tax is withheld at
distribution but I get that as a tax credit against my US taxes. And
it is only fair you pay taxes in Italy since you are using their
services.

So, in the end the bottom line would be the same as what Boston Mike states. If my distributions/income/whatever is taxed in the US at 25%, when I'm in Italy I pay the 7% also but can take that 7% as a credit against what I pay to the US, making the final tally 18% + 7%, or 25%. Ay-yi-yi. Guess I won't be hermitizing myself in a Sicilian cave anytime soon... :)

Can't remember if I got this link from Roberto or even on this forum--this immobiliare.it site shows up-to-date real estate prices per region, which I think is fascinating.

https://www.immobiliare.it/prezzi-mq/?fbclid=IwAR0jCcvN39ocy6HSV3j1sr-LUyOVaApeyFkfbC-3PS1RCx5n7UF-58HMkUo

My American buddy's going through the channels to buy some property in Ascoli Piceno in Le Marche to eventually retire, and even though it's northern Italy, the price is quite reasonable for what he's getting.

Jay and Mike are correct. Unlike the rest of governments around the world, Uncle Sam wants your money even if you don’t live, or have never lived in the US. I’m sure you heard the story of former Mayor of London, Boris Johnson, a dual US and Brit citizen, also leader of the Brexit movement, who had to settle with the IRS in spite of having lived in the US only till the age of 5. Read the article below.

https://www.forbes.com/sites/robertwood/2015/02/15/savvy-london-mayor-boris-johnson-paid-irs-is-now-renouncing-u-s-citizenship/#346544d021c1.

So the tax advantages of the new Italian regime for foreigners are not going to favor Americans much. Whatever you save in income taxes in Italy, the US still wants the income taxes you’d have to pay in America (less whatever you have paid in Italy, if you reside there.

However one has to look at the overall picture when living abroad. The cost of living is less Health care is good and private care (and private health insurance) is a fraction of what we pay in America. If you buy a home in Italy, the property tax does not apply to your first residence. And even as second home, property tax there is not that expensive, compared to what we pay in the US. When I retire I’m considering, if not an outright move, a few months a year there.