Sicily IRPEF Refund 2026: Up To 60% For New Residents

Sicily IRPEF refund of up to 60% for new residents moving from abroad: eligibility requirements, property conditions, deadlines and how to apply.

Article 25 of Sicilian Regional Law No. 1 of 5 January 2026 introduced, for the 2026-2028 three-year period, a non-repayable grant calculated on the basis of the IRPEF due and paid, for individuals who transfer their tax residence to Sicily from abroad.

D.A. No. 30 of 19 May 2026 and the subsequent D.D.G. No. 1017 of 5 August 2026 established the implementing procedures, deadlines and application forms for claiming the benefit: the grant will be paid at 50% of the IRPEF due and paid in full, rising to 60% in the specified cases for those who transfer their tax domicile to a municipality in Sicily with fewer than 5,000 inhabitants.

What is the Sicily IRPEF Refund for new residents?

Those who choose to move their life, work and income to Sicily may, for three years, receive a refund of a significant portion of the IRPEF they have paid.

It is not an IRPEF tax credit or deduction, but a regional non-repayable grant (known as a “payback” or indirect refund).

Under the implementing provisions, the benefit is available to individuals who establish their residence and tax domicile in Sicily between 1 January 2026 and 31 December 2028 and who, within twelve months, either purchase a property on the island or carry out recovery, restoration, conservative rehabilitation or renovation works on a property they own.

How the grant works

The practical steps are as follows:

1. Ordinary payment of IRPEF. The beneficiary pays the IRPEF due to the Italian State in the usual way, like all taxpayers, with no direct reduction when filing the tax return.
2. Application for a refund from the Region. After making the payment, the beneficiary applies to the Sicilian Region, using the procedures and forms approved by D.D.G. No. 1017/2026, to obtain a partial refund of the tax paid.
3. Payment of the grant. Once it has verified that the requirements are met, the Region pays a grant equal to:
   1. 50% of the IRPEF due and paid, excluding regional and municipal surtaxes;
   1. 60% if the transfer is to a municipality in Sicily with fewer than 5,000 inhabitants.
4. Duration and cap. The benefit is available for three tax years, up to a maximum of €100,000 per year.
5. Ongoing requirements. The taxpayer must retain the following at least until 31 December of the second year following the year of transfer:
   1. Residence in Sicily;
   1. Tax domicile in Sicily;
   1. Ownership of the property, either purchased or subject to building works within 12 months of the transfer.

How the IRPEF paid is allocated

For the standard 50% grant, the Region explains how the measure works with this example: for every €100,000 of IRPEF paid by beneficiaries of the scheme:

• €50,000 is returned to the taxpayer as a grant;
• €29,000 goes to the State, which therefore receives additional tax revenue;
• €21,000 remains in the Region’s accounts as new revenue.

The grant may be paid by bank transfer or, at the beneficiary’s option, recognised as a tax creditto be used to offset tax liabilities.

Applying for the Sicily IRPEF refund

For those who transfer their residence during 2026, applications may be submitted from 1 September to 31 December 2027, after filing the tax return for income received in 2026.

The mechanism will be the same in subsequent years: for those who move in 2027, the application window will run from 1 September to 31 December 2028.

The grant can only be calculated and paid after the tax return has been filed, as its amount is based on the income earned.

Eligibility requirements for the Sicily IRPEF relief

The requirements for accessing the grant are set out in detail below:

1. Previous residence abroad: the applicant must have lived abroad before transferring their registered residence and tax domicile to Sicily.
2. Income: after moving to the island, the applicant must receive employment income or income treated as employment income, or be in receipt of a pension.
3. Property investment: the applicant must purchase a residential property in Sicily.

Alternatively, the applicant may carry out building renovation works on a property they already own.

The property must remain in the applicant’s ownership at least until 31 December of the second year following the transfer. If the transfer takes place in 2026, the requirements must therefore be maintained at least until 31 December 2028.

• Maintaining residence: the applicant must undertake to maintain residence in Sicily for at least the duration of the relief.

Who can benefit: workers and pensioners

Under the decree and related sources, the following categories of individuals may access the IRPEF refund:

• Returning Italians (Italian citizens resident abroad) – Italian citizens who, between 1 January 2026 and 31 December 2028, transfer their registered residence and tax domicile to a municipality in Sicily after residing abroad.

They must receive income taxable in Italy, namely employment income, income treated as employment income, or a pension.

• Foreign nationals (non-Italian citizens) – Foreign citizens, both EU and non-EU, who, during the same period, 2026-2028, transfer their residence and tax domicile to Sicily from abroad.

They are also subject to the requirement to receive income taxable in Italy, namely employment income, income treated as employment income, or a pension.

Can self-employed workers and digital nomads access the grant?

The Region’s initial communications also referred to self-employed workers and entrepreneurs.

However, Article 25 of Regional Law No. 1/2026 and D.A. No. 30/2026 expressly identify employment income, income treated as employment income and pensions taxable in Italy as the relevant categories of income.

Access to the scheme by self-employed workers and entrepreneurs therefore requires particular caution and an assessment based on the implementing provisions currently in force.

Exclusions and limitations

• The incentive cannot be combined with other national or regional tax incentives designed to attract new residents, for example the inbound workers regime under Article 5 of Legislative Decree No. 209/2023, the “Bonus Sud” or Southern Italy bonus, and similar measures.
• Ordinary maintenance of the property is not sufficient to meet the property requirement.
• If the requirements are breached, for example if residence is lost before the deadline, the grant is revoked in full and the amounts received must be repaid, together with statutory interest.

Sicily IRPEF refund and the inbound workers tax regime: differences

Italy has other tax relief schemes for certain categories of people who transfer or return their tax residence to the country.

The national “inbound workers tax regime” is currently in force and provides preferential taxation on a portion of income.

The legislation, governed by Legislative Decree No. 209/2023 (Tax Reform), applies throughout Italy.

Eligible income is included in total taxable income only to the extent specified by the legislation.

The relief consists of a 50% reduction in income subject to IRPEF, meaning that tax is paid on only half of the amount earned, for employment or self-employment income earned in Italy, up to an annual cap of €600,000.

The taxable portion may fall to 40% if the worker moves to Italy with a minor child, or if a child is born or adopted during the period in which the relief is claimed, subject to the conditions laid down by law, including the child’s residence in Italy.

The relief applies in the tax year in which the transfer takes place and in the following four tax years.

The two schemes cannot be combined.

National inbound workers tax regime: mandatory requirements

The requirements for accessing the regime are set out in detail below:

1. No prior residence: the individual must not have been resident in Italy during the three years preceding their return. This requirement increases to six or seven years if they return to work for the same corporate group.
2. Commitment to remain: the individual must maintain tax residence in Italy for at least four years, otherwise the benefit must be repaid in full of interest.
3. Qualifications: the individual must meet high qualification or specialisation requirements, for example a bachelor’s or master’s degree, or at least five years of documented professional experience in managerial or technical roles.
4. The work activity must be carried out mainly in Italy.

Another incentive to know about: Resto al Sud 2.0

Other measures for those intending to start a business in the eight regions of Southern Italy, Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily, include Resto al Sud 2.0.

This incentive is aimed at people under 35 who, provided they meet the scheme’s conditions, intend to launch new business, professional or self-employment initiatives in Southern Italy.

The scheme provides non-repayable grants and vouchers to support initial investment.

Because its objectives, requirements and application procedures differ from those of the IRPEF refund provided by the Sicilian Region for new residents, whether the incentives are compatible must be assessed on the facts of each case.

Are You Considering Transferring Your Tax Residence to Sicily?
Boccadutri International Law Firm can assist you in verifying the requirements, analysing the relevant income and compatibility with other tax regimes, and managing the documentation needed to access the scheme.

Contact us, and we will be pleased to support you in assessing whether the scheme is advantageous, managing the documentation and guiding you throughout the entire process.

FAQ

Who can apply for the Sicily IRPEF Refund?

Individuals who transfer their residence from abroad to Sicily and meet the income, tax and property requirements laid down by the legislation may apply.

How much does the Sicilian Region Refund?

The grant is equal to 50% of the relevant IRPEF and may rise to 60% in the specified cases where a property is purchased in municipalities with fewer than 5,000 inhabitants. The cap is €100,000 per year.

When can someone who moves in 2026 apply?

From 1 September to 31 December 2027, after filing the tax return for 2026.

Is it compulsory to buy a home in Sicily?

The applicant must either purchase a property within 12 months or carry out building works permitted by the legislation on a property they already own.

How long must residence and property ownership be maintained?

Until 31 December of the second year following the year of transfer. For a transfer in 2026, therefore, at least until 31 December 2028.

What happens if I sell the property?

An essential requirement would be lost if the property were sold before 31 December of the second year following the transfer. This would result in loss of the benefit and repayment of the amounts received.

Can the refund be combined with the inbound workers tax regime?

The law excludes combination with other national or regional tax incentives designed to attract new residents.

Does the Sicily IRPEF refund also apply to self-employed workers?

The law and implementing decree expressly identify employment income, income treated as employment income and pensions. The Region’s initial communications also mentioned self-employed workers and entrepreneurs, so access to the scheme in these cases requires a specific assessment.

Is the scheme already operational?

Yes, the implementing provisions have been published. For those who transferred their residence in 2026, the first application window runs from 1 September to 31 December 2027.