IRPEF Refund for New Residents in Sicily (2026): A Technical Analysis of Article 25

The Sicilian Region has introduced, through Article 25 of Regional Law No. 1 of 5 January 2026, a measure aimed at attracting new residents: a refund of up to 50% (or 60%) of IRPEF (Italian personal income tax) for individuals relocating from abroad to Sicily.

While often described in the media as a “tax haven” measure, a technical reading of the law reveals a more structured framework, with specific requirements and significant limitations.

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What the Measure Actually Is

From a legal standpoint, this is not a tax credit and does not reduce tax at source.

The law clearly defines it as:

a non-repayable grant (cash contribution) provided by the Region upon application

This means:

• the taxpayer pays IRPEF under ordinary rules;
• submits an application to the Region;
• receives a refund afterwards.

There is no automatic reduction via payroll or tax return.

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Who Can Benefit

The measure applies to:

• individuals transferring their tax residence from abroad to Italy;
• establishing tax domicile in Sicily;
• earning:
  • employment income,
  • income assimilated to employment,
  • pensions.

Excluded (based on the literal wording of the law):

• self-employed individuals;
• freelancers;
• business owners.

This creates a clear gap between the legal text and the broader political messaging.

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Operational Note for Our Firm

These categories fall outside the typical scope of clients assisted by Studio Bonaccorsi.

As such, we are not in a position to provide assistance for this specific measure, unless the individual is already a client in connection with a business or corporate structure.

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Key Requirements

To qualify, all of the following must be met:

• transfer of residence between 1 January 2026 and 31 December 2028;
• tax domicile in Sicily;
• real estate investment within 12 months:
  • purchase of a property, or
  • qualifying renovation (excluding ordinary maintenance);
• maintenance of:
  • residence,
  • tax domicile,
  • property ownership
    until 31 December of the second year following relocation.

Failure to comply results in repayment of the benefit.

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Amount of the Benefit

The measure provides:

• 50% refund of IRPEF paid
• 60% if:
  • the property is purchased (not just renovated),
  • in a municipality with fewer than 5,000 inhabitants

With:

• annual cap: €100,000
• duration: 3 years

First-Year Limitation

If relocation occurs during the year, the refund is limited to the portion of IRPEF attributable to Sicily (pro-rata basis).

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Non-Cumulability with Other Regimes

The benefit cannot be combined with:

• the Italian inbound workers regime (impatriati);
• the 7% flat tax regime for foreign pensioners.

A choice must therefore be made.

However, standard tax deductions and certain incentives (e.g. renovation bonuses) may still apply, subject to general anti-duplication rules.

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Critical Limitation: Eligible Income Types

The law explicitly includes only:

• employment income;
• assimilated income;
• pensions.

It does not include:

• self-employment income;
• business income.

This significantly restricts the practical scope of the measure.

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When the Measure Makes Sense

The incentive may be relevant for:

• high-income employees relocating from abroad;
• pensioners with substantial taxable income;
• individuals already planning to purchase property in Sicily.

It is generally less attractive for:

• entrepreneurs;
• freelancers;
• individuals eligible for the impatriati regime.

A case-by-case analysis is essential.

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Pending Clarifications

At the time of writing, the implementing decree has not yet been published.

Key aspects still unclear include:

• application procedures;
• documentation requirements;
• timing of payments;
• detailed calculation rules;
• anti-abuse provisions.

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