Choosing a Country
Italy vs Portugal vs Spain: Where to Retire for Tax in 2026
For years the answer was Portugal. In 2026 it isn't. A lawyer's comparison of the regimes that actually matter for a retiree or HNWI relocating to Southern Europe.
Disclaimer: This page is a general comparison and not legal or tax advice. Regime figures were verified in July 2026 and this is a fast-moving area. Cross-border relocation decisions must be planned with qualified advice in each country before acting.
01
The 2026 Shift: Portugal Is No Longer the Answer for Pensioners
The single most important change for retirees is Portugal. The Non-Habitual Resident regime — which for a decade taxed foreign pensions at 10% or nil — closed to new entrants on 1 January 2025. Its replacement, IFICI (informally "NHR 2.0"), is aimed at high-value active professionals and explicitly excludes foreign pensions. A retiree arriving in Portugal in 2026 pays ordinary progressive tax on pension income, reaching 48% plus a solidarity surcharge.
That removes the default choice and reopens the question. For pensioners, the real 2026 contest is now between Italy and Greece.
02
The Regimes Side by Side (2026)
| Country / regime | Foreign pension | Key conditions |
|---|---|---|
| Italy — 7% (art. 24-ter) | 7% on all foreign income | 10 years; move to a southern town ≤30,000 inhabitants |
| Italy — €300k (art. 24-bis) | Inside the €300k lump sum | Up to 15 years; for very large foreign incomes; no location limit |
| Greece — 7% | 7% on all foreign income | 15 years; anywhere in Greece |
| Greece — €100k non-dom | Inside the €100k lump sum | Requires €500,000 investment in Greece |
| Portugal — IFICI | Excluded → up to ~48%+ | NHR closed; replacement does not cover pensions |
| Spain — Beckham | Not available to retirees | Needs a work trigger; plus wealth & large-fortune taxes |
03
Italy or Greece for a Pensioner?
On the headline rate they tie at 7%. Greece wins on duration (15 years vs Italy's 10) and geographic freedom (anywhere vs Italy's towns of up to 30,000 inhabitants). Italy answers with a far larger, more storied stock of qualifying towns across eight southern regions — Sicily, Puglia, Calabria, Sardinia and more — a stronger double-tax treaty network, and, for non-pension wealth, the parallel €300,000 flat tax. The decision usually turns on lifestyle and where the qualifying towns actually are.
Read the detail of the Italian option in our 7% pensioner regime guide. For non-EU retirees, the move also requires the elective residence visa; UK citizens should read our post-Brexit guide.
04
Spain: Why It Rarely Fits a Retiree
Spain's Beckham regime is attractive — 24% on Spanish employment income up to €600,000, with foreign income largely outside scope — but it is built for incoming workers: it needs an employment contract, an assignment, a directorship or a digital-nomad visa, and is unavailable to someone living on a pension and investments. Spain also imposes a wealth tax (with heavy regional variation) and a now-permanent solidarity tax on fortunes above €3 million. For a passive-income retiree, Spain offers no special shelter — which is why the serious 2026 comparison is Italy versus Greece.
Deciding Where to Retire
Model the Move Before You Commit to a Country
The right regime depends on your income mix, your timeline, and where you actually want to live. We map the Italian option against the alternatives and structure the relocation.
Frequently Asked Questions
Is Portugal still tax-friendly for retirees in 2026?
No longer for pensions. Portugal's Non-Habitual Resident (NHR) regime closed to new entrants on 1 January 2025. Its replacement, IFICI ('NHR 2.0'), explicitly excludes foreign pensions — so a retiree moving to Portugal in 2026 pays ordinary progressive tax on foreign pension income, up to 48% plus a solidarity surcharge. Portugal has effectively dropped out of contention as a pension destination.
Can retirees use Spain's Beckham regime?
No. Spain's Beckham regime (24% flat on Spanish employment income up to €600,000, with foreign income largely outside scope) requires an active work trigger — employment, an assignment, a directorship or a digital-nomad visa. Passive-income retirees do not qualify, and Spain has no special flat regime for them. Spain also levies a wealth tax and a permanent solidarity tax on large fortunes.
Which country taxes foreign pensions most favourably in 2026?
Italy and Greece, both at 7%. Italy's art. 24-ter regime taxes all foreign income (including pensions) at 7% for 10 years, but requires moving to a southern town of up to 30,000 inhabitants. Greece's equivalent is 7% for 15 years and applies anywhere in the country. Italy also offers a €300,000 lump-sum flat tax for very large non-pension incomes.
What is Italy's option for high-net-worth individuals rather than pensioners?
The art. 24-bis flat tax: a fixed €300,000 per year on all foreign income (any amount), for up to 15 years, for those transferring residence from 2026 — plus €50,000 per family member. It suits very large foreign incomes and imposes no location constraint, unlike the 7% pensioner regime.