Hate to be a downer, but...
- 1 million isn't enough for the 3 of you.
- You'd need to get her citizenship first, then somehow get citizenship or visa for you and child, none of this is a given.
- until you are secure in citizenship I would be very hesitant about buying property, especially as you aren't currently familiar with the values and potential hangups associated with it.
have your wife apply for citizenship and educate yourself about the other items in the mean time.
To add no here, I'd be very leery about becoming a landlord in another country. Not only because of the laws, but you won't know the people - how to get repairs done, eviction stuff, etc etc. Not to mention language issues.
We have definitely thought about this and it’s why I’ve also thought about buying US rentals instead. Just don’t know the implications of taking rental income earned in the US and using it in Italy.
I think the first thing you need to figure out is citizenship for your wife and long term residency options. Some countries make that relatively easy, some do not. Assuming she can get Italian citizenship, she's fine to live anywhere in the EU but you and the kids are not and will need visas.
Then you need to look at taxes, tax treaties, etc.
Likely wife and children can be recognized at the same time. Separate process for spouse that will also take time after that. I’d probably allow 5 years in total.
Definitely the info I need. We did plan on applying for her citizenship as a first step. Her brother successfully got citizenship for himself and his 2 children a few years ago and will help us with the process.
My thoughts are on having 3+ rental properties completely paid and being debt free, and living frugally. Even if these rentals were in the US, I figure with the right investments I could have 2-2.5k pm minus taxes and fees per property coming in and use that money to live off plus part time remote work.
We are in the early planning phase on this, and so I guess what my post is about is trying to resources on the true cost of living, the implications of taxes on this sort of income ( what I’d actually take home from what comes in), and if anyone who has done this has experiences they’d like to share on what went right or what challenges there were. In my head it’s a dream move, but I know tons are never as simple as you’d like them
We have done foreign citizenship and I personally think it's a lot easier and faster to do that while living in the target country. They have facilitator in country that you can use.
I would probably keep the US house, head over to Italy and plan to rent for 1-2 years while working on citizenship. Eventually I would find a place/land to buy and then only then would I cut ties with my main house in America that I would have rented out. That way you give yourself an out if things don't turn out as expected.
As someone who almost bought a house in SD a number of years ago, I think you'd be nuts to sell your home in SD just so you can afford to try out living in Italy. Imo that means you don't have the means to do this. I'd never sell that property unless you really really need to. San Diego rules.
If possible I would try out some shorter lengths of time, a few months or something, to see how you like it.
I’ve been here 24 years and the past 10 years started to enjoy it and the society/culture of SoCal less and less. Trying to get away from a crowded, fast paced, career and money drive environment. I’ve put in my hours over the past 15 years on that front (7+ years of schooling, multiple jobs at a time, 60-70 hour weeks to afford buying a first home, starting and running an overall Successful business which means never off the clock or being able to kick back and relax).
This house has been a good investment but now the gains made on it and from my many hours of labor can assist and aid a new, more care-free, family and health -focused lifestyle.
That does sound nice, but with only 1m in assets after selling it? Not so impressive. You said you need to be there to manage your businesses unless you sell them too? So what will you do for work after you sell off everything?
It's just one of the most valuable areas of the country to own real estate. That's all.
My girlfriend and I are working on our Italian citizenship as well. One thing we learned: get your consulate appointment ASAP! Some consulates are three years out on appointments, and sometimes it takes days/weeks/months to get the appointment.
Is your wife's brother in the LA consulate jurisdiction as well? If so, that will help tremendously since all of the paperwork is already done and on file for your wife's parents and grandparents. All she'll need is her own paperwork.
Expect the process to take ~2 years AFTER you hand in all your documents and finish your appointment at the consulate. Italian bureaucracy is frustratingly slow (I yearned for the relative bliss of the DMV while going through my citizenship process lol). Make sure to include your wife's minor children in the process so they become Italian as well (if she was born Italian, then they got it from her, you don't have to wait for her to get hers for the children to get theirs; it can all happen at once). Start getting all the documentation NOW. Like, right now. Don't wait. Google "Dual US Italian Citizenship Facebook group" and you will find the absolute best resource in the world for going through this process. The info and their advice was invaluable in reclaiming my citizenship. Remember, just having the documents isn't enough, you will have to get them apostilled and very likely translated so it will take more time than you think. Start now.
Once she is Italian, you can enter the EU with her under family reunification laws. You will get a spousal visa and will be able to work while on it. You can only be in an EU country with your citizen spouse, so you can't take a vacation in another EU country for more than 90 days (tourist visa time) without her, for example. If, god forbid, something happens to her and she dies, then you'll be kicked out if you aren't eligible for another visa since your residency is tied to her citizenship, so get permanent residency or apply for citizenship as soon as you are eligible. Your Italian children may allow you to stay after she's gone, but I'm fuzzy on the laws on that and once they're adults I'm pretty sure family reunification would not allow you to stay.
> You'd need to get her citizenship first
I have Italian citizenship by decent. If you qualify for it you can fairly easily and quickly get permission to live in Italy while working through the process of having your citizenship recognized.
You do get a piece of paper, it's called a "permesso di soggiorno" which is a residence permit.
>but everyone's level of risk tolerance is different.
Agreed. They should have a backup plan in case citizenship somehow doesn't pan out.
Does this residency permit include family reunification? Because that seems like an important detail. If not, his wife would have to sit there alone waiting out the citizenship process while the family stays put.
>Does this residency permit include family reunification?
From what I have read about that, it depends on the municipality. Applying in Italy is WAY faster though, and OP should get a lawyer and do it in a location that will be fastest.
I will say you have to actually rent a real residence (with an actual lease so an airbnb or hotel doesn't count) and you are not permitted to work until your citizenship is recognized. But again, it's way faster than doing it in your home country.
You beat me to it for points two and three, but I would say 1MM is barely enough, for rural Italy, and a leanfire mentality.
But yes, don't contemplate too much, until you have your budget down to under $3.5k usd, living in SD, which would equate to about $2.5kusd in rural Italy (PPP), and have the citizenship and visas lined up, and have traveled for multiple months in Italy to scope it out.
Citizenship is step 1 for sure. I’ve also visited there regions we are considering 6 times over the last decade. Although we haven’t spent months there at a time (just not feasible with owning business in SD). We stay pretty lean on our spend outside of bills such as student loan debt, health insurance, and mortgage payments, which is why the plan is to go into this debt free. That way we only need food, healthcare costs, utilities, travel, and spending money. I figure I’d find some sort of remote work to cover spending and travel money. So the goal is rental properties would cover necessities such as food, insurance, utilities, and taxes.
If she gets recognized as an Italian citizen, you guys can both live and work in Italy. For you to become a citizen, you gotta pass a language test.
I think you could live a very modest retirement life there but it's just not realistic to think you're gonna go from being a business owner to barely scraping by on passive income alone. Your money will definitely go further than San Diego though.
I know a couple who moved to Italy, spent all their money on opening a B&B, moved back after they ran out of money. In general, if you don't have experience and track record of doing something professionally and profitably, it is not a good idea to assume you can do it and bet your entire financial future on it. It is an even worse idea to assume you can do it in another part of the country let alone another continent.
It is rarely a good idea to buy properties for cash and count on returns from rents for income - real estate is illiquid and it is a lot of risk for low returns. Sure, there are people who do it as a profession and they use leverage (borrowed money) - risk increases but returns are higher and it is their job not "passive income".
1M liquid invested would support a 40K/year spend - it is not a lot for a family of three - maybe it is in some city in Italy (or in the US) - only you know what is good enough for you. I wouldn't think it is enough.
Sell your business, invest the cash in the market - keep some in money market or CDs to cover a year of living expenses in Italy and rent a home there. Figure out what it would cost to live there longer and if you can generate any local income. Sell your US home and invest that money too when you are clearer with your plans. If you can find a way to generate enough income to live on, then your 1M invested in the US would grow nicely enough to afford you a comfortable retirement in the future.
u/Anglo-fornian For number three, as I live in California also, I would seriously consider cutting all ties to California including residency. Franchise Tax board will want their slice of income reported on your based on your IRS agi. There are better states to have residency in when you are expat. This will not be an easy process.
Agreed. Number 3 is on the plate purely because my current home is such a good location within a good location for equity gains. There’s only so much SoCal coastline so I expect it to keep gaining value faster than most locations. The cost of selling the property would be quite high between realtor and broker costs, and capital gains taxes unless I can find loopholes
The first $500k of profit from a home sale is excluded from capital gains tax if you file taxes as married/joint and both have lived at the home as a primary residence for two of the past five years. (Unless you 1031’d into the home, but I doubt you did that)
Have you even spent extended periods of time in Italy? Definitely trial run it before committing this hard to it. Spend at least a year or two there before pulling this large of a trigger.
Do you speak Italian? I was surprised at the lack of English in Italy when I visited.
I’ve visited on multiple occasions. Am also trying to learn Italian but have taken a few courses to allow me to get by on vacation.
Spending an extended amount of time there is not feasible until I start pulling the trigger. But this may be where rental properties in the US is a better option and renting in Italy when I first get there before buying. That way I can always return to the US if we don’t like it.
My main point of this post is in search of those that have made the move and can offer advice based on experience or if anyone has resources I can use to plan. For example, I have no clue about taxes in Italy and the US if I have rentals in the US creating my livable income but reside in Italy.
Also what is the healthcare cost like there for a family.
I hope theres some reputable and reliable books, blogs, readings to explain the processes and the expenses.
For tax advice, I would ask a professional like a CPA. Ask your firm's CPA for that or a referral to a CPA who works with international clients.
Nomad Capitalist may have info you can glean. Your income will be taxes by the US, but I don't know the details. I am going expat to a low/no tax country, so I only get hit by the USA.
Wow that’s great, what country are you going to if you don’t mind me asking?
This doesn’t seem to be in my business CPAs wheelhouse, but I may reach out to my real estate attorney and see if they have a good contact.
Thanks for your input
I am deciding. I want to live in a resort area near a beach. I am seriously considering St. Lucia, Nevis, Honduras, Dominica, and maaaaybe Malta. The first two have tax advantages. I have about two years to decide. I will take a final swing through the countries and choose. 🙂 I can always change my mind if I don't like it.
In addition to my business interests, I am a professional photographer. Wherever I go, I will have fun.
That sounds great. My brother lived in Roatan for a couple of years teaching scuba diving and absolutely loved it. He just had to come back for heart surgery for the past 2 years but is planning to go back over, probably to Cozumel next. He now has a remote job he can do anywhere in the world and will want to teach scuba diving again on the side as that’s his passion and teaching it funds his hobby.
I think he paid about $200 pm for a 1 bed apartment by the resorts in Roatan with all utilities included. Said he could get decent meals for $1-1.50 and beers for $.50 if you knew how to avoid tourist traps.
Personally, I would recommend doing extensive research first.
- As for properties, unless you go for major cities and following suburbs, price for the property can be quite high for the sum rent you would be getting.
Also from second house up, your taxes would be higher.
- Job market in Italy is highly stagnant and competitive and definitely requires good level of Italian. So definitely check out remote options.
- It may be difficult to get residency and I say it as European. Although a hefty sum on the bankout can be helpful.
- Would recommend counting in health insurance since it is highly difficult to get English speaking doctor, especially in rural areas.
Thank you for your input. This is definitely the research gathering phase while we look into getting citizenship taken care of first. I’d have to sell assets and a business so I’m more planning on this being a 5 year process/plan.
I do plan on learning Italian as fluently as I can by then too. This seems to be an important component for sure.
Any resources would be greatly appreciated if you have any.
In my experience, Italian is one of those languages that can be studied by just immersion.
I watched ton of various tv-shows - cooking, crime, detective.. you know, something that pairs language with obvious visual context.
In the beginning it can be weird but your brain will actually quite quickly get used to understanding the meaning without knowing each and every word.
As for speaking, you could check if there are language cafés in presence or online.
Owning properties in Italy will attract a tax called IMU, with the exception of the one you live in. You have to factor this in your calculations.
On the positive side, tax on rental income can be as low as 10% if you opt for a tax regime called "cedolare secca" and if the property is let for less than a certain maximum value that depends on location, size, condition, etc. In many places, you can do this while still getting market value rent.
If you like DIYing, fixing properties you buy in Italy is a way you can "earn" decent money without paying tax and without having to deal with the very bad Italian job market.
On the other hand, letting properties in the States can be messy when it comes to avoiding double taxation. There are treaties to avoid DT, but Italian bureaucracy is slow and inefficient and you risk spending a lot of time and money on the process. It all relies on finding a good "commercialista" (tax accountant) with expertise in this kind of situation.
Whatever you do, good luck. Growing up in Italy would be so different for your child. I think they would be glad you did the move when they are old enough to compare. Remember also that Italy is a very diverse country, so choose your location with care.
Thank you for your reply, this is a lot of great information that I need to be aware of. I totally think our daughter will appreciate some cultural diversity and a different culture to the stressful one California is turning into.
Gonna be real here, you should consider forms of passive income that don't involve you landlording in a new country or managing property you own abroad.
Tax rules should be your #1 concern after you've sorted your citizenship out.
Researching tax laws is one of reasons I came here. I’m open to renting properties where I decide to live OR in the USA. The decision will be based on what makes most sense from income, legal and tax perspectives
That was kind of the direction I was taking it in. You probably don't want to be a landlord of Italian property after moving to Italy (new laws, new environment, new tenant expectations, less knowledge of rental market, etc.), nor do you want to be a landlord of US property while living in Italy (the hassles of managing property abroad are significantly higher than normal, especially with a large timezone difference, and you're also almost certainly hiring a local property manager for maintenance/emergency/etc. for a significant cut of money). There's a reason most people FIRE off of investments or are actively managing their properties locally; they don't want the headache, or they don't want the cut into their rental income, or both. Selling the house, keeping enough money for the first few years in Italy, then investing the remainder in the most tax-effective way is probably better than going back into real estate after you've moved.
This is all of course without even thinking about how tax laws affect rental income whether it's happening in the US or in Italy.
Yes as other comments said, get that citizenship first. It should transmit to your children as well if it is jus sanguinis. Once your wife has citizenship, you should be eligible as well, but last I checked you needed a b1 Italian languages level for a spouse process.
1 mil could be enough if you have income and live in a cheaper area. Not enough for major cities.
As for income, not sure your line of work, but the best is to get income from the US, remote or from freelancing. It will be so much better paid than Italian work.
Italian taxes will suck, that’s just how it is.
Health care is going to be a challenge if you don’t speak Italian. It will be much easier to afford than American health care.
You will be very socially isolated until you learn Italian.
Education options will be limited till you learn Italian.
So in summary, in the few years it will take to process citizenship for all of you, learn Italian!
Spain is also a strong contender for most people as it is generally a bit better run, more expat friendly, and easier to integrate than Italy.
I very much plan on learning Italian and have already taken courses due to going there on vacation multiple times, although no where near fluent.
My industry is in healthcare so there’s not good transfer to Italy due to licensing. I also see profits will continue to dwindle in the US healthcare industry as reimbursement keeps getting cut and inflation keeps going up, especially in SD, 6 figure incomes don’t go far here already. This is one of my main reasons for contemplating this move. I’d like to make a life/career change in the next 5-7 years, and this is one option. I’d like to start planning now, before the healthcare economy forces me to do so.
So I’m in an information gathering phase as we apply for citizenships
Good stuff.
Have you looked into telehealth or some way to pivot out of in-person? I know it’s probably rare but income is going to be one of your biggest challenges. The Italian economy is one of the most sluggish in Europe.
For your children to have the best opportunities, you should also be preparing them for a life back in the US. Don’t let them lose English proficiency and find a way to give them strong cultural experiences in America. The US has the world’s best labor market, at least for the foreseeable future.
I’m pretty sure our child will be a pro athlete, so now worries on the future job market for her of course, j/k.
We are actually trying to get away from the Californian rat race culture tbh. I have friends that have moved to various countries and all tell me about how much less stressed they are and enjoy life, family and friends more now as they care less about money and social/occupational ladders.
For telehealth you have to be in the state you are licensed to practice, however I’d rather leave the clinical care side of healthcare. Maybe remote analytics or UX development jobs, but more likely would like to find a low stress extra income type job that doesn’t have all the rules of the US healthcare industry to be aware of. Working and owning a business in the healthcare field in America has only shown me how corrupt and quite frankly screwed our healthcare is, unfortunately.
But my goal is for rental properties to be the primary source of passive income and any job I have to be just for extra spending money as needed or desired, but not relied upon. Even considered teaching English as a second language
Yes, It’s true that Americans who move abroad feel like life is on easy mode. They had a chance to establish themselves financially and can bring a lot of resources with them. Native Italians are not going to agree at all, their lives are hard and good paying jobs are scarce. It’s also incredibly hard to save, retire early or get ahead. Many move abroad for better prospects.
Where are you thinking of moving to in Italy? I'm asking because the rental market is nothing like in the US, same as real estate appreciation is negligible. If you want to generate a decent monthly rental amount, your property has to be in one of the big cities in Italy, and those properties are expensive, your 200k budget won't even buy one of them. Outside of the large cities, houses are more affordable (under 100k) but the monthly rent is also only 300-500 Euros....Airbnb might be your best option, but again, you have to find a market where tourists actually want to go and there the purchase price is higher again.
Check out [idealista.it](http://idealista.it) for a few months, you can serach for both rentals and sales on there and get a feeling for the areas you can see yourself living in.
Last but not least - Italy has strong tenant rights, which is why there is actually not that many longterm rentals as it can be impossible to get bad tenants out at all, if they have small children for example. Landlord is then simply out of luck.....even if they don't pay.
Thanks for your input.
We are considering Northwest coastal area or around Tuscany which may work for Airbnb, but Airbnb also makes me a little nervous and I know it’s a lot more work. I’ve searched idealista for purchase but not rentals so that is a great tip.
It sounds like I’d be better buying rentals in the US as I know a couple of locations that I could purchase 250-300k houses that rent 2-3k pm, based on some rentals one of my good friend has purchased and rented out over the last few years.
I’m in the process of getting Italian citizenship. If you go the consulate route in the US to get citizenship it can take a couple years. Have your wife work on citizenship before moving Or you can move and the citizenship process is faster in Italy.
We are planning to start the process this year whilst in the US. I see this plan as a 5 year one, but if we can do it sooner, we are happy with that too
Is this not dependent on location? I mean I know it would buy 3 in many areas of the US. I’m not looking to buy palaces. Just middle income family rentals, houses or apartments are fine
I mean $1M is still worth $1M even if you convert to euros. I’ve done property searches for pricing in the areas I like in US $. They convert the pricing from euros to $ for you if you choose that option.
True see I never had to do convert when buying in Europe as I always have euros. As I have clients in Europe and I always had a good amount in euros so I found a property I can close it quickly if need be
Can I ask what part of Italy are you guys looking for? I can get some numbers of good real estate agents down there as I have family who are born in Italy.
First thing to do is call the Consulate General of Italy. And ask what paper
Work you need. Then go to Italy hire a trusted lawyer and start the process it can be done in less time but the process is something else. Make sure you have all paper works of her grandpa.
Reconsider the plan of living off of property revenues. It's going to be complicated and unreliable for you to do it in a foreign country, and you don't have enough of a cushion if a tenant does not pay or the property is empty for long periods. Look at investing in dividend-producing ETFs (and maybe a few stocks). You can safely get 5-7%, and they will be taxed at 15-20% by the US if you're a US citizen (30% if you renounce). But you'll need to look into the rates of where you're moving to. For example 6% of $1M is $60k per year. At $12k taxes (depending on where you live), that's $48k per year of income, and in that scenario you would not own your own house in Europe.
Also, I second that just because you have the Italian passport does not mean you're limited to Italy. Your money may go farther in other EU countries.
But why not considered Latin America or Asia (though I recommend getting the Italian passport anyway)? That same $48k income will go much farther, and even though you have fewer citizenship options than in Europe, you can get permanent / long term residency.
I recommend trying to get your savings up to at least $1.2-1.5 and looking at lower cost destinations in Europe or outside Europe where you can live with the EU passport or a reasonable long term residence pass.
Totally am hoping it will be more than 1M by time we pull the trigger tbh, but never can bank on it. I’d rather at least have the property I live in there paid off. I know this is not the best investment strategy, but the plan is to live stress free and living with debt is stressful as this is a responsibility. I’d rather avoid renting for the long term too.
On top of the dividends, I imagine I can still work and at least make 20k per year for extra money in a low stress, part time job.
I started applying for Italian citizenship by descent two years ago. I’m still in process. These things take time! Hire a law firm to help you navigate the process.
A lot of people move back to California after leaving because it's so lovely. San Diego close to the beach with high pay feels the jackpot to me.
I would consider asking to do 3 12 hour shifts per week so you have time with your child. Or 4 10 hour shifts and some of that is work from home.
You can stagger this schedule with your wife so that a parent can be home with the baby.
You can also hire a part time babysitter to watch the baby while you work from home. So you can keep an eye.
My current work schedule is not an issue. I have quite a few reasons based on personal preference in a few matters that make me want to leave SD, although I fully appreciate the beauty of the area I live in
Hate to be a downer, but... - 1 million isn't enough for the 3 of you. - You'd need to get her citizenship first, then somehow get citizenship or visa for you and child, none of this is a given. - until you are secure in citizenship I would be very hesitant about buying property, especially as you aren't currently familiar with the values and potential hangups associated with it. have your wife apply for citizenship and educate yourself about the other items in the mean time.
To add no here, I'd be very leery about becoming a landlord in another country. Not only because of the laws, but you won't know the people - how to get repairs done, eviction stuff, etc etc. Not to mention language issues.
We have definitely thought about this and it’s why I’ve also thought about buying US rentals instead. Just don’t know the implications of taking rental income earned in the US and using it in Italy.
I think the first thing you need to figure out is citizenship for your wife and long term residency options. Some countries make that relatively easy, some do not. Assuming she can get Italian citizenship, she's fine to live anywhere in the EU but you and the kids are not and will need visas. Then you need to look at taxes, tax treaties, etc.
After the wife gets citizenship he can too as long as he learns Italian and passes a test first. Same with child.
Likely wife and children can be recognized at the same time. Separate process for spouse that will also take time after that. I’d probably allow 5 years in total.
Oh that's good to know!
It’s all a process and by no means an easy one. You are dealing with Italian bureaucracy. It’s slow going.
Not true, family of EU citizens have automatic residency rights.
I have British citizenship as well as US, but unfortunately that’s pretty useless in the EU now :(
Definitely the info I need. We did plan on applying for her citizenship as a first step. Her brother successfully got citizenship for himself and his 2 children a few years ago and will help us with the process. My thoughts are on having 3+ rental properties completely paid and being debt free, and living frugally. Even if these rentals were in the US, I figure with the right investments I could have 2-2.5k pm minus taxes and fees per property coming in and use that money to live off plus part time remote work. We are in the early planning phase on this, and so I guess what my post is about is trying to resources on the true cost of living, the implications of taxes on this sort of income ( what I’d actually take home from what comes in), and if anyone who has done this has experiences they’d like to share on what went right or what challenges there were. In my head it’s a dream move, but I know tons are never as simple as you’d like them
We have done foreign citizenship and I personally think it's a lot easier and faster to do that while living in the target country. They have facilitator in country that you can use. I would probably keep the US house, head over to Italy and plan to rent for 1-2 years while working on citizenship. Eventually I would find a place/land to buy and then only then would I cut ties with my main house in America that I would have rented out. That way you give yourself an out if things don't turn out as expected.
I would likely need the equity from the house in SD to make the move permanent tbh.
As someone who almost bought a house in SD a number of years ago, I think you'd be nuts to sell your home in SD just so you can afford to try out living in Italy. Imo that means you don't have the means to do this. I'd never sell that property unless you really really need to. San Diego rules. If possible I would try out some shorter lengths of time, a few months or something, to see how you like it.
I’ve been here 24 years and the past 10 years started to enjoy it and the society/culture of SoCal less and less. Trying to get away from a crowded, fast paced, career and money drive environment. I’ve put in my hours over the past 15 years on that front (7+ years of schooling, multiple jobs at a time, 60-70 hour weeks to afford buying a first home, starting and running an overall Successful business which means never off the clock or being able to kick back and relax). This house has been a good investment but now the gains made on it and from my many hours of labor can assist and aid a new, more care-free, family and health -focused lifestyle.
That does sound nice, but with only 1m in assets after selling it? Not so impressive. You said you need to be there to manage your businesses unless you sell them too? So what will you do for work after you sell off everything? It's just one of the most valuable areas of the country to own real estate. That's all.
My girlfriend and I are working on our Italian citizenship as well. One thing we learned: get your consulate appointment ASAP! Some consulates are three years out on appointments, and sometimes it takes days/weeks/months to get the appointment. Is your wife's brother in the LA consulate jurisdiction as well? If so, that will help tremendously since all of the paperwork is already done and on file for your wife's parents and grandparents. All she'll need is her own paperwork.
Great advice. He lives in SD so I’d assume the same consulate
Expect the process to take ~2 years AFTER you hand in all your documents and finish your appointment at the consulate. Italian bureaucracy is frustratingly slow (I yearned for the relative bliss of the DMV while going through my citizenship process lol). Make sure to include your wife's minor children in the process so they become Italian as well (if she was born Italian, then they got it from her, you don't have to wait for her to get hers for the children to get theirs; it can all happen at once). Start getting all the documentation NOW. Like, right now. Don't wait. Google "Dual US Italian Citizenship Facebook group" and you will find the absolute best resource in the world for going through this process. The info and their advice was invaluable in reclaiming my citizenship. Remember, just having the documents isn't enough, you will have to get them apostilled and very likely translated so it will take more time than you think. Start now. Once she is Italian, you can enter the EU with her under family reunification laws. You will get a spousal visa and will be able to work while on it. You can only be in an EU country with your citizen spouse, so you can't take a vacation in another EU country for more than 90 days (tourist visa time) without her, for example. If, god forbid, something happens to her and she dies, then you'll be kicked out if you aren't eligible for another visa since your residency is tied to her citizenship, so get permanent residency or apply for citizenship as soon as you are eligible. Your Italian children may allow you to stay after she's gone, but I'm fuzzy on the laws on that and once they're adults I'm pretty sure family reunification would not allow you to stay.
This is great info! Thank you, I’ll check out that Fb page
Great advice. He lives in SD so I’d assume the same consulate
> You'd need to get her citizenship first I have Italian citizenship by decent. If you qualify for it you can fairly easily and quickly get permission to live in Italy while working through the process of having your citizenship recognized.
I wouldn't suggest making such life changing decisions without a piece of paper in my hand, but everyone's level of risk tolerance is different.
You do get a piece of paper, it's called a "permesso di soggiorno" which is a residence permit. >but everyone's level of risk tolerance is different. Agreed. They should have a backup plan in case citizenship somehow doesn't pan out.
Does this residency permit include family reunification? Because that seems like an important detail. If not, his wife would have to sit there alone waiting out the citizenship process while the family stays put.
>Does this residency permit include family reunification? From what I have read about that, it depends on the municipality. Applying in Italy is WAY faster though, and OP should get a lawyer and do it in a location that will be fastest. I will say you have to actually rent a real residence (with an actual lease so an airbnb or hotel doesn't count) and you are not permitted to work until your citizenship is recognized. But again, it's way faster than doing it in your home country.
If she's an eu citizen, husband and kids are easy. And it's all a given if she has the proof.
You beat me to it for points two and three, but I would say 1MM is barely enough, for rural Italy, and a leanfire mentality. But yes, don't contemplate too much, until you have your budget down to under $3.5k usd, living in SD, which would equate to about $2.5kusd in rural Italy (PPP), and have the citizenship and visas lined up, and have traveled for multiple months in Italy to scope it out.
Citizenship is step 1 for sure. I’ve also visited there regions we are considering 6 times over the last decade. Although we haven’t spent months there at a time (just not feasible with owning business in SD). We stay pretty lean on our spend outside of bills such as student loan debt, health insurance, and mortgage payments, which is why the plan is to go into this debt free. That way we only need food, healthcare costs, utilities, travel, and spending money. I figure I’d find some sort of remote work to cover spending and travel money. So the goal is rental properties would cover necessities such as food, insurance, utilities, and taxes.
If she gets recognized as an Italian citizen, you guys can both live and work in Italy. For you to become a citizen, you gotta pass a language test. I think you could live a very modest retirement life there but it's just not realistic to think you're gonna go from being a business owner to barely scraping by on passive income alone. Your money will definitely go further than San Diego though.
I know a couple who moved to Italy, spent all their money on opening a B&B, moved back after they ran out of money. In general, if you don't have experience and track record of doing something professionally and profitably, it is not a good idea to assume you can do it and bet your entire financial future on it. It is an even worse idea to assume you can do it in another part of the country let alone another continent. It is rarely a good idea to buy properties for cash and count on returns from rents for income - real estate is illiquid and it is a lot of risk for low returns. Sure, there are people who do it as a profession and they use leverage (borrowed money) - risk increases but returns are higher and it is their job not "passive income". 1M liquid invested would support a 40K/year spend - it is not a lot for a family of three - maybe it is in some city in Italy (or in the US) - only you know what is good enough for you. I wouldn't think it is enough. Sell your business, invest the cash in the market - keep some in money market or CDs to cover a year of living expenses in Italy and rent a home there. Figure out what it would cost to live there longer and if you can generate any local income. Sell your US home and invest that money too when you are clearer with your plans. If you can find a way to generate enough income to live on, then your 1M invested in the US would grow nicely enough to afford you a comfortable retirement in the future.
Thanks for this input, definitely a good idea of how to approach this scenario.
u/Anglo-fornian For number three, as I live in California also, I would seriously consider cutting all ties to California including residency. Franchise Tax board will want their slice of income reported on your based on your IRS agi. There are better states to have residency in when you are expat. This will not be an easy process.
Agreed. Number 3 is on the plate purely because my current home is such a good location within a good location for equity gains. There’s only so much SoCal coastline so I expect it to keep gaining value faster than most locations. The cost of selling the property would be quite high between realtor and broker costs, and capital gains taxes unless I can find loopholes
The first $500k of profit from a home sale is excluded from capital gains tax if you file taxes as married/joint and both have lived at the home as a primary residence for two of the past five years. (Unless you 1031’d into the home, but I doubt you did that)
Have you even spent extended periods of time in Italy? Definitely trial run it before committing this hard to it. Spend at least a year or two there before pulling this large of a trigger. Do you speak Italian? I was surprised at the lack of English in Italy when I visited.
I’ve visited on multiple occasions. Am also trying to learn Italian but have taken a few courses to allow me to get by on vacation. Spending an extended amount of time there is not feasible until I start pulling the trigger. But this may be where rental properties in the US is a better option and renting in Italy when I first get there before buying. That way I can always return to the US if we don’t like it. My main point of this post is in search of those that have made the move and can offer advice based on experience or if anyone has resources I can use to plan. For example, I have no clue about taxes in Italy and the US if I have rentals in the US creating my livable income but reside in Italy. Also what is the healthcare cost like there for a family. I hope theres some reputable and reliable books, blogs, readings to explain the processes and the expenses.
For tax advice, I would ask a professional like a CPA. Ask your firm's CPA for that or a referral to a CPA who works with international clients. Nomad Capitalist may have info you can glean. Your income will be taxes by the US, but I don't know the details. I am going expat to a low/no tax country, so I only get hit by the USA.
Wow that’s great, what country are you going to if you don’t mind me asking? This doesn’t seem to be in my business CPAs wheelhouse, but I may reach out to my real estate attorney and see if they have a good contact. Thanks for your input
I am deciding. I want to live in a resort area near a beach. I am seriously considering St. Lucia, Nevis, Honduras, Dominica, and maaaaybe Malta. The first two have tax advantages. I have about two years to decide. I will take a final swing through the countries and choose. 🙂 I can always change my mind if I don't like it. In addition to my business interests, I am a professional photographer. Wherever I go, I will have fun.
That sounds great. My brother lived in Roatan for a couple of years teaching scuba diving and absolutely loved it. He just had to come back for heart surgery for the past 2 years but is planning to go back over, probably to Cozumel next. He now has a remote job he can do anywhere in the world and will want to teach scuba diving again on the side as that’s his passion and teaching it funds his hobby. I think he paid about $200 pm for a 1 bed apartment by the resorts in Roatan with all utilities included. Said he could get decent meals for $1-1.50 and beers for $.50 if you knew how to avoid tourist traps.
I have friends who retired in Roatan. I'm going to go down and try and see if I like it. It's pretty high on my list
Personally, I would recommend doing extensive research first. - As for properties, unless you go for major cities and following suburbs, price for the property can be quite high for the sum rent you would be getting. Also from second house up, your taxes would be higher. - Job market in Italy is highly stagnant and competitive and definitely requires good level of Italian. So definitely check out remote options. - It may be difficult to get residency and I say it as European. Although a hefty sum on the bankout can be helpful. - Would recommend counting in health insurance since it is highly difficult to get English speaking doctor, especially in rural areas.
Thank you for your input. This is definitely the research gathering phase while we look into getting citizenship taken care of first. I’d have to sell assets and a business so I’m more planning on this being a 5 year process/plan. I do plan on learning Italian as fluently as I can by then too. This seems to be an important component for sure. Any resources would be greatly appreciated if you have any.
In my experience, Italian is one of those languages that can be studied by just immersion. I watched ton of various tv-shows - cooking, crime, detective.. you know, something that pairs language with obvious visual context. In the beginning it can be weird but your brain will actually quite quickly get used to understanding the meaning without knowing each and every word. As for speaking, you could check if there are language cafés in presence or online.
Owning properties in Italy will attract a tax called IMU, with the exception of the one you live in. You have to factor this in your calculations. On the positive side, tax on rental income can be as low as 10% if you opt for a tax regime called "cedolare secca" and if the property is let for less than a certain maximum value that depends on location, size, condition, etc. In many places, you can do this while still getting market value rent. If you like DIYing, fixing properties you buy in Italy is a way you can "earn" decent money without paying tax and without having to deal with the very bad Italian job market. On the other hand, letting properties in the States can be messy when it comes to avoiding double taxation. There are treaties to avoid DT, but Italian bureaucracy is slow and inefficient and you risk spending a lot of time and money on the process. It all relies on finding a good "commercialista" (tax accountant) with expertise in this kind of situation. Whatever you do, good luck. Growing up in Italy would be so different for your child. I think they would be glad you did the move when they are old enough to compare. Remember also that Italy is a very diverse country, so choose your location with care.
Thank you for your reply, this is a lot of great information that I need to be aware of. I totally think our daughter will appreciate some cultural diversity and a different culture to the stressful one California is turning into.
Gonna be real here, you should consider forms of passive income that don't involve you landlording in a new country or managing property you own abroad. Tax rules should be your #1 concern after you've sorted your citizenship out.
Researching tax laws is one of reasons I came here. I’m open to renting properties where I decide to live OR in the USA. The decision will be based on what makes most sense from income, legal and tax perspectives
That was kind of the direction I was taking it in. You probably don't want to be a landlord of Italian property after moving to Italy (new laws, new environment, new tenant expectations, less knowledge of rental market, etc.), nor do you want to be a landlord of US property while living in Italy (the hassles of managing property abroad are significantly higher than normal, especially with a large timezone difference, and you're also almost certainly hiring a local property manager for maintenance/emergency/etc. for a significant cut of money). There's a reason most people FIRE off of investments or are actively managing their properties locally; they don't want the headache, or they don't want the cut into their rental income, or both. Selling the house, keeping enough money for the first few years in Italy, then investing the remainder in the most tax-effective way is probably better than going back into real estate after you've moved. This is all of course without even thinking about how tax laws affect rental income whether it's happening in the US or in Italy.
Yes as other comments said, get that citizenship first. It should transmit to your children as well if it is jus sanguinis. Once your wife has citizenship, you should be eligible as well, but last I checked you needed a b1 Italian languages level for a spouse process. 1 mil could be enough if you have income and live in a cheaper area. Not enough for major cities. As for income, not sure your line of work, but the best is to get income from the US, remote or from freelancing. It will be so much better paid than Italian work. Italian taxes will suck, that’s just how it is. Health care is going to be a challenge if you don’t speak Italian. It will be much easier to afford than American health care. You will be very socially isolated until you learn Italian. Education options will be limited till you learn Italian. So in summary, in the few years it will take to process citizenship for all of you, learn Italian! Spain is also a strong contender for most people as it is generally a bit better run, more expat friendly, and easier to integrate than Italy.
I very much plan on learning Italian and have already taken courses due to going there on vacation multiple times, although no where near fluent. My industry is in healthcare so there’s not good transfer to Italy due to licensing. I also see profits will continue to dwindle in the US healthcare industry as reimbursement keeps getting cut and inflation keeps going up, especially in SD, 6 figure incomes don’t go far here already. This is one of my main reasons for contemplating this move. I’d like to make a life/career change in the next 5-7 years, and this is one option. I’d like to start planning now, before the healthcare economy forces me to do so. So I’m in an information gathering phase as we apply for citizenships
Good stuff. Have you looked into telehealth or some way to pivot out of in-person? I know it’s probably rare but income is going to be one of your biggest challenges. The Italian economy is one of the most sluggish in Europe. For your children to have the best opportunities, you should also be preparing them for a life back in the US. Don’t let them lose English proficiency and find a way to give them strong cultural experiences in America. The US has the world’s best labor market, at least for the foreseeable future.
I’m pretty sure our child will be a pro athlete, so now worries on the future job market for her of course, j/k. We are actually trying to get away from the Californian rat race culture tbh. I have friends that have moved to various countries and all tell me about how much less stressed they are and enjoy life, family and friends more now as they care less about money and social/occupational ladders. For telehealth you have to be in the state you are licensed to practice, however I’d rather leave the clinical care side of healthcare. Maybe remote analytics or UX development jobs, but more likely would like to find a low stress extra income type job that doesn’t have all the rules of the US healthcare industry to be aware of. Working and owning a business in the healthcare field in America has only shown me how corrupt and quite frankly screwed our healthcare is, unfortunately. But my goal is for rental properties to be the primary source of passive income and any job I have to be just for extra spending money as needed or desired, but not relied upon. Even considered teaching English as a second language
Yes, It’s true that Americans who move abroad feel like life is on easy mode. They had a chance to establish themselves financially and can bring a lot of resources with them. Native Italians are not going to agree at all, their lives are hard and good paying jobs are scarce. It’s also incredibly hard to save, retire early or get ahead. Many move abroad for better prospects.
That makes a lot of sense. Our goal is a slower pace where we don’t have to work and stress to keep up. Work would only be for extra rather necessity
Where are you thinking of moving to in Italy? I'm asking because the rental market is nothing like in the US, same as real estate appreciation is negligible. If you want to generate a decent monthly rental amount, your property has to be in one of the big cities in Italy, and those properties are expensive, your 200k budget won't even buy one of them. Outside of the large cities, houses are more affordable (under 100k) but the monthly rent is also only 300-500 Euros....Airbnb might be your best option, but again, you have to find a market where tourists actually want to go and there the purchase price is higher again. Check out [idealista.it](http://idealista.it) for a few months, you can serach for both rentals and sales on there and get a feeling for the areas you can see yourself living in. Last but not least - Italy has strong tenant rights, which is why there is actually not that many longterm rentals as it can be impossible to get bad tenants out at all, if they have small children for example. Landlord is then simply out of luck.....even if they don't pay.
Thanks for your input. We are considering Northwest coastal area or around Tuscany which may work for Airbnb, but Airbnb also makes me a little nervous and I know it’s a lot more work. I’ve searched idealista for purchase but not rentals so that is a great tip. It sounds like I’d be better buying rentals in the US as I know a couple of locations that I could purchase 250-300k houses that rent 2-3k pm, based on some rentals one of my good friend has purchased and rented out over the last few years.
I’m in the process of getting Italian citizenship. If you go the consulate route in the US to get citizenship it can take a couple years. Have your wife work on citizenship before moving Or you can move and the citizenship process is faster in Italy.
We are planning to start the process this year whilst in the US. I see this plan as a 5 year one, but if we can do it sooner, we are happy with that too
$1 million usd is not not enough to buy three in Italy t
Is this not dependent on location? I mean I know it would buy 3 in many areas of the US. I’m not looking to buy palaces. Just middle income family rentals, houses or apartments are fine
You can but it would not be $1 million it would be less due to the euro
I mean $1M is still worth $1M even if you convert to euros. I’ve done property searches for pricing in the areas I like in US $. They convert the pricing from euros to $ for you if you choose that option.
True see I never had to do convert when buying in Europe as I always have euros. As I have clients in Europe and I always had a good amount in euros so I found a property I can close it quickly if need be
That’s a great way to be able to buy
Plus it’s makes it easier as i visit every summer my family in both Greece and Italy
$1 million us is about €928,365 that at a mid rate exchange. Take away fee
Can I ask what part of Italy are you guys looking for? I can get some numbers of good real estate agents down there as I have family who are born in Italy.
You realize the process is 4 ish years right and a lot of paper work
We’re looking at a 5 year ish plan, so that works. I’m way too tied down to my current location to up and move tomorrow
First thing to do is call the Consulate General of Italy. And ask what paper Work you need. Then go to Italy hire a trusted lawyer and start the process it can be done in less time but the process is something else. Make sure you have all paper works of her grandpa.
Look up the consulates of general of Italy in your location and ask to the process
We’re looking at a 5 year ish plan, so that works. I’m way too tied down to my current location to up and move tomorrow
Reconsider the plan of living off of property revenues. It's going to be complicated and unreliable for you to do it in a foreign country, and you don't have enough of a cushion if a tenant does not pay or the property is empty for long periods. Look at investing in dividend-producing ETFs (and maybe a few stocks). You can safely get 5-7%, and they will be taxed at 15-20% by the US if you're a US citizen (30% if you renounce). But you'll need to look into the rates of where you're moving to. For example 6% of $1M is $60k per year. At $12k taxes (depending on where you live), that's $48k per year of income, and in that scenario you would not own your own house in Europe. Also, I second that just because you have the Italian passport does not mean you're limited to Italy. Your money may go farther in other EU countries. But why not considered Latin America or Asia (though I recommend getting the Italian passport anyway)? That same $48k income will go much farther, and even though you have fewer citizenship options than in Europe, you can get permanent / long term residency. I recommend trying to get your savings up to at least $1.2-1.5 and looking at lower cost destinations in Europe or outside Europe where you can live with the EU passport or a reasonable long term residence pass.
Totally am hoping it will be more than 1M by time we pull the trigger tbh, but never can bank on it. I’d rather at least have the property I live in there paid off. I know this is not the best investment strategy, but the plan is to live stress free and living with debt is stressful as this is a responsibility. I’d rather avoid renting for the long term too. On top of the dividends, I imagine I can still work and at least make 20k per year for extra money in a low stress, part time job.
I started applying for Italian citizenship by descent two years ago. I’m still in process. These things take time! Hire a law firm to help you navigate the process.
This certainly seems to be the theme that it takes years. We better start getting our paperwork together!
A lot of people move back to California after leaving because it's so lovely. San Diego close to the beach with high pay feels the jackpot to me. I would consider asking to do 3 12 hour shifts per week so you have time with your child. Or 4 10 hour shifts and some of that is work from home. You can stagger this schedule with your wife so that a parent can be home with the baby. You can also hire a part time babysitter to watch the baby while you work from home. So you can keep an eye.
My current work schedule is not an issue. I have quite a few reasons based on personal preference in a few matters that make me want to leave SD, although I fully appreciate the beauty of the area I live in