Italy has a high cost of living. Taxes are present in almost all forms from small purchases to housing to employment. The government decided to ask for taxes ranging up to 46.25 of a single worker’s income in order to continually provide quality of life and the best in living conditions.
Expatriates will also be asked for more by housing and living taxes. All these consequently created a more stable economic environment for the country. Italy has been inflating steadily over the past five years.
Living in big cities like Rome will definitely be expensive considering that Italy itself is among the top most expensive European Union countries to live in. Taxations are primarily composed of income tax, social security, housing tax and indirect tax.
Overall, Italian taxes rank among the highest in the world. Expatriates may have more opportunities to live comfortably in rural areas. The southern part of the country is not as expensive compared to the luxurious form of the northern area. Immigrants will have to be careful about all aspects to ensure long-term residency.
Food and Drinks Costs in Italy
The average Italian spends around 200 euros on food and drinks every month. Eating out is very expensive wherein medium range restaurants can charge one person 50 to 100 euros while luxurious places charge up to 300 on a three-course meal. These rates vary, as reported in the Italy Expat Forum last February 15, 2009:
“At the risk of sounding overly aggressive, I can only answer “it depends”.
Although there are acres of farmland producing tomatoes, potatoes, bell peppers, ginger, coffee and other raw items every year, taxes will always make them very hard to afford. Italy mainly produces to export since several Italian food products and ingredients can sell as much as three times more. Famous Italian cuisines and recipes have made local herbs expensive even to citizens.
Italy exports cheese, extra virgin olive oil, pasta, pastries, canned tomatoes and Italian vinegar. Meat products are available locally like lamb, pork and beef. Seafood such as fish, oysters, squid and octopus are the most expensive. Breads and pastries are also costly especially when bought from popular shops. As for fruits and vegetables, Italy grows organic ones and distributes widely across Europe, America and Asia. Some of its famous produces are apples, oranges, pears, bananas, carrots and potatoes along with almonds and hazel nuts.
Clothing and Accessories Costs in Italy
Italy offers several of the world’s finest when it comes to clothing and accessories. Fashion designers flock every year to the country to participate in runway shows, reviews and other celebrity events that showcase the latest trends. Dresses, suits, ties, pants and footwear are available in classic, trendy, sporty and several more designs and styles. Italy features the best in private label footwear and ties with big names on the line. The footwear sector provides almost 5% of the GDP. Currently, the clothing and textile industry has been able to produce US$ 29.74 billion in 2008.
The average Italian spends around 200 euros a month on clothing while big spenders have over ten thousand euros as shopping budget monthly. In the heart of Italy people will find all sorts of famous labels that are very expensive. Handbags, jewelry and suitcases are of the finest quality, which explains the hefty price tags. It is possible to get more affordable pieces of clothing and accessories at department stores and flea markets.
Housing Costs in Italy
Cost of housing every month for one person is around 400 euros. This amount includes utilities and water. Gas consumption will be around 200 euros per month. The typical housing unit has one bedroom but there are also larger apartments with three to four bedrooms that will be priced at around 2,500 euros every month.
Luxurious condominiums and apartments are also available charging 10,000 euros at least. These are found in downtown areas and in coastal regions. There are also suburban villages with medium-sized house and lots available for expatriates. The cost will depend on the location and quality with the market sputtering because of the worldwide recession, the Italian property market has stabilized and is projected to recover in 2010 at the earliest.
Living in the city can be very difficult for middle class expatriates. Lower class citizens can successfully live comfortably in rural areas and the countryside. Farmland and cottages or villas are found in these remote places. A room can cost as low as 80 euros every month but immigrants may have problems with road accessibility and additional transportation expenses. Expatriates will also be charged 10% or 20% more if they are staying in urban areas. The additional taxes cover housing and insurance benefits.
Services Costs in Italy
Italy promotes education to all citizens although the government only subsidizes public schools up to the secondary level. Private Catholic institutions are very expensive and only upper class citizens or scholars get to attend. There are several excellent universities in Italy as well and a lot of students come from the United States and other European countries.
Social security services are also provided to those with insurance policies although the taxes are enough to accommodate all citizens with medical needs. Most of the expenses will be subsidized by the government but Italians may pay additional fees for optional services and conditions during rehabilitation. Medications are also provided by the government except for maintenance. Individuals will continue to have deductions in their taxable income until the full amount for treatment or hospitalization is covered.
Housing services are also provided for citizens and expatriates. Home repairs are covered by living insurances. Other utilities, water source, Internet connection and gas consumption are also sponsored by a good number of employers. Company benefits and housing benefits are just some of the ROI provided by the high Italian taxation rates.
One of the tips provided by an expat on Italy Expat Forum last January 9, 2009, says of living in Italy:
“Also, Italians – at least here in the south – take a positive pride in being “furbo” – which translates to “crafty” or “cunning” – so being crafty is sometimes taken as a higher goal than being strictly honest or straightforward about things… Which means you can’t be too careful in every deal – expect an Italian to be trying his or her best to wrangle the most out of you in any situation, if not by being actually black dishonest, not being white honest either – dealing in what Berlusconi calls “shades of grey” – so check the bill before you leave the shop or restaurant, and get a receipt for absolutely everything. Other than all that – it’s really a pleasant place to live – so enjoy!”
Employment Costs in Italy
Generally, Italy needs more skilled workers especially in the construction and health care sector. Health care professionals like nurses, medical transcriptionists, physical therapists and caregivers are in demand due to the rising elderly population. There are also job demands in the fields of mining, tourism, agriculture, art and food production.
Since income tax along with other fees is high, there are also job and insurance benefits provided to all workers. Salaries can significantly increase depending on the employer’s standards. Employees are also protected in the financial sense by the government. At present, tourism, fashion and trade comprise the bulk of Italy’s GDP. Because of the current worldwide economic downturn, the employment rate is estimated to be around 92%, which is a 2% increase but remains among the top worldwide.