The cost of living in Italy is different between the prosperous north and central regions of Italy, and the comparatively poor south. The cost of living in the major cities is similar to Britain, France and Germany, although sales taxes in Italy are higher than in most other European countries. The Italian government generally chooses to place very high taxes on tangible items that citizens cannot live without, such as houses, cars, gas, and cigarettes, rather than depending upon an income tax, since many people working in Italy do so unofficially. For those who do work officially, the income tax ranges from 15 percent to 45 percent depending on income level. Luxury goods like cars can be expensive, alcohol is less expensive.

It’s difficult to calculate an average cost of living in Italy, as it depends on your circumstances and lifestyle. It’s possible to live frugally in Italy if you’re willing to forego luxuries and live off the land. Shopping for selected ‘luxury’ items (such as stereo equipment, electrical and electronic goods, computers, and photographic equipment) abroad can also yield significant savings.

Luxury and quality products are expensive, as are cars, but wine and spirits are inexpensive. Food costs almost twice as much in Italy as it does in the US, but is similar overall to most other western European countries, although you may need to modify your diet. Markets are a great way to buy fresh produce and save money; most towns have one at least once a week. A bit of people watching in the local town or village square, or a chat with your neighbours, will give you an insight into where the locals do their shopping.

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