Retire in Spain, Portugal or Italy: the map after NHR

The map just changed: Portugal closed the door, Italy widened it

For a decade, 'retire in Iberia' meant Portugal's NHR and its 0–10% on foreign pensions. That era is over: NHR closed to new applicants (the transition window ended 31 March 2025) and its successor, IFICI, is built for scientists and startup hires — pension income is explicitly excluded. Italy moved in the opposite direction: its 7% flat tax on all foreign income for retirees settling in southern municipalities (art. 24-ter TUIR) was expanded in April 2026 to towns of up to 30,000 inhabitants, adding 74 new eligible municipalities, for up to ten years. Spain, as ever, offers retirees no special regime at all — and is still, for many profiles, the rational choice. The arithmetic explains why.

Three systems, one retirement

Read the table twice and the cliché inverts. On pension income alone, Italy's 7% wins outright — if you accept the geographic condition, which is the regime's real price: the eligible towns are precisely the ones young Italians left. Portugal, the default recommendation of a thousand blogs, is now the worst of the three for a new pensioner: full progressive rates with no compensating regime. And Spain's 'no regime' turns out to be more competitive than its reputation — the over-65 allowances keep modest pensions at gentle effective rates, and the regional bonuses on wealth and inheritance do quietly what other countries need special regimes to do loudly.

What the headline rates hide

Three fine-print items decide real cases. First, duration: Italy's 7% expires after ten years and the cliff back to progressive rates lands exactly when moving again is least attractive; Spain's allowances never expire. Second, scope: Italy's regime covers all foreign income including dividends and gains — a retiree with a large portfolio saves far more than the pension arithmetic suggests, and the foreign-wealth-tax waiver compounds it. Third, the estate: for wealthy couples planning inheritance, Spain's regional near-exemptions (a child inheriting €500,000 pays roughly zero in most regions, as our inheritance guide shows) compete with Italy's mild 4% and beat Portugal's 10% stamp duty for non-immediate family. There is no universal winner — there is a winner per profile.

The analysis

The honest matrix: modest pension, wants cities and infrastructure — Spain, and pick the region for the estate, not the income. Large pension or portfolio, flexible about geography — Italy's 7% is currently Europe's best legal deal for retirees, with a ten-year clock ticking from day one. Portugal — only if the decision was never fiscal, because since April 2025 it simply is not. The deeper lesson is about regime risk: NHR's abrupt death stranded thousands mid-plan, and Italy's regime has already changed twice in five years. Spain's boring, regime-free stability — seventeen regional variations notwithstanding — is itself a feature: what was never granted cannot be revoked.

For the Spain-curious, the practical next step is regional: the same retiree balance sheet produces radically different outcomes between Madrid, Valencia and Asturias once wealth and inheritance enter. The regional comparator and the wealth-tax guide turn this article's map into your numbers.