The cost of living in Italy can fluctuate greatly depending on whether expats live in the north or south. The northern part of the country tends to be much wealthier than its southern counterpart. Prices in big cities such as Milan and Rome are considerably higher than those in rural areas, and this is largely thanks to tourism.

When budgeting, expats should bear in mind that Italy consistently ranks near the higher end of the cost-of-living indexes for Europe. Reflecting this, in the 2023 Mercer Cost of Living Survey, Milan, Italy's most expensive city, ranked 49th while Rome ranked 59th out of 227 cities.

Cost of accommodation in Italy

Accommodation is a large expense, usually consisting of a quarter of an expat's monthly budget. Depending on where one lives in Italy, property prices and rentals will vary considerably. To rent an apartment in Milan might cost double what the same apartment would cost in Naples. Even more shockingly, a small apartment in Rome can cost up to three times what one would pay in a rural area for an apartment of the same size.

Increasingly, there has been a demand for retirement and second homes from both Italians and expats, as there are still many rural properties offering excellent value for money. The cost of living in these more remote parts is much lower than it is in the city centres. One can live quite frugally there compared to other parts of Europe.

Cost of transport in Italy

The cost of private transport can be incredibly high. Italy has one of the world's highest prices per litre of fuel. Buying a car is expensive, as is insurance, which is also notoriously slow in paying out claims.

Public transport, on the other hand, is much more affordable. Buses and subways are reasonably priced. For regional travel, expats who can spare a little extra time should definitely avoid Eurostar trains, as they can be double or even triple the price of the slower above-ground trains.

Cost of schooling in Italy

If parents choose to send their children to public school in Italy, costs will be low. Like local children, expat children can attend public school for free up until the end of primary school. Thereafter, a small fee is paid at the start of each year. Extras such as textbooks will also need to be purchased.

That said, if expats will be sending their children to a private or international school, they should expect above average costs – particularly at international schools. If possible, expats should try to negotiate an education allowance as part of their relocation package to cover these costs.

Cost of food and clothing in Italy

Buying local and in-season produce is a reliable way to save money, while purchasing imported products from home will be expensive.

While Italy is famous for its stylish designer clothing, it's not necessary to spend a huge amount of money to be well-dressed. Locally made clothing from chain outlets will be much cheaper than the designer goods that Italy is famous for.

However, factory outlets, which are plentiful in Florence in particular, sell designer clothing at slightly discounted prices, and the end-of-season sales in January and July are a good time to do a bit of bargain hunting.

Cost of eating out and entertainment in Italy

The cost of eating out largely depends on the kind of restaurant and its location. Restaurants in touristy areas or close to tourist attractions will invariably be pricier than other, less conveniently located restaurants.

Tickets to the theatre are not usually cheap, and entry to anything considered a tourist attraction (for example, famous museums and galleries) is sure to be expensive.

Cost of living in Italy chart

Note that prices may vary depending on location and service provider. The table below is based on average prices in Milan for January 2023.