Italy's cost of living is moderate, with a CPI of 60.6 (NYC = 100). Groceries (63.5) and restaurant prices (62.9) are also in the moderate range, offering reasonable affordability compared to major global cities.

The housing market is considered affordable, with a property price to income ratio of 8.0 years. The rent index is low at 18.8, indicating relatively affordable rental costs, though regional variations exist.

The purchasing power index is 97.5 (NYC = 100), suggesting moderate buying power. While salaries are growing, regional disparities in income and employment opportunities are notable.

Italy has a progressive income tax system (IRPEF) with rates for 2024 ranging from 23% to 43%, plus regional (0.70-3.33%) and municipal (0.0-0.9%) surtaxes. The standard VAT rate is 22%. Property taxes (IMU) apply to second homes and luxury properties, typically 0.4% to 1.06%. Expat incentives offer a 50% income tax exemption for qualifying individuals.

The business environment is characterized by a complex regulatory framework and bureaucracy, which can pose challenges for startups. However, there is a growing startup ecosystem supported by government initiatives like CDP Venture Capital, aiming to foster innovation despite challenges in accessing late-stage funding.

Italy offers a comprehensive social security system, including universal public healthcare (Servizio Sanitario Nazionale - SSN) providing free or low-cost services for residents. The pension system is contribution-based, with a statutory retirement age of 67. Unemployment benefits (NASpI) provide support for involuntarily unemployed workers, with eligibility based on contributions.

Deposits in Italy are protected up to €100,000 (approximately USD 117,285) per depositor under the EU Deposit Guarantee Scheme. The Italian banking system is stable, with improved profitability, stronger capital bases, and reduced non-performing loan ratios, operating under strong ECB oversight.