Quick answer: If a foreign pensioner is choosing between these two towns because of Italy’s 7% regime, the answer is neither. The regime requires residence in a qualifying southern comune below a population threshold, and both towns are above it even after the threshold was widened in April 2026.
Most comparisons of these two towns are about climate and coastline. For one specific and increasingly common buyer, a retiree moving from abroad to take advantage of Italy’s southern pensioner regime, the comparison never gets that far, because the regime disqualifies both.
Why the answer is neither
If the 7% regime is the reason for the move, neither town works. Both exceed the population ceiling, and the search should move to the smaller comuni of the region rather than continue between these two.
If the regime is not the objective, the two towns are a real and interesting comparison, and they differ on almost everything that matters: economy, season, demand base and building stock.
The condition that reverses it: a further widening of the threshold. It moved once, from 20,000 to 30,000, on 7 April 2026. Termoli sits 1,836 residents above the new line and its population has been falling, which makes it the one town in the region where the question is worth revisiting rather than settled.
What the regime does
Article 24-ter of the Italian income tax code offers an optional substitute tax of 7% on all income of foreign source, for a person who transfers their tax residence to a qualifying comune in southern Italy.
| Element | Position |
|---|---|
| Rate | 7% substitute tax |
| Scope | All foreign-source income: pension, dividends, interest, royalties, gains |
| Duration | 10 years |
| Prior residence | Not Italian tax resident in the five preceding tax periods |
| Origin | A country with administrative cooperation with Italy in tax matters |
| Location | A qualifying comune in an eligible southern region |
The scope is the part most people underestimate. This is not a pension regime that leaves the rest of a portfolio alone; it reaches dividends, interest, royalties and capital gains of foreign source, which for a retiree with investments abroad is where most of the benefit sits. The Italian tax authority has confirmed that it extends to proceeds arising on the liquidation of foreign companies.
The threshold and why it moved
The regime originally required a comune of not more than 20,000 inhabitants. From 7 April 2026 that reference was replaced with 30,000 inhabitants, limited to comuni in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia.
That widening brought a substantial number of towns into scope, including places large enough to have a hospital, a functioning high street and reliable services, which is precisely what a retiring couple wants and what the original 20,000 limit tended to exclude.
It did not bring in these two.
| Town | Residents at end 2024 | Position |
|---|---|---|
| Campobasso | 47,547 | Above the ceiling by a wide margin |
| Termoli | 31,836 | Above the ceiling by 1,836 |
Termoli is the interesting case. It misses by a margin small enough that a buyer might reasonably ask whether it will fall inside in future, and its population has been declining: it dropped below 32,000 in the census data published in 2025. That is a question to monitor rather than to plan on, and no purchase should be made on the assumption that a threshold will be crossed.
What to do instead, if the regime is the point
Look at the comunes the regime was written for. Molise is composed overwhelmingly of small towns, and a great many of them sit comfortably inside the ceiling while being within a short drive of both the coast and the regional capital.
The practical sequence is:
- Establish, with an Italian accountant, whether your income profile actually benefits materially from the regime
- Confirm the current threshold and the eligible regions, since this rule has already moved once
- Shortlist comuni by population, then filter by services, healthcare access and connections
- Verify the population figure for each shortlisted comune from official data rather than from a listing
- Only then look at properties, because the address determines the entitlement
Step one is the one that gets skipped. A retiree living on a modest state pension gains little from a 7% rate on foreign income, because the ordinary Italian treatment of a foreign state pension may already be favourable under the relevant treaty. A retiree with substantial investment income gains a great deal. The residence route comparison covers the immigration side, which is a separate question from the tax one.
If the regime is not the point
Then the two towns diverge sharply, and the comparison is worth making properly.
Campobasso is an inland regional capital at altitude, and its economy is higher education, the health service and regional government. Rental demand is institutional and year-round. There is no tourism to speak of. Its distinguishing property question is the age of the building stock relative to the seismic rules, which the Campobasso page sets out in detail.
Termoli is an Adriatic port town with a walled old quarter, a summer season, a ferry connection to the Tremiti islands and an industrial base nearby. Demand is seasonal on the letting side and steadier on the resident side, and the market behaves like a small coastal town rather than like an administrative city; the Termoli page covers it.
- Campobasso: institutional tenants, no season, altitude, colder winters
- Termoli: seasonal letting, a real summer, milder climate, thinner winter economy
- Campobasso: resale to local buyers only
- Termoli: resale to local buyers plus second-home purchasers from inland
Neither is a cheaper version of the other, and a buyer who wants a coastal season should not be looking inland regardless of what the price per square metre says. The Molise guide covers the region as a whole, and the Pescara and Chieti comparison is the equivalent coastal-versus-inland question one region north.
What the two towns cost to hold
Both are inexpensive to buy and neither is free to own, and the running costs differ in ways that matter over a long hold.
Campobasso sits at altitude and its winters are cold. Heating a poorly insulated apartment of the reconstruction era through a Molise winter is a real annual cost, and it is the item a buyer from a warmer country most consistently underestimates. Against that, the town has no seasonal demand and no reason to keep a property furnished and serviced for visitors.
Termoli’s climate is milder and its costs are seasonal in a different way. A coastal property carries maintenance from salt exposure, and a property let seasonally carries furnishing, cleaning and management for the months it is occupied plus standing costs for the months it is not.
- Campobasso: heating is the recurring cost; no seasonal overhead
- Termoli: marine maintenance and seasonal operating costs; milder winters
- Both: condominium charges on stock now several decades old
- Both: IMU on a second home, on cadastral values that are low by national standards
Which one has an exit
This is the question that should decide an investment purchase in either town, and it is uncomfortable in both cases.
Campobasso’s buyer pool is local and institutional. There is no foreign market and no second-home market, so a seller is looking for another resident of the same region. That is a shallow pool and it does not deepen.
Termoli’s pool is wider by a little: local buyers plus second-home purchasers from the inland provinces, who have been buying on this coast for generations. It is still small, and it is seasonal in the sense that viewings and decisions cluster around the summer.
Neither town supports a purchase justified by resale to an international buyer, because that buyer does not come here. A purchase in either should be justified by use, by local letting income, or by a family connection, and a buyer told otherwise should ask who exactly is expected to buy the property next.
The honest summary
For a foreign pensioner choosing a Molise address on tax grounds, the two largest towns in the region are the two that do not qualify, and the widening of the threshold in April 2026 did not change that. The regime was designed to repopulate small comuni, and it does what it says.
For everyone else, the choice is the ordinary one between an inland administrative town and a coastal one, and it should be made on season, climate and tenant base rather than on a tax rule that does not apply. Buyers working at this price level will find the segment described in buying under 200,000 euro, and both towns sit comfortably inside it.
Frequently Asked Questions
An optional substitute tax under article 24-ter of the Italian income tax code, charging 7% on all foreign-source income for someone who moves their tax residence to a qualifying comune in the south. It covers pension, dividends, interest, royalties and capital gains, and it runs for ten years.
The person must receive a pension paid by a foreign entity, must not have been resident in Italy for tax purposes in the five tax periods before the option, must come from a country with which Italy has administrative cooperation in tax matters, and must transfer residence to a comune that qualifies on population in one of the eligible southern regions.
From 7 April 2026 the population threshold rose from 20,000 to 30,000 inhabitants for comuni in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise and Puglia. That widening brought a large number of towns into the regime for the first time.
Because both sit above the new threshold. Campobasso had 47,547 residents at the end of 2024 and Termoli 31,836, so neither qualifies even after the widening. Termoli misses by fewer than two thousand people, which makes it the most conspicuous near-miss in the region.
Neither of the two towns, if the tax regime is the reason for moving. Molise is overwhelmingly made up of small comuni that are comfortably inside the threshold, and the regime is available in a great many of them. The decision becomes which small comune, not which of the two large ones.
No, and attempting it is a poor idea. The regime turns on where tax residence actually is, which is a question of fact tested against where you live, not where a form says you live. Registering in a village while living on the coast is exactly the arrangement the tax authority is equipped to unpick.
For some households it is decisive and for others it is marginal. It applies to foreign-source income at 7% for ten years, which is worth a great deal to a pensioner with substantial foreign investment income and very little to one living on a modest state pension. Run the number before letting it choose the address.
Then the two towns are a straightforward comparison and they are genuinely different. Campobasso is an inland administrative capital with a university and a hospital and no tourism. Termoli is an Adriatic port town with a summer season, a ferry link to the islands and a very different demand pattern.
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