Trust in national and local institutions is an essential component of democracy. The literature has dealt mainly with the former, while less attention has been given to the latter. This paper advances a novel theoretical approach to inquire about trust in local institutions, which is also used to test national ones. We posit that trust is affected by the perceptions individuals have of the physical space where they live. Both a) the perceived quality of life in the neighbourhood where individuals live and b) the neighbourhood (perceived) peripherality are hypothesized to affect trust in local (and to a lesser extent) national institutions. We test our hypotheses in Italy, over a large representative sample of more than 40.000 respondents. We show that both variables are crucial predictors of local trust, but only the perceived quality of life predicts national trust. Equally important, social, cultural and economic individual capital does not modify the relation.