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Italy to Raise Flat Tax for High-Net-Worth Residents to €300,000 as Millionaire Migration Surges

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Flag of Italy in Rome, Italy; Italy is set to raise its flat tax for high-net-worth-residents amidst growing millionaire migration.

Italy’s government is moving to increase the special flat tax for wealthy foreign residents from €200,000 to €300,000 annually, marking the second hike in just over a year. The measure, currently in the proposal phase of
the 2026 Budget Law, comes as Italy has emerged as the third most popular destination globally for millionaire
migration, welcoming an estimated 3,600 high-net-worth individuals in 2025 alone.

The proposal signals Italy’s continued commitment to using fiscal policy as a strategic tool for attracting ultra-high-net-worth individuals, even as the country balances revenue generation against concerns about equity and
economic impact.

The Evolution of Italy’s Flat Tax Regime

Flag of Italy in Rome, Italy; Italy is set to raise its flat tax for high-net-worth-residents amidst growing millionaire migration.

Italy introduced its special tax regime for new residents in 2017 under the Renzi government, setting the annual
flat tax at €100,000 for foreign-sourced income. The program became known colloquially as the “norma CR7”
after footballer Cristiano Ronaldo transferred to Juventus that same year, taking advantage of the favorable tax
treatment for his substantial foreign earnings from sponsorships and image rights.

The regime allows individuals who have not been tax residents in Italy for at least nine of the previous ten years
to pay a fixed annual substitute tax on all foreign-sourced income, rather than paying Italy’s progressive income
tax rates, which can reach 43%. The regime lasts for 15 years and provides significant advantages for individuals
with substantial overseas earnings, investments, or business interests.

In August 2024, the government raised the threshold to €200,000 for new applicants through Decree-Law No.
113/2024, published in the Official Gazette on August 9, 2024. Those who had already entered the regime
before that date maintained the €100,000 rate. Family members can also opt into the regime by paying an
additional annual amount—currently €25,000 per person, though the new proposal would raise this to €50,000.

Now, less than 18 months later, the government proposes to increase the base rate to €300,000. According to
the draft Budget Law for 2026 currently under parliamentary review, the increase would apply to new entrants
to the program.

Key Uncertainties in the Proposal

Critical details remain unclear as the proposal moves through Parliament. The government has not yet specified
whether the €300,000 rate would apply only to new applicants or would also affect those who entered under the
€200,000 regime. Similarly, whether the family member rate will indeed rise to €50,000 as indicated in early
drafts, or might be adjusted, remains to be determined.

Perhaps most significantly, there has been ongoing political discussion about tying the flat tax to mandatory
investment requirements in Italy—a condition that does not currently exist. Parliamentary debates have featured
proposals from various parties to require beneficiaries to invest specified amounts in Italian government bonds,
startups, or public interest projects. However, these investment requirements do not appear in the current draft
text of the Budget Law.

The text must still pass through Italy’s Senate, where it can be amended before final approval. Given the
political dynamics and the compressed timeline for budget approval, the final version could differ substantially
from what’s currently proposed.

Italy’s Surge as a Millionaire Destination

The proposed tax increase comes against the backdrop of Italy’s remarkable success in attracting wealthy
migrants. According to the Henley Private Wealth Migration Report 2025, published by Henley & Partners—a
consultancy specializing in citizenship and residency programs—Italy is projected to welcome 3,600
millionaires in 2025, ranking third globally.

Only the United Arab Emirates (9,800 expected arrivals) and the United States (7,500) are expected to attract
more millionaires than Italy. Notably, Italy surpasses Switzerland (3,000), which has long been considered Europe’s premier
wealth destination, along with other traditional havens like Singapore, Portugal, and Greece.

This represents a dramatic shift for Italy. In 2024, the country ranked eighth globally in total millionaire
population with approximately 517,000 individuals holding at least one million dollars in financial assets—
about 1% of Italy’s population, according to Boston Consulting Group’s Global Wealth Report 2025. The influx
of new wealthy residents is expected to bring €21 billion ($21 billion) in total wealth to Italy.

The surge is driven by multiple factors. Globally, over 142,000 millionaires are relocating in 2025. This is the highest
number on record and more than double the rate from a decade ago. Geopolitical tensions, tax optimization
strategies, and quality of life considerations all drive this unprecedented mobility of wealth.

Why Italy Appeals to Global Wealth

Italy’s appeal combines fiscal advantages with lifestyle quality in a unique package. Christian H. Kaelin,
Chairman of Henley & Partners, noted in the firm’s analysis that “when you add up the cost of taxes and
housing, many clients realize that Italy is more convenient than the Principality of Monaco,” despite Monaco
offering zero taxation.

The quality of life factor cannot be overstated. Italy offers world-class cuisine, art, culture, Mediterranean
climate, and landscapes ranging from Alpine peaks to Mediterranean coastlines. For wealthy individuals who
can work remotely or whose wealth derives from passive investments rather than active business operations,
lifestyle considerations often outweigh pure tax optimization.

Milan has become the epicenter of this wealth migration. The city now hosts approximately 115,000
millionaires and 17 billionaires, placing it 11th globally among the world’s wealthiest cities and third in Europe
behind only London and Paris. Milan’s millionaire population has grown 24% over the past decade.

Galleria Vittorio Emanuele II, Milan; Milan has become the epicenter of the wealth migration to Italy, where the flat tax is set to rise.

Among the notable individuals who have relocated to Italy under the flat tax regime are Egyptian magnate
Nassef Sawiris, one of the world’s wealthiest individuals, and Richard Gnodde, former CEO of Goldman Sachs
International. The program has particularly attracted wealthy individuals from the United Kingdom (fleeing
recent tax increases), France, Switzerland, Brazil, Mexico, Belgium, Germany, Norway, and the Middle East.

Italy’s Eighth-Place Global Ranking

Italy’s success in attracting new millionaires comes as the country maintains its position as the eighth wealthiest
nation globally by total financial wealth. According to Boston Consulting Group’s 2025 analysis, Italy holds
approximately $6.9 trillion (€6,900 billion) in total financial wealth, though this represents a slight 1.1%
decrease from 2023 due to challenging economic conditions.

The composition of Italian wealth shows 40% allocated to stocks and mutual funds, 25% in deposits and
currencies, 18% in life insurance and pensions, and 8% in bonds. BCG projects Italy’s financial wealth will
grow to $9.455 trillion (€9,455 billion) by 2029.

Significantly, Italy also offers extremely favorable inheritance tax treatment—just 4% on estates, among the
lowest in Europe. France, Germany, and Spain impose inheritance taxes exceeding 30%, making Italy
particularly attractive for multi-generational wealth planning.

The Debate: Economic Stimulus or Fiscal Inequality?

The flat tax regime has generated intense debate in Italy. Supporters argue that attracting wealthy residents
stimulates the real economy through consumption, investment, and job creation. They point to increased tax
revenues—Italy’s Court of Auditors (Corte dei Conti) reported that the regime generated approximately €315
million between 2020 and 2023 from roughly 4,000 participants (including family members).

Proponents also note spillover effects: wealthy residents purchase luxury real estate, employ local staff,
patronize high-end restaurants and services, and sometimes invest in Italian businesses. The luxury real estate
market, particularly in Milan, has boomed even as the broader housing market contracted 13.2% in 2023. Properties above €2 million have shown consistent growth.

Opposition

Plaza in Rome, Italy; Italy is set to raise its flat tax for high-net-worth individuals.

Critics raise several objections. The Court of Auditors expressed concerns about transparency and
accountability, noting difficulties in tracking actual economic benefits and verifying the regime’s real impact on
Italy’s economy. There’s also worry about whether flat tax recipients actually invest meaningfully in Italy or
simply use it as a low-tax residence while their economic activities occur elsewhere.

Labor unions, including CGIL, have characterized the regime as creating a “diritto di censo” (census-based
rights)—a system where legal benefits depend on wealth rather than equal application of law. Critics note that
most beneficiaries are executives and entrepreneurs who could contribute to Italy’s tax base through normal
progressive taxation.

Perhaps most contentiously, the regime has contributed to soaring housing costs in Milan and other desirable
locations, pricing out middle-class residents. When wealthy foreigners purchase luxury properties and the
government simultaneously reduces their tax burden, critics argue this creates a two-tier system: one set of rules
for ultra-wealthy foreigners, another for ordinary Italian taxpayers.

European Context: Italy’s Contrarian Position

Italy’s strategy stands in stark contrast to trends elsewhere in Europe. Spain eliminated its golden visa program
in April 2025 and is now projected to experience its first net outflow of millionaires. France and Germany,
lacking comparable incentive programs, have entered the global top-ten list for millionaire departures.

The United Kingdom has seen the most dramatic exodus. Henley & Partners projects the UK will lose a record
16,500 millionaires in 2025—the largest net outflow ever recorded since the firm began tracking wealth
migration a decade ago. The UK recently eliminated its “non-dom” status that had allowed wealthy foreign
residents to avoid UK taxes on overseas income.

Even traditionally stable wealth havens are showing vulnerability. Ireland expects to lose 100 millionaires,
Norway 150, and Sweden 50—all experiencing net outflows for the first time in recent memory.

Against this backdrop, Italy’s approach—maintaining a clear, stable, and competitive regime—has proven
remarkably successful. As Kaelin noted in Henley & Partners’ analysis, Italy sends “a clear message to global
investors: the country welcomes their capital and the economic energy they bring.”

The Path Forward

The Budget Law containing the proposed €300,000 flat tax is expected to be debated in the coming weeks. The
Council of Ministers discussed the draft on October 17, 2025, with Minister of Economy Giancarlo Giorgetti
indicating the budget would total approximately €18 billion in new measures for 2026.

Several factors will influence the final outcome. Forza Italia, one of the governing coalition parties, has pushed
for investment requirements as a condition for accessing the flat tax. Democratic Party opposition members
have criticized the regime as creating inequality, though they have not proposed eliminating it entirely. Some
lawmakers have suggested the government “could have dared more”—meaning even the €300,000 rate might
be conservative given demand.

One consideration weighing on policymakers: stability and predictability matter to ultra-wealthy individuals
making long-term residency decisions. Raising the threshold twice in 18 months risks creating an impression of
instability. As the IMI Daily analysis noted, “increasing the threshold again after only one year could undermine
confidence in the stability of the law, making the regime appear unpredictable and therefore less appealing to
foreign individuals who value long-term certainty.”

However, the doubling from €100,000 to €200,000 in 2024 produced no apparent decline in demand—quite
the opposite. Italy’s ranking as the third-most-popular destination for millionaires in 2025 came after the
increase took effect, suggesting the regime remains highly competitive even at higher price points.

Whether the €300,000 rate becomes law, gets modified, or faces rejection entirely will become clear as
Parliament completes its budget review in the coming months. What’s certain is that Italy has successfully
positioned itself as a leading destination for global wealth migration, and the government appears committed to
maintaining that status—even if the price of entry continues to rise.

Written by Daniel Atz, Citizenship.EU Founder.

For more news and updates on matters of Italian citizenship and residency, follow along with Citizenship.EU blog posts.

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