Italy’s annual flat tax for wealthy new residents rose to €200,000 in 2024, and a draft proposal aims to increase it further to €300,000 in 2026.
These changes follow Law No. 143 of October 7, 2024, and mark a significant shift in Italy’s appeal to high-net-worth individuals amid broader tax and fiscal reforms.
Key points covered in this article:
- What is the HNWI tax in Italy?
- What are the tax changes for Italy in 2025?
- What is Italy’s 200k flat tax?
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Le informazioni contenute in questo articolo hanno un valore puramente indicativo. Non costituiscono consulenza finanziaria, legale o fiscale e non rappresentano una raccomandazione o una sollecitazione a investire. Alcuni fatti potrebbero essere cambiati dal momento della stesura.
What is the wealth tax in Italy for foreigners?
Italy does not impose a broad wealth tax on individuals in the same way some other jurisdictions do.
Instead, for foreigners and persone con un elevato patrimonio netto there are special regimes—most notably the flat-tax regime for new tax residents—which substitute regular income tax on foreign-source income with a fixed annual amount.
While there are also taxes (for example property taxes, asset taxes) which may apply depending on residence and asset type, the headline incentive for many wealthy foreigners is the fixed annual flat tax regime rather than a large net-wealth levy.
Has Italy doubled tax for foreigners?
Yes. Under the regime often used by wealthy foreigners relocating to Italy, the flat annual tax for new entrants was €100,000 for many years, but on 7 August 2024 the Italian government approved a measure to double that to €200,000 per year for new applicants.
This applies to individuals who become Italian tax residents, have not been resident in Italy for at least nine of the previous ten years, and elect this regime for their foreign-source income.
Existing participants under the older rate are typically grandfathered at the lower amount.
What are the tax changes for Italy in 2025?
Several important updates are relevant for wealthy foreigners in Italy in 2025. These include:
- The flat-tax regime remains at €200,000 for new entrants in 2025.
- Italy’s government has reportedly included in its draft 2026 budget a proposal to raise the flat tax further from €200,000 to €300,000 per year for new entrants from 2026.
- For foreign retirees and others relocating to smaller towns (under 20,000 residents) in southern Italy, a separate regime offers a 7% flat tax on foreign pension/ income for up to 10 years.
- Additional incentive rules remain in force: e.g., the flat tax regime also exempts participants from property-tax (IVIE) and asset‐monitoring reporting (form RW) for foreign assets.
What tax incentives are there for foreigners in Italy?
Wealthy foreigners relocating to Italy can benefit from several attractive incentives:
- With the fixed €200,000 substitute tax, qualifying individuals can shield all foreign-sourced income from ordinary Italian taxation, regardless of amount.
- Family members can also join the regime by paying an additional €25,000 each per year.
- The regime can be maintained for up to 15 years, offering long-term tax certainty.
- Foreign income and assets covered by the substitute tax are exempt from wealth tax and inheritance/gift taxes in Italy.
- Those who prefer partial benefits may instead use the 70% or 90% impatriate regime for employment and business income earned in Italy.
Will there be any tax breaks in 2025 for wealthy foreigners in Italy?
Yes. The existing tax breaks in Italy remain available in 2025 for eligible foreigners.
However, some breaks are under recensione and may change in future years – for example the proposed hike to €300,000 for the flat tax from 2026.
Wealthy foreigners should therefore act promptly to secure the current regime while it is in force, and ensure they meet eligibility conditions (non-residence requirement, relocation timeline, tax-residence status, etc.).
Italy vs EU Countries Tax for Wealthy Foreigners
Compared to other European Union countries, Italy’s tax for wealthy foreigners remains one of the most competitive despite the recent hike from €100,000 to €200,000 under the flat-tax regime.
This fixed annual payment covers all foreign-source income, which can be especially advantageous for individuals with complex global portfolios.
Other EU countries offer similar incentives, but most come with tighter conditions or higher effective taxes:
- Portogallo: The Non-Habitual Resident (NHR) program, once a favorite among retirees and professionals, was phased out for new applicants in 2024, limiting its appeal for new high-net-worth arrivals.
- Grecia: Offers a flat tax of €100,000 on foreign income for up to 15 years, similar to Italy’s original model, but with stricter investment and residency requirements.
- Spagna: The Beckham Law offers a flat 24% tax on Spanish-source income for up to six years, while excluding foreign income from Spanish taxation — a major advantage for globally diversified investors.
- Malta: Operates a remittance-based system where only income brought into the country is taxed, but residency and property purchase requirements can make it more cumbersome.
Overall, Italy’s regime stands out for its simplicity, flexibility, and global tax exemption, giving HNWIs a predictable tax burden and access to full EU residency rights.
However, the increased €200,000 rate and the 2026 proposed hike signal the government’s intent to rebalance incentives while still remaining competitive within the EU’s landscape for mobile wealth.
Is Italy Still Attractive for Wealthy Foreigners?
Yes — Italy remains attractive for wealthy foreigners despite the higher flat tax, though its appeal may narrow to ultra-high-net-worth individuals.
The proposed 2026 increase to €300,000 would make entry more expensive, but the regime still provides unmatched benefits such as full exemption on foreign income, simplified tax reporting, and optional family inclusion.
Compared with similar programs in Switzerland or the UK, Italy’s system remains relatively competitive, particularly for individuals valuing lifestyle, EU access, and estate flexibility over cost alone.
Conclusione
Italy’s evolving tax landscape reflects a broader effort to balance fiscal sustainability with global competitiveness.
The 2026 proposal to raise the flat tax to €300,000 suggests that the era of ultra-low entry costs for wealthy newcomers may be ending.
Still, for many HNWIs, Italy’s lifestyle appeal, EU access, and relative tax simplicity continue to outweigh the rising costs, making it a destination where opportunity and regulation remain closely intertwined.
Domande frequenti
What is the 100k tax rule in Italy?
Initially, the flat-tax regime for new residents allowed payment of €100,000 per year for foreign-source income.
This applied to qualifying wealthy foreigners relocating to Italy under the regime introduced in 2017.
What is the 70% tax rule in Italy?
There is a tax incentive for foreign workers (not necessarily high net-worth ones) in which 70% of their employment income is exempt from tax if they relocate to Italy under certain regions or conditions.
This was part of earlier migrant/returnee incentive programs rather than the main flat tax regime for HNWIs.
How can I avoid double taxation in Italy?
Relocating foreigners can benefit from Italy’s extensive network of double taxation treaties, which help ensure income isn’t taxed twice.
In addition, the impatriate and flat tax regimes offer further exemptions such as not declaring foreign assets for those under the flat tax option.
To claim treaty benefits, individuals typically need to submit proof of tax residency (e.g., a certificate from the Italian tax authorities) and comply with procedural requirements outlined in the specific treaty.
Professional tax planning is essential to maximize benefits and avoid unintended taxation of foreign income or assets.
Why are millionaires going to Italy?
Italy has become a magnet for millionaires because of the favorable flat tax regime, high quality of life, cultural offering, strong property markets (especially Milan and luxury regions), and the fact that other jurisdictions have reduced similar incentives, making Italy comparatively attractive.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
