As Italy emerges as considered one of Europe’s prime locations for the super-rich, beneficiant tax breaks are simply one of many components driving the development.
With its political and financial stability, sturdy forex and beneficial tax regimes for high-net-worth people, Switzerland has lengthy been Europe’s prime vacation spot for millionaires.
But there are indicators that issues could also be starting to vary.
Italy is anticipated to be Europe’s prime relocation vacation spot for millionaires in 2025, in keeping with a latest report by funding and citizenship consultancy agency Henley & Partners.
The agency’s 2025 wealth circulation forecasts estimate that, out of the over 142,000 millionaires anticipated to relocate worldwide, round 3,600 could have chosen Italy as their new dwelling by the tip of the 12 months.
This is anticipated to make Italy the world’s third hottest vacation spot for millionaires, rating behind the United Arab Emirates (+9,800 millionaires in 2025) and the United States (+7,500), however forward of Switzerland (+3,000) and Saudi Arabia (+2,400).
Henley & Partners figures additionally present that Italy’s millionaire inhabitants grew by 20 % between 2014 and 2024, rating decrease than Switzerland (+28 %) however considerably larger than Germany (+10), France (+7), and Spain (+3).
As increasingly more milionari transfer to Italy, what precisely is behind the nation’s rising attraction amongst excessive earners?
‘CR7’ flat tax
Italy’s particular flat tax on overseas revenue is basically thought-about the principle driver for the nation’s enhance in fiscal attractiveness in recent times.
The fiscal regime, which is sometimes called the ‘CR7 tax’ or ‘CR7 rule’ after former Juventus footballer Cristiano Ronaldo, permits rich foreigners relocating to the nation to pay a hard and fast tax of €200,000 on any revenue generated overseas for a interval of 15 years.
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This grants excessive earners financial savings of tens and even a whole lot of hundreds of euros, because it signifies that all of their overseas revenue, be that from lively or passive sources (as an illustration, picture rights, capital beneficial properties or inheritances), isn’t topic to Italy’s normal revenue tax Irpef, which applies a charge of 43 % to earnings over €50,000.
The regime, which is obtainable to anybody who’s lived overseas for at the very least 9 of the earlier ten years, can be prolonged to the excessive earner’s instant members of the family for an additional €25,000 on their yearly revenue tax invoice.
End of the UK’s ‘non-dom’ regime
First launched by Matteo Renzi’s centre-left authorities in 2017 to draw overseas buyers and encourage Italians overseas to return to the nation, Italy’s flat tax scheme attracted solely a modest variety of candidates within the years instantly following its launch.
According to Italy’s Ministry of Finance, solely round 4,000 individuals opted for the regime between 2017 and 2023.
The incentive, nevertheless, has gained momentum in latest months, with the abolition of the UK’s ‘non-dom’ tax standing reportedly prompting many excessive earners to up sticks and transfer to Italy in the hunt for extra beneficial tax breaks.
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Under modifications enforced on April sixth, the UK now not permits residents whose everlasting dwelling (or domicile) is exterior the UK to keep away from paying revenue tax on overseas revenue or property situated overseas.
Following the reform, plenty of high-profile figures, together with Aston Villa proprietor Nassef Sawiris, Goldman Sachs vice-chair Richard Gnodde and Italian investor Elio Leoni-Sceti, have moved to Italy from the UK, with the northern metropolis of Milan rising as the popular vacation spot.
“Milan is changing into a mini London,” Roberto Magaglio, a personal advisor at world actual property agency Engel & Volkers, informed The Telegraph in June, citing town’s luxurious sector and bustling enterprise scene among the many predominant components behind its recognition with rich foreigners.
More just lately, a senior banking government in Milan informed The Financial Times town had seen “an explosion of arrivals” in April, because the UK’s guidelines for non-domiciled residents got here to an finish.
Golden visas
Although the flat tax scheme is thought to be the principle purpose for Italy’s rising fiscal attraction, specialists consider there are different components at play.
In specific, Italy is considered one of a handful of EU nations nonetheless providing a golden visa programme, granting residency rights to rich non-EU nationals in alternate for main funding within the nation.
READ ALSO: Is Italy’s ‘golden’ visa nonetheless out there in 2025?
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Although plenty of EU states have just lately restricted or scrapped golden visa choices following stress from the European Commission, Italy has given no indication to date that it needs to finish the scheme.
Jacopo Zamboni, Managing Partner at Henley and Partners, informed The Local in February that “so long as the Italian investor visa stays versatile and presents clear pathways for funding, it’s prone to proceed being a horny possibility for rich people.”
According to Il Corriere della Sera, Italy’s golden visa is the most well-liked route into the nation for non-EU excessive earners seeking to declare the ‘CR7’ flat tax.
Low inheritance taxes
Italian inheritance taxes are additionally believed to play a significant position within the nation’s monetary attractiveness.
Italy’s imposta di successione is likely one of the most beneficial inheritance tax regimes in Europe, as direct-line heirs get pleasure from a €1 million allowance below which no tax is due, with a 4-percent tax due on the half exceeding €1 million.
Italy’s inheritance tax has lengthy been the goal of criticism, with critics arguing that it hurts public funds in considered one of Europe’s most indebted nations and fuels inequality.
READ ALSO: EXPLAINED: How Italy’s inheritance tax works
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That stated, Prime Minister Giorgia Meloni’s authorities, which enjoys a cushty majority in parliament, has given no indication to date that it intends to tighten the present inheritance legal guidelines.
Any main modifications to Italy’s inheritance system are at present seen as unlikely below Meloni’s administration.
