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Italy Doubles Flat Tax for Wealthy Foreigners to €200,000 · IMI Podcasts

• 0:00
  SPEAKER_00: The Italian government has doubled the annual flat tax for high net worth individuals who transfer their tax residency to Italy from 100,000 to 200,000 euros.
• 0:10
  SPEAKER_00: The government presented the draft omnibus decree, which includes the measure, to the Council of Ministers who approved it on Wednesday, August 7th.
• 0:19
  SPEAKER_00: Madalena Montero of Liberty Legal believes even at a flat tax rate of 200,000 euros, the regime remains attractive to high net worth individuals.
• 0:29
  SPEAKER_00: She notes that this tax regime goes beyond local income tax as quote, individuals who opt for it will not pay personal income taxes on any non-Italian source income, excluding capital gains realized upon the disposal of certain shareholdings during the first five fiscal years of the eligibility of the flat tax regime, as well as financial assets and property held abroad, end quote.
• 0:53
  SPEAKER_00: The current situation in Europe is causing a strong demand from high net worth individuals for more favorable tax regimes, with Italy among the frontrunners.
• 1:03
  SPEAKER_00: Montero attributes this to, quote, the demise of the UK non-DOM regime, as well as the political results of the French elections, end quote.
• 1:12
  SPEAKER_00: David Lesperce of Lesperns and Associates notes, quote, by doubling its lump sum annual tax payment, Italy has recognized that their previous rate cast too wide a net, end quote.
• 1:24
  SPEAKER_00: He believes this price increase will still be desirable to high net worth and ultra high net worth individuals, with the only potential loss being the mass affluent market.
• 1:34
  SPEAKER_00: Lesprince adds that, quote, this tax burden prices Italy between Switzerland and Greece in the eyes of the mobile wealthy, which is its more natural market position, end quote.
• 1:44
  SPEAKER_00: IMI Pro members can read all about European special tax regimes in our 11 special regimes for low tax living in high-tax Europe.
• 1:52
  SPEAKER_00: Report available in our Pro Members Lounge.
• 1:54
  SPEAKER_00: Since the Renzi government introduced the flat tax in 2017, the number of wealthy individuals transferring their tax residence to Italy has steadily increased, reaching nearly 1,000 in 2021.
• 2:07
  SPEAKER_00: This influx has significantly impacted the Milanese real estate market, with a notable increase in ultra-high net worth individuals purchasing penthouses in Milan as their primary residences, according to Knight Frank's Wealth Report 2024.
• 2:23
  SPEAKER_00: The Court of Auditors reported that payments related to the preferential tax regime for new residents in Italy reached approximately 254 million euros between 2018 and 2022.
• 2:35
  SPEAKER_00: However, the court noted that the government had not conducted specific surveys to evaluate the measure's effectiveness in promoting investments in Italy, as required by the 2017 budget law.
• 2:49
  SPEAKER_00: The doubling of the flat tax may curb the rush of foreign millionaires to Italy, potentially also impacting the luxury real estate market in cities like Milan.
• 3:00
  SPEAKER_00: This episode first appeared as an article by Ahmad Abbas on IMIDAily.com.
• 3:06
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