Latest news with #flat tax
Yahoo
6 days ago
- Business
- Yahoo
Millionaires Wanted–How Italy's New Tax Policy Is Turbocharging Its Real Estate Market
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. High-net-worth individuals all around the world searching for a simplified tax code have found what they're looking for in Italy. The country quietly introduced a flat tax in 2017. The super-rich have been flocking there ever since, and they're turbocharging Italy's real estate market. The U.S., the U.K., and most of the world's largest economic powers have a progressive tax code. Under this system, tax bills for individual citizens are based on their earnings. The more the citizen earns, the higher their tax bill will be. Progressive tax codes can be unpopular with high-net-worth individuals for that alone. But they are also notoriously complicated. Don't Miss: The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — $100k+ in investable assets? – no cost, no obligation. Italy's flat tax system is incredibly simple by comparison. No matter how much a high-net-worth individual earns beyond Italian borders, their Italian tax bill would be capped at €200,000 ($231,679) plus €25,000 for each additional family member. That's not the only provision of the Italian tax code that appeals to high-net-worth individuals. Italy's system allows taxpayers to apply directly to its tax authorities for clarity on tax issues before they relocate. That means there won't be any surprises in the form of fines for improper filings or incorrectly reporting income. Italy's plan is proving to be a big hit with the private jet set. According to Forbes, Italy has attracted 3,600 high-net-worth individuals to the country since adopting its flat tax system, and the impact is being felt most prominently in the real estate market. Trending: Accredited Investors: Grab Pre-IPO Shares of the AI Company Powering Hasbro, Sephora & MGM— Forbes also reports that premium real estate in Milan's best neighborhoods is selling for €15,000 per square meter. Newly built apartments with energy-efficient features are fetching €7,250 per square meter. Many of them sell out before developers can complete all the new units. Regions in Southern Italy like Campania, Sicily, and Puglia are also proving to be very popular with well-heeled expats. Once they arrive in Italy, the new arrivals find plenty of reasons to stay. The country possesses a unique combination of scenic beauty, rich history, and a culinary heritage that's famous all over the world. There is an abundance of idyllic locations to suit any taste. Areas like Lake Como, the Amalfi Coast, and the Tuscan hill country have long been vacation destinations for the super-rich. The flat-tax program is convincing many of them to consider making Italy their permanent home. Italy's EU membership also allows permanent residents to enjoy freedom of movement throughout the entire EU. Global hotspots like Barcelona, Munich and Paris are less than a two-hour flight from most of Italy's biggest of the flat-tax program participants are also establishing lucrative businesses inside Italian borders. Forbes reports that 46% of the people who took advantage of the flat-tax program in 2023 declared Italian income and paid regular taxes on €87 million worth of income. That's in addition to the real estate appreciation that long-time Italian landowners are benefitting from. Unfortunately, many Italians are discovering that the rapid real estate appreciation that accompanies an influx of rich expats can be a double-edged sword. Property values are increasing much faster than worker salaries, and builders are mainly concentrating on the more lucrative high-end market. That's creating a housing affordability crisis in many Italian cities. Read Next: This Jeff Bezos-backed startup will allow you to . Image: Shutterstock This article Millionaires Wanted–How Italy's New Tax Policy Is Turbocharging Its Real Estate Market originally appeared on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Forbes
17-07-2025
- Business
- Forbes
Italy's Flat Tax Is Quietly Reshaping Its Real Estate Market
Aerial photo shooting with drone on Milan Center, the central business area of the city with new ... More skyscrapers and iconic Cathedral and square of Duomo While tax reform debates in the UK and the US continue to make headlines, one of the most consequential developments of the past years has played out more quietly – in Italy. The country's flat tax regime, first introduced in 2017 and increased to €200,000 in 2024, is rapidly repositioning Italy as a destination of choice for high-net-worth individuals (HNWIs). And the impact is now increasingly visible in the real estate and construction sectors. Globally, we are seeing record levels of wealth migration. In 2025 alone, more than 142,000 millionaires are expected to relocate, with the UK projected to lose around 16, by contrast, is expected to welcome approximately 3,600 of these HNWIs – a substantial number shift for a country that, until the introduction of its flat tax regime, had not featured prominently in global wealth migration trends Prime Property Demand Is Just the Beginning The most immediate impact has been felt in the real estate market. Milan, Rome, Florence, and lifestyle destinations such as Lake Como and Tuscany are experiencing rising demand for prime residential stock. Milan's residential prices rose 2% in the past year and have increased between 15 to 28% over the last five years, making it both the most dynamic and the most expensive property market in Italy. In the city's prime areas such as Brera and Porta Nuova, prices now exceed €15,000 per square metre. Energy-efficient new-builds average €7,250 per square metre, often selling out before completion. Demand is also accelerating in formerly overlooked districts like Bovisa and Lambrate, where prices rose by as much as 12% in 2025 alone due to regeneration and transport upgrades. However, this does not appear to be just a passing housing trend. Many of those relocating are putting down roots – setting up businesses, moving their families, and enrolling their children in local and international schools. Cities such as Verona, Bologna, and Turin, which have often been overlooked by global buyers, are also seeing more interest. . Developers are responding accordingly, with new investments flowing into Build-to-Rent (BTR) schemes, renovation projects, and new-build developments designed for long-term use. The focus is shifting from lifestyle to liveability – schools, services, infrastructure, and the everyday quality of life. A Predictable Framework, An Evolving Market What makes the flat tax regime so compelling is not just its cost – €200,000 annually on foreign income, plus €25,000 for each additional family member – but its predictability. Individuals can apply for advance tax rulings before relocating, providing rare legal clarity. Between 2017 and 2023, nearly 4,000 people joined the regime, and uptake has since accelerated. In 2023, 46% of participants also declared Italian-source income totalling €87 million. The regime's exemption of foreign-held assets from Italian wealth, inheritance, and gift tax makes it particularly appealing for long-term planning. For family offices, this framework offers stability in a region where tax law unpredictability can often be a deterrent. Real Estate Meets Broader Urban Regeneration The influx of international residents is also fuelling wider infrastructure demand – from international schools and healthcare to digital services and transport. This dovetails with Italy's €194.4 billion National Recovery and Resilience Plan (NRRP), funded by €71.8 billion in EU grants and €122.6 billion in loans. The NRRP is already funnelling €34.5 billion into sustainable mobility, €24.7 billion into renewable energy and waste systems, and €16.9 billion into energy efficiency upgrades for residential and public buildings. Southern Italy is also attracting renewed interest. Regions like Campania, Puglia, and Sicily are now part of the investment conversation. Rich in architectural heritage and natural capital, they offer value – but also regulatory complexity. For developers, this creates both opportunity and friction. For local governments, it signals the urgency of streamlining permitting and improving planning coordination. Challenges Ahead: Managing Growth and Public Perception Despite the momentum, structural challenges remain. Demand continues to outpace supply, especially in Milan's most desirable neighbourhoods, where properties often receive multiple offers and close within weeks. Developers face higher construction costs, lengthy permitting timelines, and increasingly complex energy-efficiency regulations, all of which raise barriers to delivery. Affordability is also becoming a concern. The inflow of international capital is driving up prices, widening the gap between local incomes and housing costs. Without a parallel response on the supply side, Italy risks deepening affordability pressures similar to those seen in other global cities. Administrative bottlenecks compound the issue. Permitting processes remain fragmented, with significant variation across municipalities. For international investors, this lack of consistency can undermine confidence and delay projects. Progress on regulatory reform and planning coherence will be key to sustaining investment. Public perception also matters. While the flat tax has succeeded in attracting wealth, it will only remain viable if it's seen to benefit the country as a whole – not just the few who use it. Clear reinvestment strategies and inclusive policies will be essential to to maintaining long-term support for the policy. Looking Ahead Italy's flat tax was never just about offering a financial incentive. At its core, the policy is meant to bring in people who will stay, contribute, and help reinvigorate the economy – not only in Milan or Rome, but across regions that have seen years of underinvestment. That original goal is now being tested. The increase to €200,000 for new applicants signals that the government still sees the scheme as worthwhile, even as it seeks more revenue. Whether the policy delivers in the long term will depend on what happens next. If Italy wants this early success to last, the focus needs to shift from attraction to integration. Housing must be available where people want to live. Schools, transport, and healthcare need to keep pace. And smaller cities must be given a real chance to benefit too. The flat tax has put Italy on the map for people who could choose almost anywhere in the world to live. Keeping them here – and making that presence count – is now the bigger task.
