At a glance
- Italy introduced a lucrative flat-tax scheme in 2017, aimed at attracting world’s wealthy
- Milan has seen an influx of the global super rich
- Italy doubled the tax to €200,000 euros in 2024
- If approved the increase to €300,000 would be a blow to wealthy expats escaping mounting wealth clamp downs
Since 2017, Italy has played a savvy hand in the global game of favourable wealth taxation strategies with a lucrative flat-tax scheme, designed to attract wealthy individuals and dubbed the ‘CR7 rule’ (coined after footballer Cristiano Ronaldo), which allows non-domiciled residents to pay a fixed annual tax of €200,000 ($233,000) on income generated abroad, for a period of 15 years.
Aimed at global high-earners and UHNW families with large international portfolios and assets, the popular tax regime has seen an influx of the world’s wealthy elite moving to Italy, with Milan enjoying a billionaire boom in recent years thanks to exceptional lifestyle and luxury property.
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Many of the estimated 3,600 millionaires that migrated to Italy in 2025 might be reconsidering their move, with la dolce vita becoming less sweet if Italy’s proposed raising of the flat-tax rate by 50% . The measure will fund its 2026 – 2028 budget plan which proposes family friendly tax cuts for lower income workers.
The government intends to increase the annual levy to €300,000 euros from €200,000 euros on foreign-sourced income earned by individuals who transfer their tax residence to Italy, according to officials.
At time of writing Italy’s flat-tax scheme offers
- €200,000/year flat tax on all foreign income
- €25,000/year for each family member
- No wealth tax, no income tax
- Under Article 24-bis of the Italian Tax Code, non-domiciled residents are exempt from foreign property tax and foreign financial assets tax
If approved, the increase to €300,000 would be a blow to wealthy expats seeking to escape punitive tax regimes as other European countries clamp down on their super rich.
Italy is currently home to 115,000 millionaires and 17 billionaires, ranking eleventh in the roundup of the world’s richest cities and third in Europe, according to residency-by-investment firm Henley & Partners’ latest data.
If the tax hike is pushed through, Italy might join other European nations experiencing a millionaire ‘brain drain’ as the wealthy relocate to sunnier tax regimes.
The United Kingdom is the world’s biggest loser when it comes to UHNW drain – dubbed ‘Wexit’, according to Henley & Partners’ data.
A cautionary tale for top-tier countries, the United Kingdom’s dramatic fall from grace with its super rich is a familiar tale woven over the past five years.
10,800 HNWIs were lost in 2024 swelling to 16,500 millionaires in 2025 – the highest single year recorded.
Henley & Partners cites the catalysts as predatory political crosswinds sounded by the Brexit knell and compounded by the closure of the Tier 1 Investor Visa, hikes on capital gains and inheritance taxes, as well as declining economic confidence.
Changes to non-dom tax regimes set out by the Labour government took effect from 6 April, 2025.
A new Foreign Income and Gains (FIG) regime will now apply to those newly arrived in the UK provided they have not been a UK resident at any point in the last 10 years.
Under the new rules, individuals who come to the UK for the first time after April 6, 2025 will have a four-year transitional period where they are not subject to UK tax on foreign income.
Individuals who have been resident in the UK for more than four tax years, or recent arrivals who fail to meet the QNR criteria, are not eligible for the FIG regime, and as such are taxed on an arising basis (i.e. subject to UK tax on worldwide income and gains).
Whispers of a further tax raid by UK Chancellor Rachel Reeves in late November is stirring more unrest among the country’s super rich, with Milan looking even more appealing.
Many of the UK’s super rich are packing their monogrammed bags and heading to Dubai, the US and Switzerland in search of more welcoming taxation set ups.
Another traditional wealth hub, Paris, may also witness a ‘millionaire drain’, as France’s socialist party would look to introduce a so-called Zucman wealth tax as part of plans to boost revenue by taxing the country’s richest individuals.
Named after an idea put forward by French economist Gabriel Zucman, if levied, would impose a 2% tax on the wealthiest 0.01% of people in France – those with over €100 million.
Political woes and tax threats combined have accelerated tax investment flow to perceived havens such as Monaco, Luxembourg and Switzerland, with nervous French entrepreneurs and UHNW families investing record amounts to bulwark wealth.
