Italy — a perennial favourite of the rich and well-known — is attracting a new wave of ultra-wealthy arrivals trying to benefit from its investor pleasant atmosphere, thriving actual property market and low tax regime.
As many different international locations clamp down on the super-rich, Italy has been bucking the pattern; its accommodative flat-tax regime has enticed hordes of massive spenders drawn to luxurious residing and Milan’s more and more bustling enterprise scene.
And regardless of doubling the one-off cost paid by high-net-worth people on their overseas earnings to 200,000 euros ($233,000) in 2024, this has completed little to detract demand for la dolce vita.
“They operate at the wealth level, which is still way above 200,000 per year flat taxation,” Matteo Pella, senior dealer in Berkshire Hathaway HomeService’s actual property agency, advised CNBC.
“It’s like saying: Oh, you’re paying for your coffee now. Today it’s two euros, tomorrow it’s going to be four euros. You’re not going to give up on your coffee.”
Italy has turn out to be a high relocation vacation spot for the rich in Europe this yr, in keeping with Henley & Partners, which markets citizenship and residency-by-investment schemes.
Though the millionaire migration figures have raised some questions, and international wealth flows are notoriously tough to trace, a variety of high-profile figures have made the transfer to Italy over latest months. These embody Egypt’s richest man and co-owner of Aston Villa Football Club Nassef Sawiris, and the vice-chair of Goldman Sachs, Richard Gnodde.
The whole variety of new high-net-worth arrivals in Italy to date this yr may very well be as excessive as 3,600, in keeping with Henley & Partners estimates.
Milan’s millionaire boom
Italy’s flat-tax regime was launched in 2017 as a part of a wider push by the then center-left authorities to draw overseas buyers whereas encouraging homegrown expertise to return to the nation following the euro zone debt disaster.
That, in flip, has sparked a new wave of companies trying to cater to the recent wealth inflow, significantly in the nation’s monetary and style hub, Milan. Among these are newly opened members membership The Wilde and, previous to that, Casa Cipriani.
“We really thought it was a good time to come back to Italy,” Anna Cipriani, director of membership at Casa Cipriani Milano, advised CNBC of the group’s 2022 opening.
“Milan has evolved a lot over the years,” she stated. “Before, it used to be known more for its industrial character and, of course, the fashion houses, while over the last few years it became more and more attractive also for creatives, for investors and for [an] international crowd.”
Shoppers stroll by means of the Galleria Vittorio Emanuele II procuring gallery.
Picture Alliance | Getty Images
Italy’s rich arrivals, in the meantime, have led to a surge in actual property costs throughout among the nation’s most fascinating areas, from Tuscany and the Italian Riviera to cities comparable to Rome, Venice and Florence. Milan, and the encircling lakes area, nevertheless, have emerged as a agency favourite.
“We are at all-time high prices at the moment,” stated Pella, who relies in BHHS’ Lake Como workplace.
“In five years, we had an increase [of] double-digit percentages. For the upcoming years, we’re probably going to look at a steady 3% to 4% type of increase here in Lake Como.”
Property costs in Milan have risen 49% for the reason that nation’s flat-tax regime was launched in 2017, in comparison with 10.9% throughout the remainder of Italy’s massive cities, in keeping with actual property group Tecnocasa. Global property consultancy Knight Frank now expects town’s prime actual property market to report a additional 3.5% value development in 2025.
“It’s about those who can afford it, because prices are not necessarily down to their street market logic as an investment,” Pella stated.
“They like a property with their guts. Then they do a little bit of math, of course, but they’re ready to spend and sometimes to overspend just to secure a one-of-a-kind view or a one-of-a-kind position.”
UHNW migration
Millionaires have been migrating in droves to new residences, as increasingly more jurisdictions supply choices to these keen to pay.
Over the previous decade, the variety of high-net-worth people relocating overseas is estimated to have virtually tripled, reaching record highs in 2024.
That pattern seems set to proceed in 2025 and 2026, as a divide deepens between international locations searching for to draw the uber-rich and people clamping down in a bid to fight perceived inequality.
A view of Lake Como, Italy’s third-largest lake, situated in the northern Lombardy area.
Anadolu | Getty Images
France has deliberated increasing its wealth tax, whereas Switzerland is weighing new modifications to inheritance tax.
Meanwhile, the U.Okay. in April abolished its over 200-year-old non-dom tax regime, which exempted rich foreigners residing in Britain from paying U.Okay. tax on their abroad earnings and features. It follows an outflow of London-based banks and financiers to different European capitals, comparable to Milan, following the 2016 Brexit vote.
That has left different international locations trying to fill the hole.
“There are countries literally around the world coming to us and saying: ‘We want the U.K.’s millionaires and billionaires. What can we do? How can we bring them to our country?'” Stuart Wakeling, managing companion at Henley & Partners U.Okay., stated.
While such citizenship and residence regimes differ vastly, and may embody stringent funding necessities, a part of the attraction of Italy’s system is its simplicity. The one-off fee gives overseas people, or nationals who’ve lived abroad for a minimum of 9 years, exemption from wider taxes on earnings and belongings for as much as 15 years.
Worsening wealth divides
Italy’s new surge of arrivals has however raised questions in regards to the impression on the broader economic system.
Some have warned of worsening wealth inequalities, with the general tax take from the regime minimal in comparison with the nation’s general deficit, and far of the newly generated wealth concentrated in particular areas.
Meanwhile, critics counsel that makes an attempt to emulate the scheme elsewhere might result in a race to the underside and an erosion of the tax base.
Still, companies say they’re hopeful that the elevated exercise and new job creation in industries from finance and personal fairness to hospitality and companies will in the end reap advantages throughout Milan and the broader nation.
“It’s kind of a wheel, you know, that keeps rolling. You have all these people moving in and you have all these hotels opening and you have more and more people that then decide to come to town because now that they think about it more,” Cipriani, from non-public members membership Casa Cipriani Milano, stated.
“When you have a lot of investments into a city, the economy creates more job opportunities also for the people.”
— CNBC’s Gaelle Legrand contributed to this report.