Over the past few years, Italy’s flat tax has become one of the most talked-about incentives among global investors and high-net-worth individuals seeking new bases for their wealth and lifestyle.
As tax competition intensifies across Europe, Italy has positioned itself as a discreet yet powerful alternative, combining favorable taxation with an unmatched cultural and real estate heritage. This is especially true within the luxury property market, where fiscal benefits now meet lifestyle excellence.
We explored this topic in depth during one of our Dreamer Talks, analyzing how the flat tax regime reshapes opportunities for foreign investors purchasing luxury properties in Italy.
In August 2024, some terms of the flat tax changed, in particular the threshold, which changed from €100,000 to €200,000. Let’s take a closer look at what a flat tax consists of, what its advantages are, and how useful it can be for international investors who relocate to Italy.
What is the Flat Tax?
Introduced in 2017, Italy’s flat tax for new residents was designed to attract international investors and entrepreneurs with substantial global income. It is a single proportional tax with a fixed rate that applies equally to all taxpayers. Instead of paying taxes on foreign earnings, eligible individuals can opt for a fixed annual amount, regardless of the total income generated abroad.
Key features of the flat tax regime:
- Fixed annual payment: €200,000 (increased from €100,000 in 2024).
- Valid for up to 15 years.
- Family members can be included under specific conditions.
This policy has made Italy one of the most compelling relocation destinations for wealthy investors, particularly from the United Kingdom, Switzerland, and the United States, where tax burdens are often higher.
Since 2021, over 1,300 new residents have chosen to relocate under this scheme, and this number is expected to rise steadily in 2025.
“We have seen an inflow of applications for residency from countries such as Switzerland, Northern European countries, and especially the United Kingdom” – says Filippo Busoni, Dreamer Partner & Managing Director.
How It Works the Flat Tax in Italy: News and Updates
Italy’s luxury real estate market, with its iconic villas, countryside estates, and historic mansions, continues to capture the attention of the world’s super-rich. For many, relocating to Italy is a lifestyle choice and a strategic financial move, offering a refuge from heavy taxation and wealth restrictions in their home countries.
While destinations such as the Cayman Islands or Dubai once topped the list for favorable tax regimes, a new trend is emerging: the world’s elite are now looking to Italy’s flat tax as a smarter, more refined alternative, one that combines fiscal efficiency with cultural prestige.
Read also our related article on the Digital Nomad Visa and Relocation in Italy.
Under the flat tax regime, qualifying individuals pay a fixed annual amount of €200,000, regardless of their total income abroad, freeing their foreign earnings from Italian taxation. The flat tax Italy model is designed to attract High Net Worth Individuals (HNWIs) and Ultra High Net Worth Individuals (UHNWIs) who seek stability, exclusivity, and an elegant lifestyle aligned with strategic wealth planning.
Core flat tax’s benefits include:
- Full exemption on foreign income.
- A flat annual rate independent of global earnings.
- Valid for up to 15 years, extendable to eligible family members.
The results of this tax policy appear to be remarkable, with a significant increase in new residents who have chosen to settle in Italy thanks to the favorable tax regime.
Bankers, entrepreneurs, and global fund managers are among those leading this migration trend. As recent analyses show, Italy’s flat tax is redefining traditional wealth mobility, turning the country into a magnet for luxury property investments and long-term real estate strategies.
Why Are So Many Millionaires Moving to Italy? Find out here.
Italian Luxury Capturing Foreign Investors
Over the past few years, Italy has once again emerged as a global magnet for luxury real estate investors. In the post-pandemic era, the desire for spacious homes surrounded by beauty, privacy, and authenticity has driven international buyers to acquire and often restore historic villas, countryside estates, and heritage mansions set in some of the world’s most breathtaking landscapes.
Italy’s artistic capitals (Rome, Florence, Venice, and Milan) remain at the heart of urban prestige, attracting those seeking architectural beauty and cosmopolitan sophistication. Meanwhile, regions like Tuscany and Sicily are witnessing steady growth in demand for panoramic estates and exclusive retreats, where investment is deeply lifestyle-driven.
Beyond private investors, luxury brands and hospitality groups are increasingly investing in Italy’s heritage properties, transforming historic buildings into boutique hotels, flagship stores, and design landmarks. These initiatives not only elevate the country’s real estate value but also reinforce the enduring prestige of the Made in Italy identity.
At the heart of this phenomenon lies Tuscany, a region that embodies the essence of timeless luxury. Rolling hills, Renaissance cities such as Siena, Pisa, and Arezzo, and an unparalleled quality of life make it a haven for those seeking elite residences and investment-grade properties that blend art, culture, and exclusivity.
Investing in luxury real estate in Italy means securing a tangible asset that combines emotional satisfaction with long-term value. Every acquisition is a bespoke journey, where design, heritage, and personal vision merge to create an exclusive ownership experience.
Read on Dreamer Magazine how Buying a Villa in Italy is A Smart Luxury Investment.
Can Foreigners Buy Property in Italy?
Yes, foreign citizens can buy property in Italy, even if they are not residents, provided that their country has a reciprocity agreement with Italy.
For example, the United States maintains such an agreement, allowing both Italian and American citizens to freely purchase real estate in each other’s countries.
This means that non-EU investors looking to buy property in Italy, whether as a primary residence, holiday home, or long-term investment, can do so with ease, as long as reciprocity exists between their nation and Italy.
For those considering owning a home or investing in high-end real estate, discover our comprehensive guide: How to Buy a Luxury Property in Italy.
Italy continues to top the list of dream destinations for international buyers thanks to its rich heritage, breathtaking landscapes, world-renowned cuisine, and unparalleled lifestyle.
UK citizens, for instance, can still purchase property in Italy regardless of residency status, just as residents from other countries that have established similar reciprocity agreements. For global investors and HNWIs seeking both emotional and financial value, Italy remains one of the most attractive and secure destinations for luxury property investments.
Buying Property in Italy as a UK Citizen
British nationals who were already living in Italy before January 1, 2021 (the end of the Brexit transition period) can still purchase property without requiring a residence permit. However, they may be asked to provide documentation proving their residency rights under the UK Withdrawal Agreement, such as an EU Residence Certificate.
For those relocating after Brexit, Italy remains one of the most attractive destinations for property investment, not only for its lifestyle but also for its favorable tax regime.
Following the March 2024 Budget Reform, the UK government announced the phase-out of its long-standing non-dom tax advantages, a system that, for over 200 years, had allowed wealthy residents to avoid taxation on foreign income.
This shift has encouraged a growing number of HNWI and UHNWI to explore the Italian flat tax regime.
For entrepreneurs, investors, and global professionals, Italy now represents a compelling alternative to the UK, where lifestyle, culture, and wealth management align harmoniously.
Read here for more insights: Italy Tops the Charts for High-End Property Investments.
The End of the Non-Dom Era: Why Investors Are Moving to Italy
In addition to Italy’s flat tax regime, another fiscal mechanism has drawn the attention of wealthy individuals looking to relocate without facing excessive taxation: the res-non-dom (resident non-domiciled) status.
This framework allows foreign residents, including American citizens, to live in Italy without being taxed on foreign income, making the country one of the most attractive destinations in Europe for those seeking both financial efficiency and a refined lifestyle.
However, following the abolition of the UK’s Non-Dom regime, many HNWIs and UHNWIs are now relocating to Italy and other tax-favorable jurisdictions. For these investors, Italy represents not just a tax haven, but a gateway to la dolce vita, art, culture, and long-term real estate appreciation.
Americans Love The Italian Dolce Vita
Americans have always shared a deep love for Italy, captivated by its culture, beauty, and exceptional quality of life. This special bond has led many U.S. citizens to consider buying real estate in Italy, seen not only as vacation residences but also as long-term investments.
Thanks to strong bilateral agreements and a renewed interest in Italian living, more Americans are choosing Italy as their second home, particularly in sought-after destinations such as Tuscany.
Learn more here: Italy is The Ultimate Destination for American Expats.
Investors Are Hunting for Trophy Assets in Italy
In luxury real estate, few opportunities hold the same allure as a Trophy Asset. It is a property so rare and exceptional that it embodies prestige, heritage, and financial strength in equal measure.
In real estate investing, Trophy Assets typically refer to:
- Iconic buildings with architectural or historical significance.
- Prime locations in globally renowned destinations.
- Unique features and exclusivity that make each property truly one-of-a-kind.
For many global investors, these properties are considered the ultimate safe-haven assets: tangible, scarce, and capable of delivering both emotional and financial returns. From vineyard estates that produce premium wines to historic villas and mansions with timeless charm, each investment carries intrinsic and enduring value.
An example may be assets such as vineyards. Indeed, a vineyard producing quality wine, such as Brunello di Montalcino, has obvious intrinsic value because of its uniqueness and exclusivity. These investments are therefore those that offer the best rental yield and profitability. Find out how to invest in a winery in Tuscany.
Foreign investors are increasingly turning to Italy to secure Trophy Assets whose value only grows over time. These are luxury properties that tell a story, set amidst breathtaking landscapes or within prestigious city centers, offering not just ownership, but legacy.
Beyond exclusivity and appreciation, Trophy Assets in Italy also generate steady rental income through high-end vacation lettings. Historic villas, castles, and luxury mansions attract elite clientele, providing consistent revenue streams and reinforcing Italy’s standing as a premier destination for luxury property investments.
Flat Tax and Real Estate Investments in Italy: Time is Now
In a rapidly evolving global landscape, Italy stands out as the new frontier of luxury real estate. It is a country where fiscal advantages and exceptional quality of life come together to create a uniquely rewarding environment for discerning investors.
With the flat tax regime offering stability and transparency, international buyers now view Italy as a strategic hub for wealth diversification and asset preservation.
At Dreamer Real Estate, we’ve embraced this evolution with a fresh, dynamic approach, combining innovation, expertise, and tailored advisory. We guide our clients through every step of the acquisition process. From legal and tax consulting to the curation of exclusive properties, our team ensures a seamless, secure, and fully personalized experience for those investing in Italy’s luxury property market.
Find out how our experts can support you throughout the buying and selling process.
