I
taly, a long-time haven for the rich and famous, is now attracting an influx of ultra-wealthy individuals seeking to capitalize on its favorable business environment, thriving real estate market, and low tax regime. As other countries crack down on the super-rich, Italy's flat-tax system has become increasingly appealing, with many drawn to luxury living in Milan and the surrounding areas.

    Despite doubling the one-off charge paid by high-net-worth individuals on their foreign income to 200,000 euros ($233,000) in 2024, demand for la dolce vita remains strong. "They operate at a wealth level that's still far above 200,000 per year flat taxation," said Matteo Pella, senior broker at Berkshire Hathaway HomeService. "It's like saying you're paying more for your coffee, but they won't give up on their luxury lifestyle."

    Italy has become one of the top relocation destinations in Europe this year, according to Henley & Partners, with an estimated 3,600 new high-net-worth arrivals so far. These include Egypt's richest man and co-owner of Aston Villa Football Club Nassef Sawiris, and the vice-chair of Goldman Sachs, Richard Gnodde.

    Milan's millionaire boom has sparked a surge in real estate prices across the city and surrounding areas, with property values rising 49% since Italy introduced its flat-tax regime in 2017. Global property consultancy Knight Frank expects Milan's prime real estate market to record a further 3.5% price growth in 2025.

    The trend of millionaire migration is set to continue, as more jurisdictions offer options for the ultra-wealthy. Over the past decade, the number of high-net-worth individuals relocating abroad has almost tripled, reaching record highs in 2024. Countries like France and Switzerland are weighing changes to their tax regimes, while the U.K.'s abolition of its non-dom tax regime has left a gap that other countries are eager to fill.

    Italy's simplicity is part of its appeal, with a one-off payment offering foreign individuals exemption from wider taxes on income and assets for up to 15 years. However, critics warn of worsening wealth inequalities and a potential erosion of the tax base if other countries emulate Italy's scheme. Businesses remain hopeful that the increased activity will ultimately benefit Milan and the wider country.