Italy 2026: Why Global Wealth Is Choosing Italian Residency

A strategic guide to the €300,000 flat tax regime, luxury real estate and wealth structuring for international UHNWIs.

Introduction: A Silent Reallocation of Global Wealth

A quiet but profound transformation is underway in the world of large private fortunes. According to
Henley & Partners, 2026 is projected to deliver the largest migration of wealth on record, with as many
as 165,000 millionaires expected to relocate internationally, up from 142,000 in 2025 and 134,000 in 2024.

This is no longer a marginal phenomenon. It has become the defining mechanism through which capital,
talent and entrepreneurial opportunity are being reallocated among jurisdictions.

For families with substantial international wealth, the question is no longer whether to consider a change
of residence, but where, how, and — most importantly — with what structure.

Italy has emerged as one of the most credible answers to that question. And from January 1, 2026,
the rules have changed in ways that every adviser to UHNWI families needs to understand.

1. The 2026 Italian Non-Dom Regime: What Has Changed, What Has Not

The 2026 Budget Law introduced a material amendment to Article 24-bis of the Italian Income Tax Code,
the cornerstone of Italy’s special tax regime for new residents.

The New Numbers

– Annual substitute tax on foreign-source income raised from €200,000 to €300,000 for the principal taxpayer.

– Family member surcharge doubled from €25,000 to €50,000 per qualifying family member.

– Maximum duration unchanged at 15 tax periods.

– Grandfathering fully preserved for individuals who established Italian tax residency before January 1, 2026.

What Has Not Changed — And Why It Matters

Despite the higher headline figure, the architectural integrity of the regime remains intact. This is the
critical point that international advisers should communicate to their clients.

1. No taxation on foreign-source income beyond the lump sum, regardless of amount.
2. Full exemption from Italian wealth taxes on foreign real estate and foreign financial assets.
3. Full exemption from Italian inheritance and gift tax on foreign-situs assets transferred to heirs during the regime.
4. Waiver of foreign-asset reporting obligations for assets covered by the regime.
5. Italian-source income continues to be taxed under ordinary rules.

The Strategic Read

Italy has not retreated from the UHNWI market. It has done the opposite: it has explicitly positioned
itself in the top tier of European wealth jurisdictions, alongside Switzerland’s cantonal forfait regimes
and Monaco.

The price of entry has risen — but so has the political stability and durability of the framework.
The increase is best read as a sign of confidence: Italy expects the demand to remain, and it has chosen
to monetize that demand rather than restrict it.

2. Why the Timing Matters: A Window Created by Other Jurisdictions

The relative attractiveness of Italy in 2026 is not only about what Italy offers. It is also about what
other jurisdictions have stopped offering.

– The United Kingdom abolished its non-dom regime effective April 6, 2025.

– Portugal replaced its Non-Habitual Resident regime with a substantially diluted successor program.

– Several other European jurisdictions have tightened their preferential regimes under political pressure.

Italy now stands as one of the few remaining major European economies that combines a stable, codified,
long-duration preferential regime with the lifestyle, cultural depth and infrastructure that UHNWI families require.

3. The Luxury Real Estate Dimension: From Investment to Strategic Reserve

Capital relocating to Italy is increasingly anchored to Italian real estate — and the nature of that
anchoring has changed.

Market Data

– Increase in high-end property purchase inquiries year-on-year.

– Average ticket size rising significantly.

– Strong demand originating from abroad, particularly the United States, United Kingdom, Germany and France.

– More than half of properties above €5 million transacted off-market.

– Rome, Tuscany and Milan increasingly prominent among UHNWI destinations.

The Logic Has Shifted

Luxury Italian real estate is no longer primarily understood as a rental-yield asset. It has become a
capital preservation instrument — a tangible, scarce, irreplaceable store of value within a diversified
UHNWI portfolio.

Iconic villas, historic palazzi, lakefront estates and trophy properties are increasingly held in dedicated
holding structures designed to combine asset protection, succession planning and fiscal efficiency.

This is precisely the intersection where our firm operates.

4. The Adviser’s Lens: What Foreign UHNWIs Actually Need

International UHNWIs relocating to or investing in Italy typically require coordinated advice across five
domains. The first mistake families make is to address them sequentially rather than in an integrated plan.

Tax Residency Planning

The flat-tax regime is not automatic. It requires that the individual has not been tax-resident in Italy
for at least nine of the ten preceding tax years, and the option must be formally exercised through the
annual tax return.

Asset Holding Structures

Trusts, foundations, holding companies and family investment vehicles each have distinct tax, succession
and governance consequences in the Italian context. Their interaction with Article 24-bis requires careful
navigation.

Real Estate Acquisition Structuring

Whether the acquisition vehicle should be the individual, an Italian società semplice, a domestic or foreign
SPV, or a trust structure depends on the family’s intended holding horizon, the use of the property,
succession plans and the residence status of beneficiaries.

Succession and Generational Governance

The flat-tax regime offers a highly advantageous succession environment — but only if the family wealth is
properly characterized and the governance documentation is internally consistent.

Compliance and Confidentiality

Italy has rigorous anti-money-laundering and beneficial-ownership disclosure regimes. Discretion is
achievable within the law — but only through structures designed from inception with compliance in mind.

5. Why Paolo Gaeta & Associati

Our practice is built specifically for this profile of client. We are not a tax boutique that occasionally
handles trusts, nor a trust company that occasionally advises on tax.

We operate at the intersection — and that intersection is where the most expensive mistakes are made and
the most durable solutions are built.

What We Offer

– Integrated advisory across Italian and international taxation, trust law, corporate structuring, real estate acquisition and family governance.

– A multi-jurisdictional footprint: Milan, Naples, San Marino, Dubai and Tel Aviv.

– Direct partner involvement throughout the engagement.

– A dedicated compliance arm through Paolo Gaeta & Associati Compliance S.r.l.

– Italian fluency in international wealth dialogue, across common-law and civil-law traditions.

Our Typical Clients

International families with €10 million to several hundred million euros of wealth, multi-jurisdictional
residences, operating businesses across borders, and the need for a single point of coordination among
local advisers in each relevant country.

Paolo Gaeta

Paolo Gaeta & Associati