Italy has long attracted foreign residents with its combination of climate, culture, cuisine, and property values that still look attractive against northern European comparators. In recent years, it has added a powerful financial incentive: a flat annual tax on all foreign-sourced income, replacing the normal progressive Italian income tax on those earnings. The fixed sum has risen over time — it was €100,000 when introduced in 2017, €200,000 for those who transferred their residence between August 2024 and the end of 2025, and €300,000 for new arrivals who take up Italian residence from 1 January 2026 onwards (set by the 2026 Budget Law). Whatever the figure, the principle is the same: a single annual payment in place of tax on unlimited foreign income.
For HNW individuals whose wealth is generated outside Italy — through overseas investments, foreign business interests, or rental income from property abroad — this regime can represent a very significant annual tax saving. This guide explains how it works, who qualifies, what the practical steps are, and what the full picture of moving to Italy looks like.
The flat tax: how it works
Italy's regime dei neo-residenti (new resident regime) was introduced under Article 24-bis of the Italian income tax code (TUIR). The key features as of 2026 are:
What it covers
The annual flat payment — €300,000 for those electing the regime from 1 January 2026 (€200,000 for those who became resident from August 2024 to the end of 2025, and €100,000 for earlier entrants, both grandfathered at their original rate for the remainder of their term) — substitutes Italian income tax on all income and capital gains of foreign origin. This means:
- Dividends from foreign companies
- Interest on foreign bank accounts and bonds
- Capital gains on the sale of foreign investments
- Foreign rental income
- Foreign business profits
- Any other income sourced outside Italy
All of these are covered by a single annual payment (€300,000 for new arrivals from 2026), regardless of how much income is actually earned abroad.
What it does not cover
Italian-sourced income remains subject to ordinary Italian progressive income tax at normal rates (up to 43% at the top). If you earn income from Italian employment, Italian property, or Italian business activities, that is taxed normally. The flat tax covers only foreign income.
The family-member extension
Family members can be included under the same regime for an additional flat sum per person per year. The 2026 Budget Law doubled this supplement from €25,000 to €50,000 per family member for those electing the regime from 1 January 2026 (those grandfathered at the earlier €200,000 rate retain the €25,000 supplement). So a couple electing from 2026 (both with non-Italian-sourced income) would pay €300,000 + €50,000 = €350,000 per year to cover both.
Duration
The regime lasts for a maximum of 15 years. Once the 15-year period expires, the individual either leaves Italy or becomes subject to the standard Italian tax system.
Exclusions
Certain capital gains on "qualifying participations" (broadly, significant stakes in foreign companies) realised in the first five years of the regime do not benefit from the flat tax and are taxed normally. This is an important nuance for entrepreneurs and shareholders with large stakes in foreign businesses — take specific advice before triggering such gains.
Who qualifies?
The eligibility conditions are:
- You must not have been Italian tax resident for at least nine of the ten tax years preceding the year in which you transfer your residence to Italy.
- You must become Italian tax resident (i.e., register your habitual residence or domicile in Italy).
- You must submit an advance ruling request (interpello) to the Italian Revenue Agency (Agenzia delle Entrate), or alternatively simply elect the regime in your first Italian tax return (though the advance ruling provides certainty).
There are no nationality restrictions. UK nationals, non-EU citizens, and anyone with a qualifying prior non-residence history can apply.
Italian tax residency: the rules
Under Italian law, you are considered tax resident in Italy if, for more than 183 days in a calendar year, you are:
- Registered in the Italian civil registry (anagrafe), or
- Have your habitual residence (residenza abituale) in Italy, or
- Have your domicile (domicilio) in Italy.
The first step on arrival is to register with the anagrafe at your local comune (town hall). This formalises Italian residency and triggers tax residency.
Under the UK–Italy Double Taxation Treaty (1988, as amended), tie-breaking rules determine which country has primary residency if both the UK and Italy have a claim. Ensure you have fully severed UK tax residence under the UK Statutory Residence Test before establishing Italian residency, particularly if you retain significant UK ties.
The 7% flat tax for retirees in southern Italy
A separate but related scheme — aimed specifically at pension income — offers foreign pension recipients (including UK state and private pensions) a flat 7% tax on all foreign income if they move to specific municipalities in southern Italian regions with populations under 20,000.
Qualifying regions include Sicily, Calabria, Campania, Sardinia, Basilicata, Puglia, Abruzzo, and Molise. The 7% rate applies for up to ten years and covers all foreign-source income and capital gains.
For UK retirees on modest to mid-range pensions, the 7% scheme may be more attractive than the neo-residenti flat tax, as it is proportional rather than a large fixed sum. However, the geographic limitation to the south and smaller towns means it suits a different lifestyle profile.
Post-Brexit visa requirements for UK nationals
Short stays
UK nationals can visit Italy (and the Schengen Area) for up to 90 days in any 180-day period without a visa.
Long stays
For residency of more than 90 days, UK nationals must apply for an Italian national long-stay visa (visto nazionale di lungo soggiorno) from the Italian consulate in the UK before travel. The relevant category depends on your circumstances:
- Visto per lavoro autonomo: self-employed, freelancers.
- Visto per lavoro subordinato: employed workers.
- Visto per residenza elettiva: for those who can demonstrate sufficient income from pensions, investments, or other passive sources to support themselves without working in Italy. A common route for HNW individuals. The income threshold guidance is approximately €31,000 per year for a single person (higher for families).
On arrival, you must apply for a permesso di soggiorno (residence permit) within eight days at the local Questura (police headquarters), and then register at the anagrafe of your comune.
Buying property in Italy
Italy is one of the most popular countries in the world for foreign property buyers, and the purchase process is reasonably well-structured.
The purchase process
- Proposta d'acquisto: a written offer, usually accompanied by a small deposit.
- Compromesso / contratto preliminare: a preliminary contract binding both parties. The buyer typically pays 10–20% at this stage; if the buyer withdraws without cause, the deposit is forfeited; if the seller withdraws, they return double the deposit.
- Rogito: the final deed signed before a notaio. The balance is paid and ownership transfers.
Acquisition costs
For a resale property (non-first home):
- Registration tax: 9% of the valore catastale (cadastral value, often lower than market value).
- Mortgage registration tax (if applicable): 2%.
- Notary fees: 1–2%.
- Agency commission: 3–4% each from buyer and seller (common in Italy, unlike UK).
For a new build or properties sold by a developer, VAT at 10% (or 22% for luxury properties) applies instead of registration tax.
The 1 euro house phenomenon
Certain municipalities (particularly in Sicily, Sardinia, Calabria, and Abruzzo) sell abandoned properties for a nominal €1 price on the condition that the buyer commits to renovation within a specified period. These schemes attract significant press coverage but carry real risks: renovation costs, planning permissions, and structural issues can be substantial. They suit enthusiastic restorers, not passive investors.
Healthcare in Italy
Italy operates a national health service (Servizio Sanitario Nazionale, SSN) funded through general taxation. Access for residents — including foreign nationals legally resident in Italy — is available once registered with the local ASL (local health authority) and issued with a health card (tessera sanitaria).
EU residents with EHIC/GHIC cards can access emergency care; but for long-stay UK residents post-Brexit, registration with the SSN as a formal resident is the appropriate route. Private health insurance is advisable initially and is well-developed in Italy for supplementary cover.
Practical checklist for moving to Italy
- Obtain your Italian long-stay visa before travel.
- Register at the anagrafe within eight days of arrival (or promptly upon establishing a fixed address).
- Apply for your permesso di soggiorno at the Questura.
- Apply for a codice fiscale (fiscal code, equivalent to a national insurance number) from the Agenzia delle Entrate — you will need this for almost every financial transaction.
- Open an Italian bank account (IBAN needed for utilities, rental contracts).
- Submit the flat tax election in your first Italian tax return or obtain an advance ruling.
- Notify HMRC of your departure and file a P85.
- Review UK pension, investment, and property positions with a cross-border tax adviser.
Compliance caveat
The Italian flat tax regime, visa requirements, and property tax rules are subject to legislative change. The figures and rates above reflect publicly available information as of 2026. This guide is for general information only and does not constitute tax, legal, or financial advice. The flat tax regime in particular has specific conditions, exclusions, and interaction effects with treaty provisions that require individual professional advice before relying on it.
How Global Investments Can Help
Italy's neo-residenti flat tax is one of the most compelling legal tax planning opportunities available to internationally mobile HNW individuals. But maximising it requires careful pre-move planning: ensuring clean non-residence from the UK, structuring the timing of income and capital gains events, and understanding what Italian tax will apply to Italian-source income.
Global Investments works with clients considering Italy as a new base, helping them model the financial impact of the flat tax election, review existing investment structures, and connect with specialist Italian and UK tax advisers. Whether you are considering Tuscany, Lake Como, Rome, or Sicily, our advisers understand both the opportunity and the detail.
Contact us today to explore whether Italy's flat tax regime is right for your situation.
This guide is for general information only and does not constitute financial, legal or tax advice. Rules, fees and regulations change frequently; verify current requirements with a qualified adviser before acting.