The flat tax for new residents has increased to €300,000 per year starting January 1, 2026. Anyone transferring their tax residence to Italy today will therefore pay a flat rate 50% higher than in 2025. Furthermore, the tax for each family member included in the regime will double: from €25,000 to €50,000.
This is the third increase in less than ten years. The regime began in 2017 at €100,000, increased to €200,000 in August 2024, and is now €300,000.
One point, however, is overlooked in many articles on the topic. The new thresholds apply only to those who transfer their tax residence on or after January 1, 2026. Those who exercised the option before that date will continue to pay the amount in effect at the time of enrollment for the entire remaining duration of the regime. The acquired right therefore remains intact.
Why Italy attracts international wealth
The increase has caused a stir, especially in London. In April 2025, the United Kingdom abolished the Non-Dom after nearly a century of existence. In its place was the FIG (Foreign Income and Gains) regime, which guarantees exemption on foreign income for only four years.
Tens of thousands of high net worth individuals found themselves exposed to Britain's global tax burden. As a result, they began to look elsewhere.
Italy was the first to intercept that flow. Even at €300,000, the regime remains competitive. The competition today is no longer about non-Dominicans, but about Portugal, Greece, Switzerland, and the United Arab Emirates.
How the flat tax for new residents works (Article 24-bis of the TUIR)
This is a flat-rate substitute tax. The beneficiary must not have been a tax resident in Italy for at least 9 of the 10 previous tax periods. The flat-rate tax also covers all foreign-source income, regardless of its amount.
The collateral benefits weigh as much as the tax itself:
- Exemption from the RW framework, therefore no monitoring of foreign activities.
- Exemption from IVIE and IVAFE on real estate and financial assets held outside Italy.
- Exemption from inheritance and gift tax on assets located abroad.
- Duration up to 15 years, non-renewable, with voluntary revocation always possible.
The option is exercised in the tax return for the first tax period of Italian residence. Alternatively, the taxpayer can first submit a formal request to theRevenue Agency.
Two limitations to know right away
First of all, the flat rate does not cover income from Italian sources. This remains subject to ordinary IRPEF.
Second, the inheritance exemption only applies to foreign assets. A property purchased in Italy is therefore subject to Italian inheritance tax. This is precisely the point where tax planning and estate planning must be aligned. Those with assets spread across multiple countries can find more detailed information in our guide to the European Certificate of Succession.
Who it really benefits: the numbers
The advantageous threshold is approximately €1 million in annual foreign income. Below this amount, the standard Italian tax rate may be comparable or even more favorable. The marginal IRPEF rate, in fact, reaches 43% for income above €50,000, but foreign income has often already been taxed in the country of origin.
Above that threshold, however, the gap widens rapidly. With €5 million in foreign income, the tax remains at €300,000, compared to a standard tax burden of around €2.1 million.
The impact on the real estate market is measurable. According to Scenari Immobiliari, prices in Milan have increased by approximately 49% since 2017, compared to approximately 11% in other major Italian cities.
Flat tax and real estate purchases: a de facto link
The regime does not require the purchase of a property. Technically, it is sufficient to transfer one's residence to Italy, even if rented.
In practice, however, those who opt in to the flat tax for new residents almost always purchase property. There are three common reasons.
Operational reasons. Registration requires a stable address and a verifiable title to the property. However, those looking to rent encounter concrete resistance: landlords wary of new residents without an Italian credit history, short-term contracts unsuitable for residency, and terms incompatible with tax planning.
Financial reasons. Italian real estate is usually part of a broader strategy. It should therefore be planned taking into account that, unlike foreign assets, it will be subject to Italian inheritance tax.
Tax reasons. Relocating your residence opens up access to first-time homebuyer tax breaks. For assets in this range, the savings can be measured in tens or hundreds of thousands of euros.
If you're considering buying a house in Italy from abroad, our in-depth guide on how to buy a house in Italy from abroad in 6 steps outlines the entire paperwork process.
First-time homebuyer benefits: the 18-month window
The incentives reduce the registration tax from 9% to 2% for private purchases. A seven percentage point difference: on a taxable income of €2 million, the savings are €140,000.
There are two conditions, both binding:
- At the deed, the buyer declares his intention to establish residence in the municipality where the property is located.
- Within 18 months of signing the agreement, you will actually transfer your registered residence to that municipality.
Failure to meet the deadline results in forfeiture. The Agency then recovers the tax difference, applies a 30% penalty, and calculates interest.
Two traps that foreign buyers are not aware of
Luxury properties are excluded. Land registry categories A/1 (stately homes), A/8 (villas), and A/9 (castles and palaces of eminent value) are not eligible for the tax relief, regardless of price. Many properties of interest to this clientele fall within this category. Therefore, the land registry check must be carried out before the purchase offer is submitted, not until the deed of sale.
The taxable base does not always coincide with the price. In private purchases, the price-valueallows taxes to be calculated on the revalued cadastral value. This value is often much lower than the agreed price. However, the buyer must expressly request it in the deed.
A useful clarification: Italian citizens registered with AIRE follow different and, in some cases, more favorable rules, as we explain in the guide to first-time homeowner benefits for foreign residents.
Registered residence and tax residence: the crucial distinction
This is the most common confusion and also the most expensive.
Tax residency is determined according to Article 2 of the TUIR (Consolidated Income Tax Code), as amended by Legislative Decree 209/2023. The criteria are alternative: registration in the registry office (now a relative presumption, no longer an absolute one), domicile understood as the place where personal and family relationships primarily develop, civil residence, or physical presence in Italy for the majority of the tax period.
Registering residence , on the other hand, is a municipal administrative procedure, with verification by the police and its own timeframes.
Those who participate in the flat tax for new residents must acquire tax residency: this is a prerequisite for the scheme. Those who also wish to receive the first-time homeowner benefits must also complete the registration process within 18 months. These are therefore two separate requirements, with separate procedures and deadlines.
The calendar to be coordinated includes four steps:
- date of the deed and start of the 18 months;
- application for registration in the registry office and municipal processing times;
- exercising the option in the tax return;
- exit requirements in the country of origin, from exit tax to ceasing foreign tax residency.
The role of the notary in the operation
A notary is required to intervene in every Italian real estate transaction. However, in the context of the flat tax for new residents, their contribution is significant on two specific fronts.
Verification and drafting. The notary verifies the condition of reciprocity for the foreign buyer, checks the cadastral category for first-time buyers, assesses the applicability of the price-value, and includes the declarations of commitment to transfer residence. An error at this stage is not easily corrected retrospectively.
Coordination. The notary is often the first Italian professional a new resident encounters. Being able to work in English and understanding the dynamics of international buyers therefore impacts the outcome of the transaction. Many foreign clients, moreover, arrive with expectations shaped by different legal systems: we have dedicated the article " The Italian notary is not your lawyer".
How can we help you?
The Spinaci Notary's Office regularly assists foreign buyers transferring their residence to Italy under tax-favored plans. Notary Federica Spinaci speaks English and collaborates with leading international tax firms operating in the Roman and national markets.
For a preliminary consultation you can call +39 06.807.0943, or fill out the contact form below the article
The image in this article is AI-edited
