At first, it seemed too good to be true. There must be a catch. That was the initial reaction of the international super-rich and their accountants back in 2016 when the Italian government introduced an annual flat tax of only €100,000 (about £80,000) on the global income and assets of anyone who transferred their residency to Italy. No wealth tax, no inheritance tax, no income tax -- just the annual six-figure sum if you committed to living at least half the year in Italy for a period of up to 15 years. "It was an extremely interesting idea," says Paul, a UK businessman who moved to Milan's fashionable Brera district after advice from his accountants three years ago. "It was unusual to have a normal country with this kind of tax incentive."
Until then, the only territories with similarly soothing tax requirements were places like Liechtenstein, Belize and the Isle of Man. Here was a civilised country with a cultural hinterland and great cuisine that was opening its doors to the have-yachts without revenue officers waiting inside with cudgels raised. And not just any country -- this was Italy, the land of palazzos and fine art. Finally, la vita could really be quite dolce.
Initial take-up was slow, as the rich are rarely rash when it comes to taxation. In those pre-Giorgia Meloni days, Italy had a habit of changing governments and policies. Who knew if this one would last? But by 2018, 200 applicants to the scheme had been successful; by 2020 there were 400. Then came the pandemic. The rich who claimed to live in a cupboard in Monaco had to do the unthinkable and actually spend time in it. And like the rest of the world, they started to think about where they would go when it was all over. Top of the list? Italy, which appeared to be keeping its promise. The numbers started to increase: 700 by 2021, 950 by 2022, 1,250 by 2023. The flat-taxers, as they became known, were here to stay.
In August 2024, the Italian government doubled the tax from €100,000 to €200,000, possibly in response to complaints from opposition parties that the deal was too generous. But even so, it has done little to stem the tide of Britons. "So it's gone up and I now pay £170,000," Paul says. "But that's still cheaper than Guernsey, Jersey and the Isle of Man, which are all about £225k, £250k." In his seventies and with adult children, Paul did not need to relocate his whole family, but the move was quite a change after years in the British countryside.
Even doubled, Italy's flat tax represents an excellent deal for Britain's top earners, who pay a 45 per cent top rate of income tax on their global income and 40 per cent inheritance tax on their worldwide property. Then on April 6, the UK government scrapped the 226-year-old rule that allowed non-domiciled residents to avoid paying UK tax on foreign income and capital gains. "So the two things together suddenly make Italy really very appealing. There is both an incentive here and the loss of one in the UK," says Roberto Magaglio, a senior partner at the estate agency Engel & Volkers in Milan. A condition of the flat tax is that you must give the Italian authorities full disclosure of your global wealth, but in exchange you're allowed to pay the fixed amount.
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The uptake has increased so much since April that Italy now ranks as the third most popular destination for millionaires to relocate to, according to data newly published by the consultancy firm Henley & Partners. Its 2025 report calculates that of the 142,000 millionaires expected to relocate worldwide, 3,600 will have chosen Italy by the end of the year, a growth of 20 per cent in the past 10 years. This puts Italy only behind the UAE and US in world rankings and just ahead of Switzerland and Saudi Arabia, with the UK languishing at the bottom of the table, with 16,500 millionaires expected to leave by the end of the year.
Early adopters of Italy's flat-tax scheme have included Natalia Grosvenor, the dowager Duchess of Westminster, who has a house at Portofino, where she makes vermentino white wine, and Nat Rothschild, now the fifth Baron Rothschild following the death of his father last year. In addition to having homes in London, Wiltshire, Los Angeles and Corfu, in 2021 Rothschild snapped up a villa in the foothills of Florence for €10 million, joining the dozens of others who have identified Florence as an ideal place to live (it has a good international school and an airport with an area for private jets).
But the trend emerging this year is that it's not just the billionaires who are leaving Britain for Italy, but also the tiers below -- people who work to make money rather than paying someone else to manage it. And these finance types tend to choose Milan over Florence or Rome.
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"You can't believe how many Brits there are in Milan now," Paul says. "People think, 'Wouldn't it be nice to live in Venice or Florence or Rome,' but they aren't very practical places to live. Whereas Milan works: if you go for a meeting at 10am, they arrive at 10." There has also been a lot of money spent on roads, trams and airports in recent years, which Paul says all started ahead of Expo 2015. "We've had infrastructure redevelopment over the past years," says Afonso Solms-Baruth, a real estate consultant and head of business development at RE.MI Real Estate Milan. "We have a new metro line that links the centre directly to the airport. Roads have been redone for the Winter Olympics next year. So it all looks fresh and clean. And you add that to all these wealthy people coming in and walking around in this sexy, cool environment and you can see that the incentives are really working."
Andrea Tortoroglio, MD at Deutsche Bank Wealth Management and head of institutional clients in the Italian UHNWI (ultra-high net worth individuals) team, describes the influx of super-rich as a "megatrend" that will shape the city's future. He says Milan has it all in terms of location, facilities and convenience. "Milan is in the heart of Europe. It's just two hours to the best skiing in the Alps, a couple of hours to the seaside at Portofino and Santa Margherita, three hours by train to Rome, less than two hours to Florence and Venice. And with a private plane you can be anywhere in Europe in 90 minutes. The location is crucial."
What it hasn't got is enough available accommodation, sending property prices through the roof. "One of the problems in Italy is that since 1978, when a law was passed that heavily favours the tenant over the landlord, people don't let out property in a commercial way in the same way you see in Britain," Magaglio says. "This means it's very hard to find a nice flat to rent unless it was grandmother's place and the family don't want to sell... Flat-taxers want to rent a very nice property, of which we have very little in Milan, because the rental market is based on small properties, two or three beds max. What they want is four, five or six bedrooms, which are very rare."
Those seeking to buy face an equally tough time. "If you come here and want to spend less than €5 million, you will not find anything decent," Solms-Baruth says. "If you're looking to spend that in London there's the supply, there's choice -- you can visit apartments and houses all day long. But in Milan, once something special hits the market, it goes immediately. If I have a 300sq m space in Sant'Ambrogio, I can name whatever price and it will sell." Flat-taxers often start by renting just to get a foot in the door, but in their hurry can pay astronomical rents. "They can easily pay anything from €18,000 per month upwards," Solms-Baruth says.
The most sought-after flats are on the top floor with a bit of a terrace in areas like Sant'Ambrogio, Brera, San Marco or the Cinque Vie. "Flat-taxers will relocate their families, so they look at locations that are strategically good for schools." Even so, prices in Milan have probably still not peaked. "This demand for prime real estate is a new phenomenon for traditional Milanese families," Solms-Baruth says. "For the estate agents, it's all about getting to know the families who own these properties so that when the grandmother dies you're ready to jump in and say, 'Hey, guys, have you considered selling the last floor of your palazzo?' It will generate so much money that they can live off that for the next generation. I'm exaggerating, but it's not far off."
Everyone agrees that the influx of British businessmen and financiers into Milan is leading to a Londonification of the city. "Milan is our Singapore now in Italy, because it has all these attractive ingredients," Tortoroglio says. "It's also small compared with Paris or London or even Rome, and it's quite safe. Many of our clients tell me they feel it's risky to walk down the street in London or Paris wearing an expensive watch." Milan's relatively small size helps to create a close-knit vibe, as does the rise in private members' clubs, where annual membership typically costs €10,000. "There are a lot of gentleman's clubs that have opened in the past five years, and there are more to come," Tortoroglio says. Magaglio points out that, until recently, there was only one, the very stuffy Circolo Dell'Unione, founded in 1841, whereas now there are six. The restaurant and bar scene is changing too, with more London-style restaurants opening "like Sexy Fish, that kind of vibe".
The hottest restaurant among bankers is Langosteria, which now has four venues across Milan as well as outposts in Paris, Portofino and St Moritz, followed by Casa Cipriani, which opened in 2022. "All the movie stars and CEOs go to Langosteria," Solms-Baruth says, "Otherwise they're at Casa Cipriani or the Wilde. You didn't have these kinds of clubs until very recently. Thursday night is party night at Casa Cipriani." Inevitably, Soho House is also building a Milanese club.
The bars and restaurants in the city's five-star hotels, such as the Bulgari and Four Seasons, are full most nights. One of the hottest venues is the ground-floor bar and restaurant of the Portrait Milano on Corso Venezia. What was once a 16th-century seminary has been restored by the Ferragamo family, its cloisters now buzzing with shops and steak restaurants.
"Milan is getting this international finance boost," Solms-Baruth says. He points to the acquisition last year by the French luxury group Kering, which owns Gucci, of an 18th-century building on Via Montenapoleone for €1.3 billion, Italy's biggest property transaction on the world's most expensive shopping street.
Still, the high life is more affordable in Milan than in London, says Seb, who works for a luxury goods auction house. "At one point we had two live-in nannies," he says, laughing. "Compared with the UK it's a joke, especially if you have children. The lifestyle is pretty good here." Seb is grappling with a vicious hangover when we speak on a Friday morning, having been at the Wilde private members' club the night before. "They're pushing the club thing here but I'm not sure it's going to take off," he says. "I shouldn't say it, but there's no vibe here yet." Although Seb is not a flat-taxer (he's married to an Italian), he says it's noticeable how many people he meets who are. "And not just Brits but people who used to live in London and are moving here because of the tax stuff."
The art world, which already has a big presence in Milan, is getting ready to take it up a notch. The Italian government recently reduced VAT on sales and imports of artworks from 22 per cent, one of the highest VAT duties in Europe, to 5 per cent, now the lowest. No wonder leading gallerists are opening spaces in the city. Thaddaeus Ropac, who already has galleries in London, Paris, Salzburg and Seoul, will open a gallery in the Palazzo Belgioioso, next to La Scala opera house, this autumn. "I was reading that the forecast this year is for €1.5 billion in additional art sales in Milan", Solms-Baruth says. "This is crazy. Once you have a lot of money, what do you do? Art is an area where you can compete. 'Did I buy the more expensive Picasso?' 'My painting is bigger than your painting.' Then add on the tax incentive side of things. A lot of money is going to be spent in Milan and Italy over the coming years."
Even the language is changing, Tortoroglio says. "I also teach at Bocconi University, which is a highly ranked private university. Starting from this year, all our master of science courses will be switched just to English. The trend will continue also in the undergraduate school. Right now, about 32 per cent of our total students are foreigners [5,100 out of a total of 15,900]. And this ratio is increasing year by year."
The question is, will tax incentives last? When Paul first moved to Milan, he said the authorities were rigorous in checking he lived at the address he gave. "They come to make sure you are living where you say you are." But three years on, they are relaxed, meaning residency can become a more fluid concept. And for now, there are no strings attached -- no requirement to invest in Italian bonds or even to buy property here. Meanwhile, the average Italian pays 23 per cent on the first €28,000 they earn, with no personal allowance. As one Florentine put it to me, "the only way to live in Italy is not
to be Italian".