Italy is emerging as a premier European destination for the ultra-wealthy, attracting a new wave of high-net-worth individuals with its investor-friendly flat-tax regime, thriving luxury real estate market, and the magnetic appeal of la dolce vita. As other nations like the U.K. and France tighten tax rules for the rich, Italy's accommodative policy—a fixed annual charge on foreign income—has catalyzed a significant migration, particularly to the business and fashion hub of Milan.

Despite doubling the one-off charge to 200,000 euros in 2024, demand remains robust. "They operate at the wealth level, which is still way above 200,000 per year flat taxation," noted Matteo Pella, a senior real estate broker in Lake Como, comparing the cost to an inconsequential price hike on a daily coffee. Estimates suggest as many as 3,600 new high-net-worth individuals could relocate to Italy this year, following high-profile moves by figures like Egyptian billionaire Nassef Sawiris and Goldman Sachs vice-chair Richard Gnodde.

Milan's Transformation and a Red-Hot Property Market
This influx is transforming Milan's economic and social landscape, sparking a boom in high-end services and members' clubs like Casa Cipriani and The Wilde. "Milan has evolved a lot over the years... it became more and more attractive also for creatives, for investors and for an international crowd," said Anna Cipriani of Casa Cipriani Milano.

The most visible impact is on prime real estate. Property prices in Milan have soared 49% since the flat-tax regime's 2017 introduction, drastically outpacing growth in other major Italian cities. In coveted areas like Lake Como, prices have reached all-time highs after years of double-digit percentage increases, with buyers often driven by emotional desire for unique properties rather than pure investment logic. Knight Frank forecasts a further 3.5% price growth for Milan's prime market in 2025.

A Global Trend and Local Controversies
Italy's success highlights a deepening global divide between countries actively courting the wealthy and those implementing stricter fiscal policies. With the U.K. abolishing its non-dom regime and Switzerland considering tax changes, advisory firms note heightened competition to attract mobile capital. "There are countries literally around the world coming to us and saying: 'We want the U.K.'s millionaires and billionaires,'" said Stuart Wakeling of Henley & Partners.

However, the policy is not without critics. Some warn it exacerbates wealth inequality, concentrating economic benefits in specific sectors and geographies while contributing minimally to reducing Italy's overall budget deficit. Concerns persist about a potential "race to the bottom" in tax policies among nations. Proponents counter that the migration stimulates broader economic activity, job creation in finance, hospitality, and services, setting in motion a virtuous cycle of investment and opportunity that benefits the wider economy. The long-term societal and economic impact of this targeted wealth migration will be a defining test for Italy's growth strategy.