Italy has started the new year by ratcheting-up the cost of its headline residency incentive for ultra-high-net-worth individuals (UHNWIs). Article 1 of the 2026 Budget Law, published in the Official Gazette late on 31 December 2025, raises the annual flat tax for newcomers who opt into Italy’s “regime dei nuovi residenti” from €200,000 to €300,000. The supplemental flat tax for qualifying family members doubles from €25,000 to €50,000 per person.
The government insists the measure will not deter its target demographic. In an analysis published this morning, investment-migration journal IMI Daily notes that the programme remains attractive to households with foreign-sourced income above €1 million because the lump-sum payment still undercuts progressive tax rates of 45-50 percent found elsewhere in Europe. Crucially, the regime continues to exempt participants from Italian wealth, inheritance and gift taxes on offshore assets and to waive foreign-asset reporting obligations.
Grandfathering provisions protect existing beneficiaries: anyone who took up residence and elected the regime before the new law entered into force will keep the €200,000 rate for the remainder of their 15-year term. Observers therefore expect a short-term rush of applications from prospective movers who signed preliminary contracts in 2025 but have not yet completed relocation formalities.
![Italy Hikes Special Flat Tax for New Residents to €300,000]()
For those considering a move, administrative hurdles around entry visas, residence permits, and documentation can be just as daunting as the tax analysis. VisaHQ’s Italy desk (https://www.visahq.com/italy/) streamlines this part of the process by guiding applicants through visa selection, compiling compliant paperwork, and liaising with consulates, freeing advisers and families to focus on the financial planning itself.
For global mobility managers, the higher entry ticket changes the cost–benefit calculus of assigning top executives to Italy under the flat-tax scheme. Companies will need to update relocation budgets and assignment letters to reflect the €100,000 increase and reassess whether split-pay or shadow-payroll structures remain the most efficient approach. Wealth advisers meanwhile emphasise that, even at €300,000, Italy is still cheaper than comparable lump-sum regimes in Switzerland and offers a higher quality-of-life dividend, including access to the EU labour market for family members.
In the medium term, tax practitioners expect the government to leave the levy untouched; three successive hikes (from €100k in 2023, to €200k in 2024, to €300k today) arguably position the regime at its competitive ceiling. A period of stability should allow multinational employers and private clients to plan assignments and succession strategies with greater certainty.
The government insists the measure will not deter its target demographic. In an analysis published this morning, investment-migration journal IMI Daily notes that the programme remains attractive to households with foreign-sourced income above €1 million because the lump-sum payment still undercuts progressive tax rates of 45-50 percent found elsewhere in Europe. Crucially, the regime continues to exempt participants from Italian wealth, inheritance and gift taxes on offshore assets and to waive foreign-asset reporting obligations.
Grandfathering provisions protect existing beneficiaries: anyone who took up residence and elected the regime before the new law entered into force will keep the €200,000 rate for the remainder of their 15-year term. Observers therefore expect a short-term rush of applications from prospective movers who signed preliminary contracts in 2025 but have not yet completed relocation formalities.
For those considering a move, administrative hurdles around entry visas, residence permits, and documentation can be just as daunting as the tax analysis. VisaHQ’s Italy desk (https://www.visahq.com/italy/) streamlines this part of the process by guiding applicants through visa selection, compiling compliant paperwork, and liaising with consulates, freeing advisers and families to focus on the financial planning itself.
For global mobility managers, the higher entry ticket changes the cost–benefit calculus of assigning top executives to Italy under the flat-tax scheme. Companies will need to update relocation budgets and assignment letters to reflect the €100,000 increase and reassess whether split-pay or shadow-payroll structures remain the most efficient approach. Wealth advisers meanwhile emphasise that, even at €300,000, Italy is still cheaper than comparable lump-sum regimes in Switzerland and offers a higher quality-of-life dividend, including access to the EU labour market for family members.
In the medium term, tax practitioners expect the government to leave the levy untouched; three successive hikes (from €100k in 2023, to €200k in 2024, to €300k today) arguably position the regime at its competitive ceiling. A period of stability should allow multinational employers and private clients to plan assignments and succession strategies with greater certainty.
