High-net-worth individuals eyeing Italy’s popular lump-sum flat-tax regime will face a steeper price tag in the new year. The 2026 Budget Law, published in the Official Gazette on 30 December 2025 and analysed by tax advisers on 8 January 2026, raises the annual substitute tax on foreign-source income from €200,000 to €300,000 for main applicants who transfer tax residence to Italy on or after 1 January 2026. The levy for each family member climbs from €25,000 to €50,000.
First introduced in 2017 at €100,000, the regime positioned Italy as a Mediterranean rival to the UK’s non-dom system and Portugal’s NHR scheme. The latest hike—Italy’s second in two years—aims to boost revenue and answer domestic criticism that the regime disproportionately benefits ultra-wealthy newcomers.
Prospective applicants should also remember that relocating involves immigration formalities: VisaHQ’s dedicated Italy team can simplify the process of obtaining entry visas, residence permits, and any supporting documentation, ensuring compliance while saving valuable time. For more information, visit https://www.visahq.com/italy/
![Italy Raises Flat Tax for New Residents to €300,000 Under 2026 Budget Law]()
Existing beneficiaries keep their locked-in rate, preserving Italy’s commitment to tax stability, but newcomers must weigh the higher cost against perks such as exemption from foreign inheritance and gift tax and simplified reporting obligations. The Budget Law leaves untouched the 50-percent “impatriate” income-tax exemption for returning Italian professionals, though earlier draft proposals suggested curbing that incentive as well.
For corporate mobility programmes the change is double-edged: Italy remains attractive for executives whose offshore portfolios exceed €1 million, but the €300,000 price may deter mid-tier talent who might instead consider Switzerland or Greece. Companies planning senior relocations in 2026 should revisit cost-projections, factoring in the higher levy and family-member charges.
Tax advisers note that the regime continues to allow cherry-picking of foreign jurisdictions subject to the substitute tax, meaning assignees can exclude income derived from specific countries and still rely on treaty benefits. Nevertheless, advance ruling requests (interpelli) are expected to surge as newcomers seek certainty before committing to Italy.
First introduced in 2017 at €100,000, the regime positioned Italy as a Mediterranean rival to the UK’s non-dom system and Portugal’s NHR scheme. The latest hike—Italy’s second in two years—aims to boost revenue and answer domestic criticism that the regime disproportionately benefits ultra-wealthy newcomers.
Prospective applicants should also remember that relocating involves immigration formalities: VisaHQ’s dedicated Italy team can simplify the process of obtaining entry visas, residence permits, and any supporting documentation, ensuring compliance while saving valuable time. For more information, visit https://www.visahq.com/italy/
Existing beneficiaries keep their locked-in rate, preserving Italy’s commitment to tax stability, but newcomers must weigh the higher cost against perks such as exemption from foreign inheritance and gift tax and simplified reporting obligations. The Budget Law leaves untouched the 50-percent “impatriate” income-tax exemption for returning Italian professionals, though earlier draft proposals suggested curbing that incentive as well.
For corporate mobility programmes the change is double-edged: Italy remains attractive for executives whose offshore portfolios exceed €1 million, but the €300,000 price may deter mid-tier talent who might instead consider Switzerland or Greece. Companies planning senior relocations in 2026 should revisit cost-projections, factoring in the higher levy and family-member charges.
Tax advisers note that the regime continues to allow cherry-picking of foreign jurisdictions subject to the substitute tax, meaning assignees can exclude income derived from specific countries and still rely on treaty benefits. Nevertheless, advance ruling requests (interpelli) are expected to surge as newcomers seek certainty before committing to Italy.
