The Italian government is preparing a significant update to its flat tax regime for new residents, a program that has positioned Italy as one of the most attractive destinations for wealthy individuals and international families seeking both lifestyle and fiscal stability.

Within the 2026 Budget Law, the government has proposed to increase the annual flat tax from €200,000 to €300,000 for the main applicant, and from €25,000 to €50,000 for each additional family member.

This marks the third version of the regime since its introduction in 2017 — a clear sign that Italy is refining the system to focus on high-net-worth and ultra-high-net-worth individuals who wish to combine fiscal efficiency with the Italian quality of life.

A Brief History of the Italian Flat Tax Regime

The Italian flat tax regime (Article 24-bis of the Italian Income Tax Code) was first introduced in 2017 to attract international investors, entrepreneurs, and professionals who were not tax resident in Italy for at least nine of the previous ten years.

  • From 2017 to August 2024, the fixed rate was €100,000 per year (€25,000 for each family member).
  • Following the 2024 Budget Law, it was increased to €200,000 starting August 10, 2024.
  • The new 2026 proposal would bring it to €300,000, with €50,000 for family members.

This evolution reflects Italy’s intention to narrow the scope of the regime while maintaining its competitiveness among European jurisdictions such as Switzerland, Portugal, and the United Kingdom.

Who Can Benefit from the Flat Tax?

The regime remains accessible to individuals who:

  • Have not been tax resident in Italy for at least 9 of the previous 10 years
  • Transfer their tax residency to Italy (both registration and effective presence)
  • Elect the regime through their first Italian tax return or a pre-approval ruling

Once granted, beneficiaries pay a fixed amount on all foreign-source income, regardless of the total amount earned abroad.
Italian-source income remains taxed normally, but the regime eliminates wealth taxes (IVIE/IVAFE) and foreign reporting obligations (Form RW).

This simplicity and predictability have made the regime particularly attractive for entrepreneurs, investors, and retired individuals managing global wealth.

What Changes Are Expected in 2026?

If approved by Parliament, the new law would apply to individuals relocating to Italy from 1 January 2026 onwards.
The increase from €200,000 to €300,000 means that future applicants will face a higher entry cost — a measure aimed at focusing on ultra-wealthy families rather than upper-middle-income expatriates.

However, the law includes a transitional rule that allows individuals who transfer their tax residency by 31 December 2025 to continue paying the current €200,000 (and €25,000 for family members) for the full 15-year period.

In other words, those who move before the end of 2025 will lock in the lower rate and preserve their fiscal advantage even after the new law enters into force.

Why the Increase?

The Italian government appears determined to strengthen the perception of Italy as a hub for ultra-high-net-worth relocation, aligning the program with the country’s broader economic and reputational strategy.

Several factors may have contributed to this decision:

  1. International scrutiny over competitive tax regimes and calls for differentiation among income brackets
  2. Rising demand from global citizens after the end of similar programs in Portugal and the UK
  3. Fiscal balancing needs following recent tax reforms and expenditure increases
  4. The government’s goal to attract fewer but higher-quality investors, able to make substantial contributions to the Italian economy through real estate, art, or entrepreneurship

While the higher threshold might reduce the number of applicants, it reinforces the exclusivity and prestige of Italy’s tax residency offer.

The Window of Opportunity: Move Before 31 December 2025

For those considering a move to Italy, the next 12 months represent a decisive opportunity.
By relocating and establishing tax residency before the end of 2025, you can secure the current €200,000 flat tax rate for the full 15-year term — a potential saving of €100,000 per year, or €1.5 million over the duration of the program.

This timeframe also offers a strategic advantage:
applying now means avoiding the surge in last-minute requests that will likely occur in late 2025, when many individuals and families will rush to register their residency.

How the Election Process Works

To activate the flat tax regime, applicants must:

  1. Transfer their tax residency to Italy (both civil registration and effective physical presence).
  2. File a pre-approval request (ruling) with the Italian Tax Authorities, confirming eligibility.
  3. Elect the regime in the first tax return after the move.

The process requires careful planning, including the choice of residence, assessment of prior tax residency, and analysis of global income sources.

Why You Should Seek Professional Assistance

Each relocation has unique legal and tax implications.
For instance, the timing of your move can affect your tax residency status, your eligibility for the flat tax, and the treatment of specific income streams (capital gains, dividends, pensions, etc.).
Moreover, Italian municipalities require strict documentation and may carry out residency verification visits by local police.

Professional assistance ensures that each step — from the house search to the ruling submission — is handled correctly and efficiently, avoiding costly mistakes or delays.

How Move to Dolce Vita Can Help

At Move to Dolce Vita, we assist international clients with the entire relocation and tax process:

  • 🏠 House search and property assistance for residency purposes
  • 🏛️ Residency registration with Italian municipalities
  • 📄 Tax ruling submission to the Italian Tax Authorities
  • 💼 Strategic tax planning tailored to global income and assets

If you plan to relocate to Italy, now is the best time to secure the current €200,000 rate and lock it in for 15 years. Contact us today — our team will handle every step of your relocation, from finding your new home to filing your tax ruling.

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