Amid complaints that wealthy expatriates taking up tax residency have caused real estate prices to soar, the Italian government has doubled the flat tax on the foreign income of new residents to €200,000 (roughly $218,000).
The Financial Times reported Prime Minister Giorgia Meloni’s cabinet approved the increase of the tax incentive from €100,000. The tax incentive started in 2016 and allows wealthy foreign residents and Italians returning home after living abroad for at least nine years to pay a flat tax on any foreign income or assets for 15 years.
To date, this incentive attracted at least 2,730 multimillionaires to take up residence in Italy. However, many Italians blame the influx of wealthy expatriates for fueling the increase in real estate prices, particularly in the business capital Milan where real estate prices soared 43% over the past five years and rentals increased nearly 20% over the two years ending in March.
Finance Minister Giancarlo Giorgetti stated the higher levy would only apply to people taking up tax residency in Italy from now and not to those already living in the country.
