The Italian government is working on the new Budget Law and considering a substantial change to its special flat tax regime for high-net-worth individuals who relocate to Italy. The plan raises the annual flat tax on foreign-sourced income from €200,000 to €300,000.
This marks the second increase in a short period. Italy set the regime at €100,000 when it introduced the program in 2017, then raised it to €200,000 for new applicants in 2024. Now, Italy appears ready to push the threshold even higher to attract ultra-wealthy residents and remain competitive internationally.
The measure is not yet law, as it is in the proposal phase, and the government has not published any official legislative text.
Many details remain unknown: Whether the increase would apply only to new applicants or also to existing beneficiaries, whether family members would still pay a reduced amount, and whether the government might introduce any new conditions, such as mandatory investments in Italy, a matter which is currently under discussion.
Supporters say that even with a higher amount, Italy would remain attractive compared to other jurisdictions and could generate more overall revenue for the State.
Critics argue that increasing the threshold again after only one year could undermine confidence in the stability of the law, making the regime appear unpredictable and therefore less appealing to foreign individuals who value long-term certainty.
For now, the key point is that this remains only a proposal within the upcoming Budget Law. Parliament will have to review and potentially amend it, and the final version could change. The number might remain €300,000, Parliament could set it differently, or lawmakers could drop it entirely.
What is clear is that Italy is not stepping back from using this regime as a strategic lever. If anything, the government is doubling down. The next weeks will show whether this bold move becomes law or stays on paper.
