Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
High-net-worth individuals all around the world searching for a simplified tax code have found what they’re looking for in Italy. The country quietly introduced a flat tax in 2017. The super-rich have been flocking there ever since, and they’re turbocharging Italy’s real estate market.
The U.S., the U.K., and most of the world’s largest economic powers have a progressive tax code. Under this system, tax bills for individual citizens are based on their earnings. The more the citizen earns, the higher their tax bill will be. Progressive tax codes can be unpopular with high-net-worth individuals for that alone. But they are also notoriously complicated.
Don’t Miss:
Italy’s flat tax system is incredibly simple by comparison. No matter how much a high-net-worth individual earns beyond Italian borders, their Italian tax bill would be capped at €200,000 ($231,679) plus €25,000 for each additional family member. That’s not the only provision of the Italian tax code that appeals to high-net-worth individuals. Italy’s system allows taxpayers to apply directly to its tax authorities for clarity on tax issues before they relocate.
That means there won’t be any surprises in the form of fines for improper filings or incorrectly reporting income. Italy’s plan is proving to be a big hit with the private jet set. According to Forbes, Italy has attracted 3,600 high-net-worth individuals to the country since adopting its flat tax system, and the impact is being felt most prominently in the real estate market.
Trending: Accredited Investors: Grab Pre-IPO Shares of the AI Company Powering Hasbro, Sephora & MGM—Secure $0.63 Shares Before 8/14
Forbes also reports that premium real estate in Milan’s best neighborhoods is selling for €15,000 per square meter. Newly built apartments with energy-efficient features are fetching €7,250 per square meter. Many of them sell out before developers can complete all the new units. Regions in Southern Italy like Campania, Sicily, and Puglia are also proving to be very popular with well-heeled expats.
Once they arrive in Italy, the new arrivals find plenty of reasons to stay. The country possesses a unique combination of scenic beauty, rich history, and a culinary heritage that’s famous all over the world. There is an abundance of idyllic locations to suit any taste. Areas like Lake Como, the Amalfi Coast, and the Tuscan hill country have long been vacation destinations for the super-rich.
